Integrating IT Technology into MCN Management (2)
This article was originally published in Platum.
All rights are reserved to Platum. Platum article URL: https://platum.kr/archives/207050
-adoba has a 40-person office in Chengdu, Sichuan Province. The Chengdu office has twice as many employees as the Seoul headquarters. What is the role of the Korean and Chinese offices?
Ahn: Initially, we had most of our organization in Seoul. Now we have a separate R&D organization in Chengdu. Solutions are developed, planned and operated in Chengdu. The same goes for partnerships, problem solving, and crisis response. What we’re experimenting with is operating as if our headquarters were in Chengdu. The Seoul headquarters is approached from a business perspective, with the concept of being the first local branch. Chengdu oversees solutions and platform partnerships, while Seoul is in charge of creator training, promotion, business, and sales.
-Why is the office in Chengdu?
Ahn: In China, we call Beijing, Shanghai, Guangzhou and Shenzhen first-tier cities. Then there are large cities that we categorize as “new first-tier cities,” and Chengdu is one of them. Chengdu is a metropolis and a consumer market with a population of over 20 million. One of the nicknames of Chengdu is “the castle of Wang Hong”. There’s a lot of Wang Hong activity, but there’s also a lot of purchasing power for what they sell. That is why we chose Chengdu.
-Dae-il Park is in charge of subsidiary operations. He is responsible for overall service planning and design as well as platform partnerships.
Ahn: Mr. Park has a history of working for Chinese companies and starting his own business in Korea, most notably as a popular Wang Hong (aka “Ttie”) on Chinese video platforms. There is an annual award for foreign creators in China, and Mr. Park was selected as an outstanding Wang Hong for three consecutive years from 2021 to 2023.
There are a lot of qualities that a general manager of a company should have. From a business perspective, it could be being good at management, it could be being financially savvy with strong numbers, it could be being patient, or it could be being a good strategist. Mr. Park’s greatest strength is his understanding of the creator economy. The biggest part of the Chengdu office is R&D, but it’s also very important to build and maintain relationships with Chinese platforms on the ground. The experience of working directly with platforms as Whang Hong is very helpful and competitive.
-How did your relationship start?
Ahn: Even before we started doing business together, we exchanged views on the Chinese market. When Mr. Park started a company in Korea, I advised him as a senior founder. The COVID-19 crisis brought us together. Due to the nature of our business, we need a lot of Chinese employees. However, due to various restrictions on hiring foreigners in Korea, we could not hire as many as we wanted. After much deliberation, we decided to set up a subsidiary in China and transfer various functions there. However, because of the Corona pandemic, it was difficult to do it directly. While I was thinking about it, I had an online conversation with Mr. Park, who was in China, and suggested that we do it together. He was also interested in the creator industry, so the timing was perfect. As a result, thanks to Mr. Park, the results have exceeded our expectations.
-What brought Mr. Park to adoba?
Dae-il Park, President of Chengdu (hereafter “Park”): Creators have a vague fear of MCNs. That’s because they don’t see the benefit of belonging to an MCN. I thought that what MCNs could do in China and Korea was pretty much the same, but when I was working as a creator, other creators and followers often mentioned adoba.
It’s a little different in China, where the followers are more concerned about the creators. It’s like, “Are you living off this?” “You don’t have that many views, are you okay?” “I’ve been following you for a while, but why don’t you have more followers, I’m so worried.” There are so many comments like that. Followers also give creators a lot of suggestions for things their subscribers might like, and even write scripts for them. I also got a lot of comments that I wasn’t progressing because I wasn’t in an MCN, especially since I’m Korean, and they told me to join adoba, which is a Korean MCN.
So, I had such a good impression of adoba, and during the pandemic, I started talking to CEO Ahn. We had a relationship in the past, and when I heard that they were opening a subsidiary in China, I thought I’d give it a try. I saw that adoba’s business direction itself made sense, regardless of everything else.
– Being a lone creator and running an organization are two different roles. You’ve created an organization of 40 people and there must have been many twists and turns.
Park : The number of people grew when I hired one or two people for the company. My experience in a similar role in my previous job in Shanghai was helpful. During the recruitment process, I often met candidates who recognized me as Wang Hong.
Ahn: There is a Chinese MCN called Luhnn(如涵). It was an MCN that was successfully listed on NASDAQ, and behind it was Zhang Dayi (張大奕), a famous Wang Hong. A single creator played a big role in the listing. Similarly, Mr. Park has high ambitions for the creator business. He will share the knowledge and experience he gained as Wang Hong with other creators.
-By the way, Mr. Park is a well-known creator of foodie content. Is there a reason why you decided to focus on food?
Park: It’s not content that I eat a lot, but I look for delicious things. It’s a little bit of gourmet content that I explore. In the past, I ran a Naver blog in Korea, and I also covered food content. Chengdu is good because there are so many things to eat.
