SEOUL, Feb. 19 (Korea Bizwire) — It’s no secret that K-pop has grown into a multi-billion dollar industry with artists bred here becoming global household names supported by fans from all over the globe.
Now, the agencies behind these singers are scaling up their businesses to make a name for themselves — either by bulking up their own platforms, teaming up with bigger players in other countries and industries and sometimes even joining hands with rivals.
Big Hit Entertainment, the K-pop powerhouse behind global superstars BTS, is at the fore.
After acquiring smaller local agency-labels over the past two years to expand its artist portfolio, the company went public in South Korea’s main stock market KOSPI in October.
Three months later, Big Hit has signed a series of deals with industry giants, like Naver, the country’s biggest portal operator, and Universal Music Group (UMG).
It also has strengthened ties with YG Entertainment, another K-pop powerhouse that represents girl group BLACKPINK.
In late January, Big Hit affiliate beNX acquired V Live — a popular streaming platform developed by Naver — while Naver secured a 49 percent stake in the Big Hit subsidiary in a deal that would provide access to a giant platform that serves 35 million monthly active users.
On the sidelines of the deal, Big Hit also joined hands with YG in a deal the two companies said would mutually benefit them through strengthening their industry network and intellectual property (IP) and merchandising businesses.
The series of deals did not end there. Big Hit, YG and UMG signed a multilateral deal on nurturing KBYK Live — a joint venture established by Big Hit and U.S. streaming service provider Kiswe.
A few days later, Big Hit and UMG top executives announced a strategic partnership to debut a new boy band in the United States and have more UMG artists join Big Hit’s fan community platform Weverse.
“Our two companies indeed share values and visions in that we both pursue constant innovations and are committed to providing our fans with genuine music and content of the highest and uncompromising level of quality,” said Big Hit founder and chief Bang Si-hyuk.
“In this sense, I strongly believe that UMG and Big Hit will create a synergy that will rewrite global music history.”
UMG Chairman Sir Lucian Grainge also voiced hope over the collaboration, saying the company is “thrilled to be working together as we launch a new joint venture between our companies that will further accelerate K-pop as a global cultural phenomenon.”
Analysts and experts say that what made these deals possible is Big Hit’s growing clout in fan community platforms and, not surprisingly, BTS, the seven-piece act that has grown from a local band to a global phenomenon.
“Since Big Hit already has its own platform Weverse, there was low possibility that (Big Hit artists) will join V Live. In order to bring in BTS, which is a mega IP, (Naver) yielded their DNA and instead bought a stake in the company that runs V Live and Weverse,” Hanhwa Investment & Securities analyst Ji In-hae explained.
Weverse has grown into a fan community for 16 Korean and overseas artists — including big names like BTS, CL, Seventeen and Gracie Abrams — that sells exclusive tickets to online shows and numerous merchandising products, strengthening its position.
In addition to being a channel for artists and fans to communicate, the fact that a large portion of content sold and streamed through Weverse is paid-for content is what has gotten investors excited about the platform’s commercial potential.
Apart from Big Hit, major K-pop players like SM Entertainment, JYP Entertainment and YG have also been paving the way to build their own platforms or collaborate with one another to get a bigger stake of the thriving industry.
At the height of the new coronavirus outbreak here, when concerts were being canceled or postponed due to social distancing, SM and Naver launched the “Beyond Live” virtual concert brand that debuted in project boy band SuperM’s concert in April.
In August, SM and JYP announced they are taking the initiative further by launching Beyond Live Corp. (BLC), a joint company for virtual concerts.
A month ahead of the announcement, girl group TWICE held a concert through the brand, becoming the first non-SM act to perform.
These companies have also teamed up to counter Weverse.
SM Entertainment runs the mobile fan community Lysn where fans can keep in touch with their favorite artists. The line-up now also includes acts from other agencies, like FNC Entertainment and Jellyfish Entertainment.
JYP, meanwhile, has released a separate app based on Lysn called “bubble for JYPnation,” which allows subscribers who pay US$3.49 to $40.99 to send and receive individual chats with acts like Stray Kids.
The race to get an upper hand in platforms for the K-pop industry is likely to continue for the time being with sales coming from indirect artist activities, such as merchandising and licensing, increasingly growing.
Industry data showed that sales from such activities accounted for 47.8 percent of Big Hit’s total revenue in the first half of 2020, compared with 31.2 percent in 2018.
The fact that the pandemic is showing no sign of letting up is apparently adding pressure on more K-pop agencies and companies to secure platforms for fan interaction and virtual concerts.
“Due to the pandemic, a golden age has arrived for the IP industry. This period, which we have to conquer and survive, is an important time for us to advance,” SM founder and chief Lee Soo-man said in a speech for the 2020 MU:CON, a music industry trade show.
“But at the same time, this will all be useless if not supported by music, which is the fundamental.”