South Korea: Company managing TikTok creators pursues profit

The Korea Herald via Asia News Network

14:45 JST, December 26, 2022

Soon Ent. is South Korea’s top TikTok creator management firm, home to over 140 creators whose total number of followers amounts to 940 million. This includes the nation’s No. 2 creator WonJeong, who recently surpassed 50 million followers. He is the only South Korean to reach the milestone other than K-pop supergroup BTS.

Soon Ent.’s CEO and founder Park Chang-woo said the company is now looking to expand its global outreach, not just in terms of its creators but also its business portfolio.

“It’s a set path for us to go overseas. We’re closely monitoring the global market, and this year, we established an overseas business department,” Park said during an interview with the Korea Herald conducted in November at Soon Ent.’s building in Hapjeong-dong, western Seoul.

Under a newly launched department, Soon Ent. has brought into its circle the top TikTokers in six countries — Germany, France, Mexico, Kazakhstan, Australia and Russia — which now makes the company a top 3 player among TikTok’s official multichannel network management companies, according to Park.

The numbers are big, but the questions of how Soon Ent. makes a profit and what corporate value it has still remain unanswered. The CEO said this is the imminent challenge that Soon Ent. must tackle, especially as he considers listing the firm on the stock market in the future.

“Our top priority and goal for now is to turn the 940 million followers into a real profit,” Park said.

Soon Ent. has pushed through with aggressive growth in its talent pool because each and every creator holds value as a marketing platform.

“TikTokers are different from celebrities. Their TikTok account itself is a channel for advertising. For example, if we release an ad on WonJeong’s account, it reaches 50 million people, which is close to the entire population of South Korea. Even the most high-profile celebrities fail to rack up that kind of number on TikTok,” Park said.

The world’s biggest K-pop girl group Blackpink has 37 million followers on TikTok as of Dec. 6, almost 15 million followers short of WonJeong. Soon Ent.’s top creators include Sia Jiwoo (26 million followers) and Changha (22.8 million).

TikTok itself is strengthening its marketing power every year. Following its official global launch in 2017 by Chinese company ByteDance, TikTok saw annual revenue of $150,000 in 2018. In 2021, it recorded $4.6 million in annual revenue, a jump of almost 3,000% in just three years, with most of it from marketing profits. The number is expected to more than double this year according to research firm Insider Intelligence, reaching close to $10 million — exceeding its rivals Twitter and Snapchat combined.

The media environment itself is evolving to become a place where short-form platforms have an advantage as a commercial tool, Park noted.

“The key element lies in who has the biggest buying power. Right now, it’s the MZ generation and this population can rarely sit through long-form content. They try to multitask while watching YouTube or TV, but TikTok can grab their attention for at least 15 seconds. To advertisers, this power to make their target consumers focus for that 15 seconds is what matters,” he said. The MZ generation is a local term referring to millennials and Generation Z.

Indeed, in recent years, major companies and brands, and even the finance sector, are increasingly launching promotions and collections targeting the MZ generation. According to Forbes’ data, Gen Z (those born from the mid 1990s to the early 2010s) made up 40% of the total consumers in U.S. in 2021. A similar trend has been seen in South Korea recently.

This is why Park does not limit Soon Ent.’s role to being a mere TikTok multichannel network, but a global marketing agency with expertise in short-form entertainment content.

“Unlike YouTube, the view count itself doesn’t directly link to profit. Almost 95% of our profit comes from advertising. Hence, it’s not the content itself that matters but through which creator that content is being released,” he said.

Park defined TikTok as social media, rather than a video streaming site, due to its close engagement between the creator and the viewers. A video with over 100 million views leads to an average of 15% engagement in which viewers make a direct response such as pressing like or commenting, he said. On YouTube, even a 5% engagement on average is considered good.

“So among the 940 million followers, we assume at least 50-60% of them are solid targets. To keep up with this, we collect real-time data of the viewership and give advice on how to respond and make strategies for each of the creators and their fandom base. This is Soon Ent.’s strength,” he said.

National and linguistic barriers are nonexistent in the world of 15-second videos, and this adds to TikTok’s global outreach. According to Park, every creator has a major fandom in different countries and cultures. For example, Soon Ent.’s Kejimin has 70% of his 8 million followers based in Indonesia, whereas more than a quarter of Shinsama’s 16.7 million followers are in the Philippines. WonJeong also remains unfamiliar to most South Koreans despite his stardom overseas.

When Park first founded Soon Ent. in 2016, it was a performance production company. He saw the opportunity in TikTok when two of his dancers garnered followers exponentially on the platform in 2017. Compared to the rigid and overwork culture of the performance industry, TikTok opened Park to a new opportunity in making profits.

“Everyone was jumping into YouTube then. Compared to that, TikTok was a blue ocean. I opted to jump in where no one else did, and luck followed as well,” Park said. Soon Ent. was the first company to be officially licensed by TikTok as both a multichannel network management firm and a media lab for the video sharing platform.

In the long term, he aims to turn Soon Ent. into an entertainment company. Music and dance are core elements to many TikTok videos, and TikTok is ultimately the most efficient platform to spread a new song, especially for local singers, the CEO said.

Not only do K-pop songs go viral globally via TikTok, some K-pop singers now intentionally collaborate with TikTok creators to promote new songs. According to Park, in the case of the U.S., TikTok has become one of the main tools that singers and labels turn to for global promotions. Stars such as Jason Derulo and Charlie Puth have already been putting out songs targeting the platform itself.

“DanceKang from our company is a creator specializing in collaborating with K-pop singers. He’s paid for each piece of content because it’s faster to promote through him than to make a new account under the group’s own profile and start from scratch,” Park said.

Park said the firm has a deep interest in expanding into the music industry. Soon Ent. recently signed an exclusive deal with a music producer and is currently in the process of making its own in-house label.

He also pointed out that the short-form industry will open up more opportunities for people who have talent, but aren’t able to scale the high walls of the entertainment industry. In the end, he hopes to be a bridge for creators who aim to enter the mainstream sphere.

TikTok is where anyone has the potential to make content based on their uniqueness, he said.

“Although this does not guarantee success and the reach might be shallow, they’re able to show themselves to the world here. And hopefully, Soon Ent. can become a company that provides more opportunity outside of TikTok for our creators.”