-Mr. Park also started a business in Korea. It was a food delivery business for Chinese people in Korea.
Park : It was a very hands-on business. However, the creator business is also traditionally labor-intensive. That’s why I strongly agree with Mr. Ahn’s idea to solve this industry with IT solutions.
Ahn : It’s hard to control the cost structure because it’s a very manual business. This is probably the reason why the business of most MCNs has become difficult. If we can solve it with IT systems and solutions, we see a lot of room for growth.
– What do you think is Adobo’s greatest strength as a creator?
Park : As a creator, it’s a very welcome service. It takes care of everything from start to finish at once and creates an environment where you can focus on creating more. Wang Hong in China also said that the ability to leverage global multi-platforms with a single piece of content is appealing.
-Mr. Ahn runs the business from an IT perspective, while Mr. Park has an emotional approach from a creator’s perspective. What kind of synergy do you have?
Ahn: I’m an engineer by background, so I think in a data-driven way. How to innovate the creative industry with IT is the direction of my thinking. We want to take data, process it and turn it into a system. But there are parts that should not just be solved functionally. That’s where Mr. Park comes in. He knows what features creators like and what they really need. This is the foundation on which adobaro is built as a realistic solution that creators can embrace.
-Is there a possibility of a platform like adobaro in the future?
China is a difficult market to enter, no matter how good the technology or solution is functionally. adoba has been in this market for four years, and we’ve had to go through a lot of challenges and build experience and technology along the way, and I think that’s something that can’t be easily gained or replicated. With that as a foundation, we now have the space to look beyond China to the rest of the world.
-I recall that you have raised a significant amount of investment for 2020. I’m sure there will be additional investment needs to fuel expansion. Do you have any financing plans?
Ahn: We’ll have a global launch in June, and then we’ll have the numbers for a while.
It’s only meaningful if the performance of the transition from traditional MCN management to IT solutions, specifically the results achieved by the Global-to-China team, exceeds the results achieved by the Korea-to-China team. When this difference is evident, it means that it is an opportune time to seek additional funding.
Our business is to seamlessly launch creators across platforms and build businesses with the impact they create. The premise is that we need to achieve economies of scale. Compared to the entertainment industry, the MCN industry is not fed by one or two or a few success stories. There has to be a methodology to increase scale, solutions to give creators more opportunities. If we can prove with numbers that we can scale out, we’ll have crossed a big hurdle.
-I have heard that local and international VCs have been hesitant to invest in MCNs recently.
Ahn: We are creating a solution that addresses the underlying reasons why MCNs are struggling. Of course, we shouldn’t just say it, but we want to prove it by the market’s response.
-adoba is a company that seized opportunities by building a strong Great Wall in China. On the contrary, there were also difficulties due to prejudice against China.
Ahn : We’ve had two successful investment rounds in Korea. We were able to get to that point because we met good VCs and partners. Even those who didn’t invest appreciated our hypothesis and validation process. But in the end, the reason they didn’t invest was that our business model in China made it difficult for them to invest. There is a common perception that doing business in China is uncertain and risky.
We needed a solution to this problem. We have a principle of doing business directly in China. There is a perception that doing business in China requires a local to be in the middle. That’s not wrong, but it’s not 100% true. It’s not uncommon for someone to be in the middle, which makes the risk much higher. adoba has direct partnerships with 12 platforms in China. We don’t go through anyone else locally, but we have a structure that allows us to put our creators directly on Chinese platforms and make the payments. That’s a strength that we’re proud of. We’re still learning about the Chinese market and how best to deconstruct and reduce risk.
-With the global launch of adobaro, international creators will be able to enter the Chinese platform. Wouldn’t companies and brands also be able to enter China?
Ahn: That’s right. That’s what we’ve been testing in Seoul, and we’ve come to the conclusion that there’s a real need. There are a lot of companies that want to follow the path of creators and content that have gone to China, and there are a lot of brands that want traffic from creators. What brands have been doing is working with Wang Hong in China, which hasn’t been very successful. adoba has proposed a way to work with local creators who can communicate freely, and it has worked well. I think this model can be replicated in the US, Europe and Southeast Asia.
-Mr. Park oversees R&D for the adoba business. What is your vision for the future of the company?
Park: What we are currently pursuing is a ” foreigner-only MCN” that is different from Chinese MCNs. After that, we want to become the number one MCN in China. Right now, we are importing and uploading content from overseas, but I believe that if we gather foreigners in China to create content in the future, it will be more popular. We have a plan to become a locally specialized MCN.
-What does Mr. Ahn see as Adobo’s future plans?
Ahn: We’re going to take the direction of the company from the perspective of an IT company. We will give creators free access to a global platform through our solution called adobaro. We will also provide various programs that are connected to businesses to realize a true creator economy.
