The Covid-19 had a heavy impact on the Korean music industry. But Korean entertainment companies have many ways to overcome difficulties.
Kpop has grown into a billion-dollar industry and Korean artists have become global famous names, being supported by fans from all over the world.
Entertainment companies are overcoming the difficulties caused by the Covid-19 pandemic, and are even expanding their businesses. They expand their paid platforms, hold online concerts, collaborate with larger partners in other countries and industries, and even cooperate with competitors.
PROMOTING KPOP TO BECOME A GLOBAL CULTURAL PHENOMENON
Big Hit Entertainment – the management company of global group BTS – has acquired a series of smaller entertainment companies over the past two years to expand the business. The company was listed on the main Korean stock exchange KOSPI in October 2020.
Three months later, Big Hit signed a series of deals with “giant” corporations in the music industry, such as Naver – the operator of Korea’s largest portal – and Universal Music Group (UMG). The company has also strengthened its relationship with YG Entertainment, another leading Kpop entertainment company, also known as the management company of the famous girl group BlackPink.
In late January, Big Hit’s sub-label beNX acquired the popular streaming platform developed by Naver. Meanwhile, Naver guarantees a 49% stake in Big Hit’s sub-label and the agreement to provide access to a giant platform with 35 million monthly active users.
On the sidelines of the agreement, Big Hit also increased the strategic partnership with YG Entertainment. The two companies jointly strengthen their industry networks, intellectual property (IP) as well as business activities.
Big Hit, YG, and UMG have signed a multilateral agreement to develop KBYK Live – a joint venture founded by Big Hit and Kiswe – an American streaming service provider.
A few days later, Big Hit and UMG announced a strategic partnership to debut a new boy group in the US. In contrast, many 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 Bang Si-hyuk, the chairman & CEO of Big Hit Entertainment, “In this sense, I strongly believe that UMG and Big Hit will create a synergy that will rewrite the global music history.”
The President of UMG, Sir Lucian Grainge also expressed his expectation of this partnership. He said: “We’re 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.”
DEVELOPMENT STRATEGY IN THE PERIOD OF THE COVID-19 PANDEMIC
Analysts and experts say the factor that makes the aforementioned deals successful is the growing influence of Big Hit in the fan community. BTS, from a relatively obscure group, has grown into a global phenomenon.
“In order to attract BTS, Naver made concessions and bought stakes in Weverse’s operating company,” explained Ji In Hae, an analyst at Hanhwa Investment Securities to The Korea Times.
Weverse has grown strongly after a short time with the participation of 16 Korean and foreign artists, including big names like BTS, CL, Seventeen, and Gracie Abrams … This is an app specializing in selling tickets exclusively for online programs, many products and goods of the above-mentioned artists.
In addition to letting artists and fans communicate, Weverse sells a variety of premium content. As a result, this platform makes investors excited about the commercial potential.
In addition to Big Hit, K-pop “giants” like SM Entertainment, JYP Entertainment, and YG are also paving the way to build their own platforms or collaborate to gain a larger stake in the music industry.
At the time of the Covid-19 outbreak, when concerts were canceled or postponed due to social distancing, SM collaborated with Naver to launch the virtual concert, “Beyond Live”.
In August 2020, SM and JYP announced their cooperation to launch Beyond Live Corp. (BLC), a company that specializes in organizing virtual concerts. A month ago, the girl group TWICE successfully held an online concert and attracted more than 100,000 viewers.
These companies also created their own apps for doing business. SM Entertainment operates a fan community on mobile called Lysn. Here, fans can stay in touch with their favorite artists.
Similarly, JYP released its own app called “bubble for JYPnation”, allowing subscribers to pay about 3.49-40.99 USD to participate in personal conversations with artists under this agency.