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Kakao and SM Entertainment are joining forces to establish a joint venture in the United States, aiming to expand the global influence of their respective artists. The companies are marrying Kakao's vast music distribution network with SM Entertainment's robust IP assets and proven music production prowess.
Kakao and SM Entertainment will form a new entity through their JV. Moreover, with their partnership, the companies are looking to bolster the overseas activities of their respective artists, The Korea Times reported.
The partners revealed their joint venture agreement on Tuesday, Aug. 1, and said they expect to create business synergy in the U.S. amid the snowballing global entertainment market. The cooperation between the firms will merge Kakao Entertainment's music distribution network and multi-label system with SME's global intellectual property assets and tested music production capabilities.
"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," Kakao Entertainment America's chief executive officer, Joseph Chang, said.
"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."
Kakao Entertainment and SM Entertainment also plan to establish a solid base for their joint business in North America. Their next step after this is to expand and enter the European market.
The Korea Economic Daily reported that the company's business in the U.S. is a 50:50 joint venture. The integrated company is set to be managed by Kakao Entertainment's global strategic officer, Jang Yoon Jung, who has been appointed head of the new office.
Finally, SM Entertainment and Kakao's new company will fully support K-pop artists and musicians. It will help them with album releases, music promotions and help them appear in programs in the U.S.
Photo by: Kakao Entertainment Newsroom
