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| Kakao Chairman Kim Beom-su |
"Kakao Entertainment's structure is now complete, with content, music and media businesses," Kakao Executive Vice President Jay Bae said in an earnings call for the second quarter.
"We are expecting the affiliate to become a global content firm within the next three years, based on its intellectual property value chains."
Kakao Entertainment was launched in January via the merger of KakaoM and KakaoPage. Kakao Entertainment has over 8,000 intellectual property rights to original stories from KakaoPage, including webcomics and web-based novels. The business has a presence in 10 countries including the U.S., Japan and a number of countries in Southeast Asia. KakaoM operated a music and video content production and distribution business. The integrated entity will be merged in September with Melon Company, a music streaming business.
Bae said Kakao is aiming for its Japanese subsidiary's webcomic platform Piccoma to achieve 1 trillion won in annual transactions this year, amid a rapid expansion of payments for its content in the Japanese market. Piccoma has a dominant presence in Japan's market for digital comics. The Kakao executive's remarks come at a time when Kakao is aggressively expanding its presence in global markets for digital content.
Kakao Entertainment is also aiming to expand its presence in the North American market, with its acquisition of fiction app Radish and Tapas Media that offers short-form online-based mobile content.
"Tapas is increasingly incorporating Kakao Entertainment's original intellectual property after discussions began in May to acquire the company's shares," Bae said. "We will rapidly expand the scale of intellectual property for new stories that will be provided to Tapas by the end of the year."
Kakao is also set to introduce original web-based novels to North American viewers via Radish. The entertainment firm is seeking to create synergy with the acquisitions, such as by making Radish's original web-based novels into webcomics on Tapas.
Kakao posted record quarterly earnings in the second quarter, logging 1.35 trillion won in sales for a 162.6 billion won operating profit. The figures are up 42 percent and 66 percent, year-on-year, and 7 percent and 3 percent, quarter-on-quarter. Kakao's sales have grown for 17 consecutive quarters while its operating profit has shown growth for 10 straight quarters.
The IT giant's second quarter earnings were driven by platform advertisements, and its mobility, fintech and webcomic businesses.
Kakao said it expects its mobility business to surpass break-even point on an annual basis this year. The company said robust growth of the business would be backed by strong demand for Kakao's mobile-based cab hailing as well as designated driver services and the launch of new services such as payments for parking and tickets for inter-city buses and trains.
Kakao has an advantage in attracting customers given the user base of KakaoTalk ― 46.6 million out of Korea's 51.8 million population were using the messenger app as of the second quarter.
