Clearly two South Korean tech giants see massive potential in the mobile storytelling market. In 2021, Naver, owners of the popular Webtoon app, bought Canadian fiction site Wattpad for $600M with plans to merge the two companies. Competitor Kakao snapped up US-based Tapas for $510 million and fiction platform Radish in a separate deal worth $440 million. Today Kakao announced it is merging its two acquisitions, along with Asian fantasy fiction platform Wuxiaworld, under the leadership of Tapas founder/CEO Chang Kim, who also serves as Chief Global Strategy Officer at Kakao.
“I’m very excited by the challenge presented by the super competitive global entertainment market, and I know this merger positions us well with the momentum we need to solidify all our capabilities and maintain our competitive edge as a content IP powerhouse,” Kim says. “We look forward to continuing our innovative journey in storytelling and reaching new audiences with compelling stories across multiple categories.”
In both cases, the play is to feed the massive demand for fresh content from both Hollywood and the rising generation of fans by developing new stories, new talent and a new model for accelerating development of IP across media. Short fiction and episodic comics have low barriers to entry for creators and provide a big storytelling payload for fans, especially using Tapas’s model of “snackable” content that can be enjoyed quickly on mobile devices.
While mobile comics content is already a mature media market in South Korea, there’s a lot of white space elsewhere in the world to increase adoption rates. This latest move shows the race is on to turbocharge the growth of the mobile-first digital model by building economies of scale.
“Kakao Entertainment is a key player in the growth of storytelling globally,” said Jinsoo Lee, CEO of Kakao Entertainment. “With our content IP expertise and the outstanding content creation capabilities of the new company, we will accelerate our efforts to become a dominant regional and global player in the market in the next three years.”
Tapas, which launched as a bootstrap startup in 2012, built a global audience that has racked up over 9.5 billion pageviews of 103,000 original series, mostly mobile-digital comics and light novels, primarily targeting young women age 18-24. The app hosts more than 103,000 original series, a combination of originals done by established creators, licensed content, and user-generated content.
In recent years, they have invested in a production studio to speed development of original IP into streaming content, feature films, animation and games. These vertically-integrated capabilities sweeten the deal for creators to monetize content on the site by building their audience and their skills.
Tapas saw ten times year-over-year revenue growth in 2021, averaging more than $2 million per month for creators, making it one of the top three grossing comic apps in the US. Integrating Radish and Wuxiaworld into that framework matches Naver’s moves with Wattpad and Webtoon in terms of capabilities if not scale, and sets the stage for an even fiercer competitive battle.
“The agreement will provide a major leap forward for Kakao Entertainment in the burgeoning K-content industry and offer exciting new opportunities in the North American storytelling market,” says Jinsoo Lee, CEO of Kakao Entertainment. “Tapas, Radish, and Wuxiaworld™ each bring a huge lineup of content IPs to the table, and when we put them under one banner with Kakao Entertainment’s proven ability to generate and monetize original stories, it will pave the way for unparalleled growth and generate more success stories.”