Kakao, SM launch joint venture in US

SM Entertainment's headquarters in Seoul / Korea Times file

By Kim Jae-heun

Kakao launched a joint venture with SM Entertainment in the United States to create business synergy in the growing global entertainment market, the two companies said Tuesday.

The joint venture combines Kakao Entertainment's music distribution network and multi-label system with SM Entertainment's strengths in global intellectual property and music production capabilities.

The two companies also plan to secure a solid base for business cooperation and experience in North America, which is the center of the global entertainment business, before expanding to the European market.

“The establishment of the joint venture in the United States will accelerate Kakao Entertainment's global business growth and expansion of SM Entertainment's musicians. Based on this, we will prove to the world the growth potential of our music businesses, which encompasses the whole process of planning, production and distribution of music and artists' IP,” said Joseph Chang, CEO of Kakao Entertainment America, who will also lead the joint venture.

Logos of Kakao Entertainment and SM Entertainment / Courtesy of Kakao Entertainment

First, the joint venture will boost the global marketing of K-pop artists contracted under Kakao and SM Entertainment. It will provide comprehensive support to K-pop musicians to release albums, promote their music and help star in local promgrams.

The joint venture also aims to strengthen its network in the US by cooperating with local experts through partnerships with leading global enterprises.

Kakao Entertainment and SM Entertainment already revealed plans to expand the global activities of their popular K-pop bands, such as IVE and and AESPA.

They are also working to expand communication with global fans. Discovering local artists and developing related IP business is another goal.

The joint venture will seek ways to discover local artists and push for strategic investments to develop global IPs by establishing partnerships with overseas labels.