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BTS releases the single Life Goes On – K-Pop changes the music world

The members of BTS while recording the “Today” show in New York City

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Today the new single from the K-pop superhero BTS: Life Goes On is out. This will move millions of fans not just in Korea, but worldwide – and the share price of BigHit Entertainment. The company behind BTS only went public on October 15th. At the end of the first day of trading, the market value was over $ 4 billion. Company boss Bang Sihyuk became a billionaire. From Korea, Bang is changing the global music industry forever.

Bloomberg estimates Bang’s net worth at $ 1.4 billion. He owns 43 percent of the company. The seven members of the BTS group also became multimillionaires. Bang Sihyuk gave them shares worth around $ 8 million each in August. A logical step, because BTS (short for “Bangtan Seonyeondan”, in German “Bulletproof Boy Scouts”) are not the only band in BigHit, but the ones on whose success the growth of BigHit is based.

BigHit Entertainment CEOs on the IPO. From left: Park Jiwon, Bang Sihyuk and Yoon Seokjun.

BigHit Entertainment CEOs on the IPO. From left: Park Jiwon, Bang Sihyuk and Yoon Seokjun.

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Against the backdrop of the corona pandemic, it may come as a surprise that a stock that is so dependent on a band is so successful – in a year in which the concert and tour industry is largely on hold. On the one hand, this may be due to the chart successes of BTS, which were most recently with “Savage Love” and “Dynamite” for weeks at number 1 on the Billboard Hot 100 charts and were successful worldwide. On the other hand, this success is also due to the fact that BigHit understands like no other entertainment company how to expand its stars with total marketing – without losing credibility with the fans.

Even at BTS, everything was not all about the scent of roses and beautiful weather from the start. Until the single “I Need U” in 2015 they didn’t make it into the top 10 of the Korean charts, in 2014 they almost gave up – but around 2017 the band made their breakthrough, even internationally. Chart, YouTube, tour and many other records followed. The peak does not seem to have been reached yet. The hit “Dynamite” set a YouTube record with 101.1 million views within the first 24 hours, “Boy With Luv” feat. Halsey and “DNA” have collected more than a billion views. With their world tour in 2019, BTS not only sold out London’s Wembley Stadium for two days in a row.

BTS “paved the way”, as many ARMY like to say. They paved the way to the West and around the world for other K-pop bands and for Korean cultural products in general. This story has been told many times. What was not so much in focus is BigHit’s business. While it builds on the band’s success, it uses it for a business model that goes far beyond that. BigHit is therefore also successful in the pandemic – although or precisely because Bang breaks with many traditional paths in the music industry.

The development of the file prices of the major South Korean entertainment companies in 2020.

The development of the file prices of the major South Korean entertainment companies in 2020.

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This is also shown by a look at the share prices of BigHit’s three biggest competitors, SM, YG and JYP, which only fell sharply in March and then again in June. Tours had to be canceled due to Corona measures and the uncertainty about the future of the live industry. Since then, prices have recovered. But the live aspect in the music industry plays a big role. Also for BigHit.

Money should be able to flow even without the direct involvement of the stars

In the semi-annual “Corporate Briefing with the Community” in August, Bang Sihyuk discussed the canceled tour. Then BigHits Global CEO Lenzo Yoon (or Yoon Seokjun) spoke about the strategy to become more independent from such uncertainties. He calls this strategy “Artist Indirect Involvement Business”.

BigHit has recognized that capacities for music and video content or marketable experiences such as concerts and shows are limited if you can only fall back on one band or seven young men. BigHit has started scaling across more artists. It raises its own stars and has bought into other companies. The business is arduous because the new brands have to be built first. That’s why BigHit milks every type of content and every opportunity to market a successful act to the last.

Shortly after taking office in spring 2019, Yoon said in an interview: “Even if you only sell a single drop of water, it is important to think about how you can add even more value to this drop.” He was referring to the fan -oriented alignment of his company. Every commercial decision should also be for the benefit and pleasure of the fans. This is what the pathetic company slogan stands for: “Music and Artist for Healing”. Conversely, however, it also means that every drop of content that BigHit produces is monetized as much as possible.

This “Artist Indirect Involvement Business” has been greatly expanded. According to BigHit, it only made up around 20 percent of total profit in 2017. In 2019 the share was 45.4 percent. The share should have increased due to the current situation, with a profit of around 38 million euros in the first half of 2020. But what areas does this “indirect artist involvement” include?

