Kakao M


Kakao M is a South Korean entertainment company established by Min Yeong-bin in 1978. It is currently one of the largest co-publisher companies in South Korea. The company operates as a record label, talent agency, music production company, event management, concert production company, and music publishing house.
, the company was the leading record company in South Korea by net revenue according to the statistics compiled by the Korea Music Content Industry Association through the Gaon Music Chart ; it is also the second leading company in terms of album sales. LOEN Entertainment became a subsidiary of Kakao in January 2016 and was subsequently renamed two years later.
Online music sales account for most of the company's profit, with 93.9% of revenue coming from online music sales. The label also distributes CDs of some other entertainment agencies in South Korea through its branch 1theK, but makes less than 5% of its revenue through them.

History

1978–2008: Founding of Seoul Records

Kakao M was founded as Seoul Records in 1978 by Min Yeong-bin as a subsidiary of YBM Sisa, a company mainly involved in creating language-learning tapes. The company was officially registered in 1982, and in 1984 it began to produce and distribute records of classical and traditional music. It was registered as a venture capital company in 1999 when it began to sell albums while operating an online shop. In 2000, the company's name was changed to YBM Seoul Records and it began to operate on KOSDAQ. The company joined the IFPI in 2003. Korean conglomerate SK Telecom bought a 60% share of the company in 2005, and YBM Seoul Records subsequently became part of SK Group.

2008–2016: Name change to LOEN Entertainment

As of 2008, the company has been known as LOEN Entertainment. LOEN stands for: Live On Entertainment Networks and
LOve + ENtertainment
Kakao M took charge of SK Telecom's online music distribution service, MelOn, in 2009. MelOn is currently the most used online music sales site in South Korea.
In 2012, the company signed a deal with streaming site Viki so that content from their artists would be featured on their site.
In August 2012, the recording artists under Kakao M collaborated to release a collaborative EP titled LOEN Tree Summer Story under the collective title 'LOEN Tree'.
On July 18, 2013, Affinity Equity Partners, through its subsidiary Star Invest Holdings Ltd., bought 52.56% of Kakao M's shares, leaving SK Group with only 15%. Five months later, Star Invest Holdings acquired RealNetworks, Inc.'s 8.83% stake in the company. The company was reorganized to include two labels: "LOEN Tree" and "Collabodadi".
On December 18, 2013, Kakao M acquired 70% of shares in Starship Entertainment, making it as an independent subsidiary of the company.

2016–present: Acquisition by Kakao and name change

On January 11, 2016, Kakao M was acquired by Kakao Corporation.
On May 11, 2017, Kakao M announced its strategic drama production alliance with CJ E&M's drama production subsidiary Studio Dragon Corporation. Among the plans under the alliance is producing dramas based on web novels and webtoons on KakaoPage and Daum Webtoons. On August 25, Kakao M announced that its joint venture with Studio Dragon will be called as Mega Monster.
The company has also signed actress Kim So-hyun through setting up her own independent label, E&T Story Entertainment, which is led by her long-time manager Park Chan-woo.
Upon approval by the company's board of directors in a December 20 meeting, the company is known as Kakao M Corporation since March 23, 2018. The letter M in the new corporate name stands for three things: Melon, Music and Media. The company will now also have a corporate catchphrase, We Entertain.
Barely a month before the company's relaunch under its new name, Sean Seong-hoon Park resigned from both his positions as CEO of the company and chief strategy officer of its parent company, and later moved to Netmarble Games. He was replaced by Melon division head Lee Jae-wook.

Corporate identity

Company name

The company name is Kakao M, the letter M stands for:

Catalog numbers

, Kakao M currently uses two types of catalog number codes for its releases: the L10000**** series and the L20000**** series.

