[팩플] Naver, this time, BTS’s Big Hit hand in hand…The reason why Kakao is so sore

Big Hit Entertainment, which raised the global K-pop star BTS (BTS), and Naver, the largest Internet company in Korea, join hands to strengthen competitiveness. Both companies are officially in the position of “I can’t confirm”, but the two companies seem to be considering several methods, from simple investment to equity exchange. If the investment is successful, the big deal between the top-ranked KOSPI companies is expected to attract attention.
Big Hit: Listed in October 2020, market cap of 6.85 trillion won. KOSPI 44th.
Naver: Listed in October 2002, with a market capitalization of 56.42 trillion won. 5th in KOSPI.

How will Naver and Big Hit Entertainment join hands? It is reported that Big Hit, the number one market capitalization of domestic entertainment companies, and Naver, an IT conglomerate, are considering equity investments. The two companies are known to be considering various investment and cooperation plans. [중앙포토]

Naver has steadily strengthened its entertainment related services in recent years, such as V Live, Vibe, and Now. Although it has a solid portfolio of IT-based entertainment services, the content that needs to be filled is always hungry. Working directly with entertainers is a shortcut to securing content for Naver as well.
· YG Entertainment was the first entertainment company to partner with Naver. In 2017, Naver invested 50 billion won each in YG Entertainment and YG Investment Fund, a financial affiliate.
· Naver became the third largest shareholder of CJ ENM and the second largest shareholder of Studio Dragon through the exchange of shares with CJ Group last year.
· Enter 3 also invested in Naver. Big Hit, JYP, and YG have poured billions of billions in succession into Naver Jet, which creates an augmented reality (AR) avatar service’ZEPETO’. The mutual aid between the three Naver-Entertain companies is already solid.

It is not simply expecting Naver’s influence in the domestic IT market that entertainers are trying to form a cooperative relationship with Naver. From the business briefing session in 2019, Yoon Seok-jun, CEO of Big Hit Global, said, “We need to innovate the music market. For this, we need cutting-edge technologies such as 5G and virtual reality.”
· Global business capability : Big hit’Weverse’ targets the global market. Weverse’s share of domestic users is only one digit. More than 60% of Big Hit’s sales (as of 2019) come from overseas. SM·JYP are also looking for growth engines overseas. What they need is’global content business’ capability. After dominating the domestic internet market, Naver made clear results in global markets such as Southeast Asia (Line) and the United States (Naver Webtoon).
· IT infrastructure : Big Hit launched a fandom platform’Weverse’ with BNX, an IT subsidiary. Weverse is cruising, surpassing 17 million cumulative users. However, for Weverse to become platform competitive, only artist-related content is not enough. There is a need to internalize cutting-edge IT technologies such as AI and augmented reality (AR). Partnering with Naver is an opportunity to fill these shortcomings.

Naver is increasing business cooperation and investment with the entertainment industry. Graphic = Reporter Park [email protected]

Kakao, a two-headed coach in the domestic ICT industry with Naver, is not as active in cooperation with Enter as Naver. In fact, there is a difference from Naver in terms of business portfolio and capabilities.
· Kakao strong in Korea : Compared to Naver, Kakao has a large portion of the domestic market and business. Most of the sales of new businesses such as Kakao Talk and shopping (giving gifts), Kakao Pay and Kakao Mobility are concentrated in Korea. Kakao Co-CEO Yeo Min-soo also said last year, “Kakao has not yet produced meaningful results in the global market.”
· Kakao is an enter rival : Unlike Naver, Kakao is growing its influence in the domestic entertainment industry itself through Kakao M, an entertainment subsidiary. It has acquired about 10 singers and actors management companies, and as a drama and film production company, it directly produces and distributes original content. It is a kind of rival, where the business areas of giant entertainment companies directly overlap.

The world’s first paid online concert’Beyond Live’ (left), which was first introduced by Naver and SM Entertainment last year, and YG Entertainment’s idol group Black Pink, was implemented as a 3D avatar character in Naver’Zeppetto’. [각 사]

On the 19th, before this big hit investment rumor came out, Naver Whatpad, the world’s largest web fiction platformAcquired. A plan to securely build an intellectual property (IP) ecosystem by simultaneously possessing webtoon (Naver Webtoon) and web novel (Watpad) platforms with high growth potential. As Naver’s large-scale investment continues, the rumors of cross-industry investment are also pouring out. On the 19th, when Naver announced its acquisition of Whatpad Naver Bank takeoverIt also burst. It said that’Naver is considering acquiring a stake in Jeju Bank to acquire a banking business license.’ Naver completely denied the report.

However, as Naver considered an application for an Internet bank in January 2019, two years ago, and Line Financial entered the Internet banking and securities industry in Japan, the possibility of Naver’s business cooperation with traditional financial companies seems to be open.

Reporter Ha Sun-young [email protected]

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