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BTS Hiatus: Hybe Entertainment Says It Has Been Preparing for Years

  2024-03-01 varietyPatrick Frater28520
Introduction

Hybe Entertainment, the management company behind K-Pop sensation BTS, says it has prepared for the band’s military serv

BTS Hiatus: Hybe Entertainment Says It Has Been Preparing for Years

Hybe Entertainment, the management company behind K-Pop sensation BTS, says it has prepared for the band’s military service hiatus and that it is no longer a one-act operation.

It promises: a multi-label strategy; a wider artist roster that will be boosted by four new ‘teams; further international expansion; and accelerated use of technology, following in-house developments and acquisitions.

Hybe and label Bighit Music said Monday that the BTS band members “are moving forward with plans to fulfil their [compulsory] military service” with the oldest Jin likely to enter the army first after launching his solo single this month. Explaining that the band members are proud to serve, it added, “both the company and the members of BTS are looking forward to reconvening as a group again around 2025, following their service commitment.”

Shortly after the Monday bombshell, Hybe issued a letter to its shareholders, attempting to reassure investors that Hybe is bigger than BTS. “Hybe is confident in the structure that’s been put in place over the past 10 years,” it said in the letter.

Whether financial markets accept that kind of statement was not immediately clear. The company’s shares were down a modest 2.5% and closed the Monday trading session at KRW115,000 apiece.

That’s a big contrast to the situation in June this year, when a supposed Korean to English mistranslation of the word “hiatus” caused the shares to crash by a third – from KRW227,500 to KRW145,000 – and for the company to watch more than $1 billion erased from its market capitalization.

Since then, the shares rallied to a subsequent high of KRW188,000, but have slipped back to their present levels. At these levels, and with the weakness of the Korean Won against the U.S. dollar worsening comparisons, the company is now valued at KRW4.76 trillion or $3.31 billion.

It trades at a 20-times multiple of historic profits. That is a much more sober investment assessment of the company than when it launched on the Korean stock exchange in September 2020. Initial months saw the stock price driven by a mixture of institutional FOMO and fan frenzy. Prices reached an implausible KRW421,500 in November 2021 and have come down by an uncomfortable 72% since then.

Currently, there are nine independent labels under Hybe and the artist roster now includes Seventeen, Tomorrow x Together, Enhypen, Le Sserafim, New Jeans Zico, Fromis_9, Ariana Grande and Justin Bieber.

“By giving autonomy to each label, we ensure that a wide variety of music and content are created [and] even healthy competition,” said Park Jiwon, Hybe CEO in the letter. He shared graphics showing that artist revenues – excluding BTS – had grown almost three-fold between 2020 and 2022.

Even with a post-COVID return to in-person concerts and touring, technology is expected to play a large part in Hybe’s ongoing growth. The merger of the Weverse fan platform with Naver V Live in July proved its mettle with 49 million views of the BTS concert this weekend in Busan.

The company plans to launch subscription services and bring U.S. and Japanese acts into Weverse over the next 15 months. There will be more gaming, following the launch of “In The Seom with BTS,” and more details of this development axis from next month.

The recent acquisition of Supertone heralds new forms of content-creation including AI-based speaking and singing vocal synthesis. If Asian fans of Karaoke and ‘social music’ are a pointer, that could be a lucrative vector in future.

And while, Park did not mention Scooter Braun’s Ithaca Holdings by name, the $1 billion 2021 acquisition has already helped make Hybe a more international, as well as a more technologically advanced business than its three traditional K-pop agency counterparts.

(By/Patrick Frater)
 
 
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