Controversies

Price fixing

2011
Kakao M, along with then-parent SK Telecom, was one of the 15 companies fined and sued by the Korean FTC for price rigging in 2011. The company was fined $9.6 million for its role in the scheme.
2016
On October 9, 2016, the Supreme Court of South Korea handed out a 100 million won fine each to Kakao M and its closest competitor Genie Music for colluding in price fixing, dating back to a case filed in 2008. Co-CEO Shin Won-soo, who was the sole CEO at the time being, was also sentenced to pay 10 million won.

Stealing royalties

On September 26, 2019, it was revealed Former Loen Entertainment CEO Shin, Former vice-president Lee, Former HQ Director Kim have been charged with stealing 18.2 billion won in royalties from Melon, artists, and producers.

''Incredible'' promotion conflict

In 2013, Kakao M made a deal with C-JeS Entertainment to promote and distribute Junsu's second studio album Incredible. Days before the album's release, C-Jes was reportedly notified by Kakao M that they would distribute the album but had scrapped plans for promotional marketing and broadcasting Junsu's upcoming showcase on MelOn, although they would be able to broadcast it on LOEN TV. Promotional banners regarding the album's release on MelOn also disappeared from Kakao M's social media accounts. C-JeS subsequently threatened to remove mentions of Kakao M from Junsu's upcoming showcase and to file for a civil appeal to the Fair Trade Commission and Anti-Corruption and Civil Rights Commission.
In response, Kakao M stated that they were still in discussions regarding the album's promotion and that nothing had been confirmed prior to the relevant article's release. They pointed to the showcase event page on MelOn's homepage still being up as evidence that promotions were going ahead as planned. C-JeS responded saying that they had begun receiving pre-orders for the album and entries for the showcase event without a response from Kakao M.
Following media attention, the two companies met on July 8 and resolved the dispute. Incredible was promoted and distributed by Kakao M as planned.

Business

Kakao M has three companies, which the concept calls as "company in company". The company also plans to set up another one in the future.

Melon Company

Melon Company is Kakao M's online music service company, operating Melon, the most popular music service in Korea, with 59% of all users in South Korea as of 2013. That year Soompi ranked MelOn as the third most influential entity in the K-pop industry.

Music Content Company

Music Content Company is Kakao M's music content production company, which includes the music content brand 1theK, ticket selling portal Melon Ticket and distributes over 300 titles per year, working with independent agencies to invest in music production. The name '1theK' indicates its aim of creating one source for worldwide K-pop content.

Multilabel

Kakao M manages its artists within the companies under its Music Content Company, including LOEN Tree and Collabodadi. Collabodadi artists were moved to LOEN Tree in September 2015 and later LOEN Tree renamed as Fave Entertainment in February 2017.
In 2015, Kakao M acquired independent label Starship Entertainment and Cube Entertainment subsidiaries label A Cube Entertainment, as well as King Kong Entertainment acquired by Starship in 2015.
In June 2016, Kakao M established an independent label Mun Hwa In.
In December 2017, Kakao M established a one-person agency E&T Story Entertainment for actress Kim So-hyun, which is led by her long-time manager Park Chan-woo. As January 2018, Kakao M's independent label Plan A Entertainment has taken over the agency.
On June 27, 2018, Kakao M made strategic investments and created partnerships with three actor management agencies BH Entertainment, J.WIDE Company, Management SOOP, and Korea's leading advertisement model casting agency, Ready Entertainment in order to globalize its content.
On January 13, 2019, Kakao M acquired independent label Blossom Entertainment.
On February 13, 2019, Kakao M released a statement that Plan A Entertainment and Fave Entertainment will be merging on April 1.
On December 10, 2019, Kakao M established new label EDAM Entertainment to manage their long-time soloist IU.

Video Content Company

Video Content Company is Kakao M's media production company, which includes Krispy Studio and Mega Monster.
Just almost a week after its name change, Kakao M acquired a majority stake in Nylon Media Korea, publisher of the Korean edition of beauty and fashion magazine Nylon, from Seoul Cultural Publishers.

Others

In April 2018, Kakao M and its parent company formed the CSR venture Kakao Impact Foundation.

Subsidiaries

, the following companies are the subsidiaries of Kakao M: