More and more, popular Asian messaging apps are launching music streaming after they reach critical mass.
The maker of a popular South Korean messaging app has invested in company behind South Korea's most popular music streaming service. Kakao has invested $1.55 billion for a 76.4 percent stake in Loen Entertainment, the operator of the MelOn music streaming service. MelOn, launched in 2009, is the biggest music streaming service in South Korea, with 28 million users according to the the Korea Times, although its subscriber count is far lower.
MelOn will join the country's most popular mobile messaging app, KakaoTalk, which reportedly had 48 million active users in February. The app is the flagship product of Kakao, a South Korean tech company with a $5.7 billion market capitalization. “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," Kakao CEO Jimmy Rim.
South Korea was early to adopt music subscription services -- its $139.6 million of subscription revenue generated in 2015 accounted for 92.3 percent of all digital revenue and 53 percent of total trade revenue, according to the IFPI. As a point of comparison, revenue from both subscriptions ad-supported streaming made up 14.3 percent of U.S. trade revenue.