HYBE Labels is betting their life on the success on NewJeans, trying to reduce dependency on BTS
ADOR, a subsidiary of HYBE Labels, recently launched the new Kpop girl group New Jeans, even creating a new mobile application in partnership with Weverse Company. It seems that HYBE is betting on the success of NewJeans, even investing a total of 16 billion won on ADOR. Even Weverse Company, another subsidiary, contributed to the development of a separate app called “Phoning” for NewJeans.
It is unusual for Weverse Company to create a separate mobile app for one single group. With this in mind, “Phoning” is a joint product between Weverse Company and ADOR, which is developed with the concept that NewJeans and their fans share one phone. However, while the group will not be joining the community app Weverse, their official albums and merchandise will still be distributed via Weverse Shop. Weverse Company also stated that there will be no other app development for artists other than NewJeans.
The NewJeans-only app “Phoning” provides real-time live broadcasting, chatting functions, photo albums, calendars, and more. By following the concept of a mobile phone, “Phoning” aims to create the feeling of direct communication between fans and artists. For example, real-time lives will be provided in the form of a video call, and artists can also share various photos and videos via the chat function, as well as communicate with fans.
Weverse Company is currently operating Weverse, a global fandom platform, and Weverse Shop, a commerce platform. In Weverse, artists from YG Entertainment, HYBE Labels (including BTS), and other entertainment agencies are included. Even foregin celebrities, such as Gracie Abrams and Jeremy Zucker, communicate with their fans through the app, making NewJeans the odd-one-out with an app of their own.
Speaking about this, a HYBE official said: “Phoning is the result of a collaboration between Weverse and ADOR, which has long considered different means to provide new values to fans.” He also shared that Weverse has been seeking to develop new services that can match individual artists’ colors and concepts.
As announced, NewJeans will communicate with fans through the Phoning app, but plans to sell concert tickets and official merchandise through Weverse Shop. As of the moment, the group’s global official product store has already been opened in Weverse Shop, and it is taking pre-orders for NewJeans’ first album, which will be released in August. It also seems that new functions will be added to the Weverse platform based on analysis of Phoning’s performance.
However, when asked about whether there will be separate platforms for future artists, Weverse Company responded negative. “We are not considering additional development of applications for individual artists”, the company representative said.
◇ HYBE supports 16.1 billion won after founding ADOR
The development of this separate app alone shows how much HYBE has invested in the new girl group. HYBE has been focusing on diversifying business activities as well as expanding the artist lineup to reduce dependence on BTS because the group’s revenue accounts for a high proportion. In the first half of this year, Source Music’s LE SSERAFIM was the first girl group under HYBE to debut, and ADOR’s NewJeans was the second.
ADOR was created when HYBE took over 100% of the shares after it was spun off from Source Music last year. HYBE is the largest shareholder with an 80% stake in Source Music. HYBE owns labels such as Big Hit Music, Pledis Entertainment, KOG Entertainment, HYBE America Japan, and Ithaca Holdings, as well as Source Music and ADOR.
Currently, ADOR is led by CEO Min Hee-jin. After joining SM Entertainment in 2002, CEO Min was in charge of concept planning and visual directing for Girls’ Generation, SHINee, F(x), EXO, and Red Velvet. In 2019, she moved to HYBE and become a Brand General Manager (CBO) and was appointed as the CEO of ADOR in November 2021. NewJeans is also the result of CEO Min’s combined capabilities.
HYBE provides full support for ADOR. ADOR had only 100 million won in capital at the time of incorporation, but the capital increased to 10.1 billion won last year. An additional bequest was carried out this month as well, raising the capital to 16.1 billion won. Since the group has not yet officially debuted, the sales are still 0 won and only expenses are counted in accounting. After the debut in August, sales are generated.
HYBE is focusing on debuting a new group even as costs increase this year. In this case, HYBE has high expectations for the growth of NewJeans in the future as the team targets the global market. All five members are fluent in English and there are members with Vietnamese and Australian citizenship. It is produced with an expanded membership taking into account global intellectual property (IP) rights.
Chief Financial Officer (CFO) Lee Kyung-joon said in a conference call in the first quarter, “Three groups, including LE SSERAFIM, will debut under HYBE this year,” adding, “This year’s annual profit margin may be limited compared to last year.” “I think this initial cost is an investment cost for HYBE, which will expand next year and beyond,” he said. “The rookie group will quickly gain fandom and influence.”
Source: thebell
