HYBE founder and chairman Bang Si-hyuk stated his firm is just getting began in its bid to develop into a world music powerhouse that may rival the three main labels.
The South Korean firm’s two U.S. acquisitions — Scooter Braun’s Ithaca Holdings and QC Media Holdings, father or mother firm of hip-hop label High quality Management Music — are “only the start,” Bang stated Wednesday at Gwanhun Discussion board in Seoul. The chief behind supergroup BTS insisted HYBE should have a “sense of urgency” and look exterior of Korea to proceed to develop.
“We live in an period the place the whole lot we do within the content material business resonates past geographical boundaries,” Bang stated. “On the similar time, Ok-pop has change into a world business that may solely proceed to develop by focusing on each home and worldwide markets.”
At house, Bang stated HYBE and its Korean rivals can’t do it alone. In his speech, he referred to as on the South Korean authorities to assist the Ok-pop corporations of their bid to tackle the worldwide majors – Common Music Group, Sony Music Leisure and Warner Music Group — by serving to them change into nationwide champions in the way in which that electronics corporations Samsung and LG have change into world powerhouses with authorities assist.
Whereas Ok-pop constructed HYBE right into a powerhouse, the corporate might need solely a short window to capitalize on its world success. “Ok-pop is in disaster,” the HYBE chief stated, asserting that by most measures the style is in decline in Southeast Asia, aside from progress in China and spending per shopper. In the USA, 53% fewer Ok-pop tracks charted on the Billboard Hot 100 in 2022 than the earlier 12 months, in keeping with Bang. He attributed the Ok-pop slowdown to BTS’ hiatus as a bunch in 2022 and stated he doesn’t consider the group’s eventual comeback will convey again the misplaced income.
When Bang talks about exporting Ok-pop world wide, he isn’t referring to only a style of music. To him, Ok-pop is “a tradition that encompasses music-oriented programs comparable to music and content material manufacturing, distribution, advertising, communication with followers, and different programs of music.” In HYBE’s “multi-label” construction, he added, the Korean headquarters offers steerage to its labels and disperses the danger so its subsidiaries can function “in a wholesome competitors that drives one another to enhance.”
For HYBE to make inroads in the USA, the world’s largest music market, it wants “a powerful community and infrastructure … to attenuate the price of trial and error” concerned in exploring an unfamiliar panorama, Bang added. Within the U.S., Braun leads HYBE America, the umbrella group for SB Tasks’ administration shoppers, Massive Machine Music Group and High quality Management. HYBE additionally has a three way partnership within the U.S. with Common’s Geffen Information to develop a woman pop group for the home market.
Whereas Bang didn’t say which corporations HYBE is focusing on for additional acquisitions, in a press convention after his speech he famous HYBE’s curiosity in Latin labels. The corporate actually has the assets to purchase further file labels, artist administration companies or tech platforms to additional gasoline its enlargement: HYBE had money and money equivalents of 903 billion received ($689 million) as of Sept. 30, 2022, the most recent date for which knowledge is on the market. The purpose, stated Bang, is to attain scale “that may’t be ignored.”
Regardless that HYBE dominates Ok-pop and generated income of $1.4 billion in 2022, Bang described his firm in biblical phrases: He’s David, the three main labels are Goliath. Main Ok-pop corporations account for lower than 2% of the worldwide music market, he stated, whereas the majors personal 67.4%.
Wanting world wide, Bang sees “alarming developments,” together with Ok-pop commanding fewer chart positions in 2022 than within the earlier 12 months. “On this context, the existence of worldwide Ok-pop artists and not using a dominant world leisure firm inevitably results in issues concerning the business’s capacity to be looking out for future uncertainties,” he stated.
What’s going to it take for HYBE to show from David right into a sustainable Goliath? Bang needs extra scale and stronger distribution companions to present Ok-pop further bargaining energy to barter extra favorable distribution charges. In that means, he stated, HYBE can enhance its monetary efficiency “and allow the corporate and our artists to develop.”
Additional coming into the U.S. market would require constructing “a powerful community and infrastructure,” Bang stated. “By this, we have to reduce the price of trial and error attributable to conditions which might be troublesome for us to vary, or on account of our unfamiliarity with the native circumstances, and safe an equal degree of presence and affect within the mainstream market equal to native corporations.”
Breaking artists isn’t a matter of “luck or sheer instinct,” the HYBE founder added. Reasonably, success is the results of a administration course of that may be systemized and replicated in different markets. HYBE’s multi-label construction demonstrates this method, Bang stated: “It’s a system that has been meticulously established primarily based on expertise, trial and error, and contemplation to allow the corporate’s success.”
Further reporting by Jeyup S. Kwaak