HYBE CEO Highlights Key Difference Between the US and Korean Music Industry

HYBE has been one of my favourite music companies for a minute, so you can tell I read/listen to every detail about the company with precision. In the past months, HYBE has been expanding beyond the realm of K-Pop and seeking meaningful partnerships to broaden its global reach. This is because they’re looking to reduce their reliance on BTS, their frontline artists and I’ve been keeping tabs on how they execute this.

Owing to this, HYBE acquired Ithaca Holdings owned by the renowned Scooter Braun for about $1 billion. This acquisition brought on board Braun’s roster consisting of Justin Bieber, Demi Lovato, and the prominent country label Big Machine. This move led to the creation of HYBE-America, now helmed by Braun himself.  From the acquisition of Hip-Hop label Quality Control to exciting collaborations like Seven with BTS' Jung Kook and Latto, Braun has been facilitating deals and collaborations to propel HYBE’s global strategy.

The Jung Kook and Latto record skyrocketed HYBE's share price by 3.12% upon release and has become one of the most streamed tracks on Spotify this year. HYBE is sure pulling out all the stops to compete with major labels, aiming to be the fourth major player in the music industry. To fuel these ambitions, they've raised about $380 million ready for an acquisition spree. 

Here, I dived into some of my biases on why I think HYBE could be a fantastic partner for Mavin as Billboard reports they might have an eye on Mavin, alongside other companies like Universal Music Group.

I’m particularly team HYBE because they’re one of the few music companies always experimenting with new technologies and integrating them into their strategies. It makes sense as I’m also at the intersection of music/entertainment and tech. There’s also something about HYBE's founder, Bang Si-hyuk often referring to the company as a "half-tech company”.

Just look at their foray into the AI boom earlier this year. They released their own AI-generated track, sung in six different languages, and it was produced by Supertone, an AI vocal-generating company that HYBE acquired last year. And let's not forget about WeVerse, a platform I've briefly mentioned before—another exciting addition to their tech-driven endeavors.

All in all, I'm thrilled to see how events unfold for HYBE, but first, let’s hear what Bang Si-hyuk has for us from his session at the Bloomberg Screentime event in Los Angeles:

HYBE's Quest to Build a Global Music Giant

HYBE's collaboration with Universal Music/Geffen for the global girl group project is an important experiment to assess the exportability of the K-pop methodology and expand HYBE's influence beyond the realm of K-pop.

The company is determined to increase its market share by targeting the US, the largest music market, and expanding globally. As part of this expansion, HYBE aims to create a girl group with members from diverse backgrounds that can resonate with a broader international audience, while attracting new fans who may not have consumed K-pop extensively before but are receptive to the music.

The acquisition of Ithaca Holdings, which includes Scooter Braun's management clients and the Big Machine label, has also bolstered HYBE's presence in the US market. Recognizing the slower growth in East Asian markets, HYBE places great importance on its expansion within the US. Bang also mentions that regardless of the outcome of the Dream Academy(global girl group project) test, HYBE will continue to engage in similar experiments over the next few years with various budgets and skills.

Bang’s Retirement is Key to HYBE’s Overall Strategy

This really hits home!! as it's where I’m currently at with editorial work at The Jollof Diary. I fear for times when I’m not able to sacrifice my nights or weekends to pump the content bank. I’ve been thinking about this a lot lately but let’s hear Bang’s angle.

Among Bang's plans to build a self-sustaining company, US and global expansion comprise just one aspect. Another critical prong of this strategy is HYBE's goal to ensure that its success does not hinge on any one individual, whether an artist or an executive. Bang highlights the importance of maintaining a sustainable company, even if a particular intellectual property or project may not achieve the desired success. Many entertainment companies heavily rely on a single IP, whereas Bang envisions HYBE as a company that can sustain itself independently of any one manager or creator.

Despite acknowledging the significance of BTS to the company, Bang expresses concern about putting too much reliance on one entity, including himself. He envisions retiring in the next 10 years, not due to a lack of passion for the work, but to ensure that HYBE can operate and thrive without depending on a single person for sustainability. Bang clarifies that he is not announcing his retirement but emphasizes that the ideal scenario is for the company to sustain itself without relying solely on any one individual.

Differences Between the US and Korean Markets

When asked about his experience working with Scooter Braun and HYBE America, Bang highlighted some differences between the music business in the US and Korea; which all comes down to the industry’s structure.

According to him, in the US, the artist takes center stage, whereby they’re key decision-makers and call the shots. Any profits or revenues generated from these decisions find their way back to the label, management, and other service providers in the form of royalties. 

But things have a different flavour in Korea. Artists are, instead, a partner in making business decisions alongside the company. There is an understanding that the artist and company are working together to develop the market. In the Korean music business, when decisions are made, they’re not based solely on the will of the artist, but as a business decision in an actual sense. But in the US, it's not always business considerations that drive decisions.

Now this begs the question if HYBE would succeed in replicating this K-Pop methodology in the US music business. Or would the US music business be open and accepting of this methodology?