KT-backed Genie Music acquires Millie’s Library Genie Music buys e-book startup for $39 mil to expand audio content business

Translated by Kim So-in 공개 2021-09-14 07:58:53

이 기사는 2021년 09월 14일 07:55 더벨 유료페이지에 표출된 기사입니다.

Genie Music, the online music steaming service operator backed by South Korea's biggest telecom company KT, acquired a controlling stake in e-book service startup Millie's Library, aiming to expand its audio content business.

According to the company Friday, Genie Music acquired a 38.63% stake in the e-book startup for 46.4 billion won ($39 million).

Millie’s Library is a subscription-based e-book service startup, providing different types of e-books including texts, audio, and interactive chatbooks. The platform launched its e-book subscription service in 2017 and had around 3.5 million subscribers as of May. The number one e-book platform in the country has some 100,000 e-book titles and some 3,000 audiobook titles. About 1,000 audiobooks are added to the library every month.

The KT-backed music streaming platform seeks to expand its audio content business by acquiring the management rights of Millie’s Library. Genie Music has expanded its customer base by attracting LG Uplus and CJ ENM as shareholders. It has recently established a strategy to increase its market share by upgrading its services. The music service provider can expand its business to e-book-based voice services through the acquisition.

Millie’s Library can help Genie Music enhance its artificial intelligence (AI)-based music service. The AI technology that provides customized content for each user based on an algorithm is getting more important in the music platform industry.

However, Millie’s Library has yet to make profits, recording net losses of 6.3 billion won in 2018, 9.2 billion won in 2019, and 4.8 billion won in 2020.

It is a rare case that a KT’s affiliate invests tens of billions of won in a loss-making company as the telco giant has focused on generating stable cash flow based on its wired and wireless network business.

The move is seen as a change in its M&A strategy after KT chief executive officer Koo Hyun-mo took office two years ago. Koo has emphasized the development of new businesses, with subsidiaries functioning as main pillars. He created the future value task force last year and promoted the task force in just one year. KT’s management and planning division delegated its authority to carry M&As to the future value promotion office.

KT paid attention to the fact that Millie’s Library’s revenue has continued to increase from 1.6 billion won in 2018 to 19.2 billion won in 2020 despite its continued net losses.

“The acquisition of Millie’s Library has enabled us to overcome the low-growth phase of the music streaming market,” said an official at Genie Music. “We plan to increase the corporate value by providing creative audio contents based on the AI technology.” (Reporting by Pil-woo Choi)
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