#Asia Kakao buys music streaming service MelOn for a sweet US$1.5B


Image Credit: Austin Prock / Unsplash

Image Credit: Austin Prock / Unsplash

South Korean tech firm Kakao, best known for its mobile messaging app KakaoTalk, has today announced its intentions to acquire Loen Entertainment, the parent company behind music streaming platform MelOn.

According to TechCrunch, the deal is valued at 1.87 trillion KRW (about US$1.5 billion) with Kakao buying a majority stake in MelOn. The latter boasts about 28 million users in the North Asian country.

Going forward, Kakao may use MelOn to expand the former and its suite of services to overseas markets where there are already existent communities that listen to Korean music.

However, given that Kakao itself is still lagging behind in terms of overseas user against other Asia-based chat app companies like LINE or WeChat, this may be difficult.

Also Read: Meet Korea’s Beat, a music streaming service for Kpop and beyond

Park Jung-hoon, a fund manager at HDC Asset Management told Reuters that going into foreign markets would come with challenges aplenty, since “MelOn and KakaoTalk [lack] meaningful user bases outside of Korea“.

Jimmy Rim, CEO, Kakao, said in a statement: “Music is one of the most loved content genre in the mobile era. It is also incredibly powerful in that one song can set trends for an entire generation and highly influence the global pop culture.”

He added, “By combining Kakao’s various platforms and content services and Loen’s leading music content, we expect tremendous synergy that could establish a strong foundation for global expansion.”

Music and the entertainment space in general is hugely popular in Korea, especially with the Korean wave sweeping across most of Asia and beyond for almost two decades now. Just three days ago, MyMusicTaste, a South Korean crowdsourcing platform for concerts, was reported to have received US$10 million in a Series A round, and we know that’s only the beginning.

The post Kakao buys music streaming service MelOn for a sweet US$1.5B appeared first on e27.

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