A paradigm shift is expected in the Korean entertainment industry this year with an influx of massive capital from tech and media companies.

On Monday, tech giant Kakao said it would acquire major label LOEN Entertainment, a move which came after media colossus CJ E&M took over several entertainment firms.

Buying LOEN, which houses hot-shot musician IU and runs the nation’s top music platform Melon, the operator of KakaoTalk is poised to jump into the global entertainment market, according to industry watchers.

Entertainment and media giant CJ E&M recently bought two hot-shot entertainment companies -- label Culturedepot, home to top actress Jun Ji-hyun, and Hwa and Dam Pictures. It also inked a strategic partnership with hip-hop label AOMG and B2M last year.

With capital inflow surging in the industry, some experts have raised concerns about their possible monopolistic practices in the market.

“When combined with Melon‘s 50 percent market share and Kakao’s huge mobile platform, the firm’s monopolistic position would get much stronger,” a market insider said.

By Shin Ji-hye (shinjh@heraldcorp.com)