By: Hannah Waitt
Today, a landmark deal was announced in Korea when Kakao, the messaging service known worldwide incredibly descriptive and unbearably adorable emojis, declared their intent to acquire majority shares in MelOn.
Kakao is investing 1.87 trillion KRW (approximately $1.54 billion USD) into Korea’s most popular music service, earning them a 76.4% majority stake in Loen Entertainment, MelOn’s parent company.
TechCrunch is calling the investment “the largest tech acquisition in Korean history”, and with Kakao’s ever-increasing global reach, this deal could have major implications for K-pop’s global expansion.
Currently, MelOn boasts 28 million users in South Korea alone. By comparison, Spotify (which, interestingly enough, is not avaible in Korea) is estimated to have about 20 million paid users worldwide with another 55 million free subscribers.
As one of the most connected nations in the world, Korea is a prime example of how a country can effectively adapt to the digitalizaiton of music. MelOn has remained Korea’s dominant music streaming service since its launch in 2004, and if the company’s ability to permeate an entire nation of users is any indication of their chances at the regional and perhaps even global market, then we should be seeing big things from the company abroad soon.
Traditionally, international K-pop fans have primarily used YouTube as their source of K-pop content, but Kakao could be looking to change that with this acquisition. With Kakaotalk acting as a distributor and MelOn/Loen as a provider of content, you might find yourself getting your K-pop news from Kakao more often than not. Most big K-pop acts already have dedicated Kakaotalk accounts, which should make the integration of exclusive content delivery seamless for MelOn.
Kakaotalk is by no means the first or only company in the social messaging game; services like Line, WeChat, and Whatsapp are ubiquitous in their own respective markets all over the world. However, it seems that Kakao hopes that by associating itself with K-pop, they will be able to ride the Hallyu wave out of Korea and into your mobile downloads as K-pop’s influence abroad continues to grow.
Tags: Industry Update Kakao MelOn