BigHit Entertainment markets all aspects of its stars

Gaming. In 2019 BigHit brought out BTS WORLD with the company Netmarble, which also owns around 25 percent of BigHit, a game that tells a fictional story about BTS and lets users master levels in a kind of card game. The player slips into the role of the manager. There are of course also in-app purchases. The game has its own soundtrack and works with previously recorded photos, videos and voice sequences. There is also the BTS UNIVERSE STORY, a game that makes itself even more independent from the real BTS stars: an interactive storytelling game with recognizable drawings by the band instead of photos.

Books and reading. BigHit already had experience with drawn band members with their webtoons (a kind of digital comic). With “Save Me” a fictional story about the lyrics of BTS was published in 2019. BigHit has its own publisher, Smeraldo Books, which, in parallel with Webtoon, published books containing the thoughts of the characters from the music videos. In addition, the band’s lyrics can be bought in full as high quality books. Recently there have also been a number of Korean textbooks: “Learn! Korean with BTS ”. These are illustrated with cute animated versions of the stars. What leads to …

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Further licensing and brand collaborations include cosmetics (VT Cosmetics), sports equipment (formerly Puma, now FILA), smartphones (Samsung BTS Edition), food (Starbucks products, Baskin Robbins ice cream), jewelry (Stonehenge) and a few others. In some cases the band is involved in the advertising campaigns, but for the most part the lines are self-sustaining.

Advertisement with BTS above a FILA shop in Seoul, South Korea.

Advertisement with BTS above a FILA shop in Seoul, South Korea.

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With an app, BigHit wants to become a one-stop shop for all K-Pop fans

At the core of the BigHit cosmos is the “Weverse” app, developed by BigHit subsidiary beNX. It should become the one-stop-shop for all K-Pop fans, so far beyond BTS-ARMY. BigHit wanted to make itself independent from other players from the start. It started with producing its own variety shows with BTS (“Run BTS”, “In the Scoop”, “Bon Voyage”) and then selling them to TV stations instead of submitting to the rules of their shows.

Since the end of 2019, BigHit has been working on saying goodbye to social networks, retailers and internationally from the big music labels. In the Weverse app, the stars can post content themselves, interact with the fans or sell premium videos. BigHit is attacking the VLive app, which offers exactly these functions and which a large number of K-Pop stars use to keep in touch with their fans.

Only when it comes to short-term live streams, VLive is a little ahead of the curve. BTS often switch to YouTube. The shop integrated directly into the Weverse app is also very lucrative. Fans can not only buy premium videos, but also merch products and concert tickets for digital or real events.

In the future, when the postponed BTS stadium tour can take place, it should also be possible not to queue for concert merchandise, but to buy it in advance using the app and then simply pick it up on site. Anyone who has ever been to a BTS concert knows what a relief it is for the fans. BigHit also saves its own pop-up stores, which would otherwise be set up in central locations in the tour city.

In addition, the fan light sticks (many K-pop bands have specially designed light scepter that are swung brightly at concerts) can be synchronized via WeVerse so that they shine in color at the right moment. This has already been tested for BTS on two occasions. So far, three virtual pay concerts have taken place on Weverse – with huge success. “BangBangCon The Live” in June had 756,000 users from 107 countries. 746,000 merchandise items were sold. “BTS ON: E” is said to have had more than a million viewers over two days.

Areas of the Weverse app: the BTS home screen, the app's home screen, a magazine article explaining why it's time for a Grammy nomination.

Areas of the Weverse app: the BTS home screen, the app’s home screen, a magazine article explaining why it’s time for a Grammy nomination.

Screenshots Weverse

As of August 2020, the Weverse app had 10 million downloads worldwide. The long-term goal of the app is to attract the stars of other companies to the platform – and that is already starting to work out. But BigHit has already taken a big step with Weverse: to take over all areas of the business itself and to determine the relationship with the customers itself. This recently also includes the Weverse “Magazine”, which is also intended to replace journalistic reporting.

Bang Sihyuk told Fast Company in 2019 that he doesn’t read many books by business executives and CEOs, but that he recently saw something from Jeff Bezos that he liked: Bezos says he is obsessed with the well-being of his customers. And BigHit doesn’t do anything else: It always focuses on content and fans. The fact that one always finds new ways to use their solvency remains unsaid.

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