Sohu takes a 6 percent stake in Keyeast

Chinese Internet company Sohu.com Inc announced on Thursday that it will invest $15 million in South Korean artist management agency Keyeast Co Ltd to become its second-largest shareholder.

Sohu will hold 6 percent of Keyeast and become Keyeast's exclusive Internet partner in China.

Founded in 2006, Keyeast represents a number of celebrated actors and actresses, including Kim Soo-hyun, who starred in the hit TV drama My Love from the Star, and Bae Yong-joon, who still owns 29 percent of Keyeast's stocks.

Keyeast said it chose Sohu as its partner in China because of its diversified business portfolio, which is what Keyeast has been seeking for years. Sohu's strength in publicity and its abundant resources will provide strong support for Keyeast to enter China.

"We may have the preemptive right to buy the works produced by this company in the future. Keyeast will provide Sohu opportunities to get involved in the reporting in South Korea. When their artists come to China, Sohu will be able to provide updates on our online entertainment news. China is such a larger market than South Korea that Keyeast's works will be able to sell at a nice price," said Charles Zhang, chairman and CEO of Sohu.

TV dramas from the United States used to be Sohu's focus. However, as the government tightens its control over US TV dramas broadcast on video websites, Sohu is attaching more importance to popular South Korean TV dramas, according to Hao Xi, an analyst at EntGroup Consulting.

Pang Yiming, an analyst with research company Analysys International, agreed that South Korean TV dramas and entertainment programs are winning over the Chinese audience, especially the younger generation.

As a result, Baidu Inc announced in May a strategic cooperation with S.M. Entertainment Co Ltd, which is also from South Korea, to help with the licensing of the latter company's copyrighted music and videos in the Chinese mainland.

However, Pang still urged online video websites to come up with more creative ideas other than competing for copyrights or commercials.

"With the rise of mobile users, video websites should come to understand that they can be more than a content provider. We really look forward to this cooperation between Sohu and Keyeast to breed more creative attempts," she said.