Fandom platforms that have expanded beyond celebrities to creators are drawing attention in the mergers and acquisitions (M&A) market. As fandoms emerge as a core asset that creates corporate value beyond being a simple consumer group, corporations seeking business expansion are moving into M&A and investment.
On the 10th, according to the entertainment industry, "Essentory," which operates a fandom platform, sold its management control to the multi-channel network (MCN) corporations Playtown.
A fandom platform is a space where celebrities or creators provide exclusive content to fans, and fans support and communicate. Although the sale price is not large, the startup that built the fandom platform is being assessed as having proven new growth potential and value.
Playtown is a company that has YouTubers with more than 300,000 subscribers as well as channels reaching 3.61 million. It acquired Essentory on the judgment that its affiliated creators could use the fandom platform to expand their business.
Recently, the leather specialist company UNI CHEM also acquired management control of the fandom platform corporations High& Co., Ltd. (HI&). The acquisition price is 6.12 billion won. High& is a platform where numerous actors, including Ji Chang Wook, Lee Jong Suk, Park Seo Jun, and Han So Hee, are active.
Corporations regard fandom platforms as an "intangible asset" that holds highly loyal fan activity data, beyond a means of content distribution. With a view to using intangible assets as a channel to expand their own businesses or generate new revenue, M&A of fandom platforms has been active recently.
Domestic entertainment corporations have long devoted efforts to building fandom platforms. DearU, which started as a subsidiary of SM Entertainment, is a prime example. DearU is launching messenger services and more to connect singers and fans.
SM Studios holds 31.16% equity, SM Entertainment holds 11.42%, and JYP Entertainment holds 10%, respectively. JYP Entertainment acquired equity in DearU in 2021, expanding its business into fandom platforms.
HYBE also launched "Weverse" in 2019. Its monthly active users (MAU) are nearing 10 million. Kakao's subsidiary Kakao Entertainment unveiled the fandom platform "Berriz" in the first half of this year. The plan is to create value across diverse areas by encompassing not only artists and creators but also content IP such as webtoons, drama, and films.
The task ahead is generating stable revenue. DearU stayed in the black for a third straight year, recording about 25.4 billion won in operating profit last year, but posted a loss of about 1.3 billion won in the first half of this year. Weverse's operator, Weverse Company, recorded operating losses of about 24.2 billion won in 2023, last year, and the first half of this year.
An industry official said, "Fandom platforms require large initial investment expense, and server and infrastructure operations and marketing expense are significant," and noted, "Losses are occurring because the focus is on growth strategies rather than revenue in the process of expanding and maintaining a fandom base, but as 'economies of scale' are being established, a turnaround in performance is well within reach."
Despite the challenge of withstanding fierce competition and building a revenue model, some forecast that fandom platforms have high growth potential, to the extent that they will expand to creators.
Kim Min Gi, CEO who founded Essentory, said, "Pursuing sustainable creative work through fandom support is an ideal structure," and added, "There is demand for healthy and trendy fandom platforms, especially among younger people, so the market is likely to expand."