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IP is the new Real Estate

Real estate differentiates wealthy people from rich people. During the economic boom of the 1980s, Japanese corporations and investors had a lot of cash and sought investment opportunities outside Japan. Real estate markets in global cities such as New York, London, and Paris were seen as attractive due to their potential for high returns and as a hedge against currency fluctuations and inflation. This foreign real estate played a significant role in Japan's eventual recovery from its financial crisis. In the 2000s, as the Japanese economy recovered and the yen appreciated against the US dollar, Japanese investors reinvested in foreign real estate, particularly in the US and Europe, for diversification and higher returns. Like this, real estates are a game changer for overcoming deflation. But what is the new Real Estate in the modern tech space?

Intellectual property (IP) is a new form of real estate because it represents a property right that can generate economic benefits over an extended period. Like real estate, intellectual property can be bought, sold, licensed, and leased to generate income and returns for its owners. Here are some similarities between the two:

  • Scarcity — Just as only a limited amount of land is available in a particular location, a limited amount of intellectual property is available in a given field or industry.
  • Licensability — Real estate and intellectual property can be rented, leased, or licensed to generate income.
  • Appreciation over time — Real estate and intellectual property can appreciate over time. For example, a well-located piece of land or a valuable patent can increase as demand for the resource increases.
  • Steady Stream of Income — Real estate and intellectual property can generate a steady income stream over an extended period. For example, a landlord can collect rent from a tenant each month, while an intellectual property owner can collect royalties from licensees or users of their IP.
  • Requires Maintenance — Real estate and intellectual property require care and maintenance to preserve value. A landlord must maintain their property to keep it in good condition, while an intellectual property owner must keep their IP up to date and enforce their rights to prevent infringement.

Japan has also benefited from this IP amid a stagnant economy ("the lost decades"). Japan has a rich history of creating popular and influential intellectual properties (IPs) that have significantly impacted global mass media. Some examples of popular IPs from Japan include Pokemon, Anpanman, Yu-Gi-Oh!, Mario, Gundam, Hello Kitty, Dragon Ball, etc. These IPs have helped to keep Japan competitive in the global mass media industry by establishing a solid reputation for creativity and innovation and generating outstanding revenue streams.

This edge is why Naver and Kakao, two Korean Google, are so paranoid about purchasing IPs. For example, Naver acquired Wattpad, and Kakao acquired Tapas and Radish media. All of them service Web Cartoons (Webtoons) in the US. From an Asian point of view, while Hollywood remains an unbeatable champion in global mass media outlets, the western market still did not experience the "Webtoon Culture Strike," which I think is an unstoppable future and out of imagination from none of the silicon valley founders (because they never saw the impact of it.) For example, over half of the globally popular Korean-based TV shows are webtoon-based. Long story short, Webtoon has a decisive edge because:

  • Webtoons can be produced by a single person, lowering the opportunity cost compared to a full-on production studio.
  • Competing in the OTT market is too expensive (both in customer money and time.)
  • Webtoons generally profit from advertising & collab & IP revenue, not customer payment.
  • Modern people have a lower attention span to read texts or watch extended TV shows.
  • Webtoon creates habit.

For example, for free, I can watch 20 episodes of different Webtoons in 10 minutes on Naver Webtoon and Kakao Webtoon. Remember when Quibi failed? ... but that's a story for another day.