Big Hit Entertainment Co., the label behind K-pop sensation BTS, and portal giant Naver Corp. are set to team up with Universal Music Group, the world’s largest record label, to thrive in the fast-growing fan community market.
The two Korean entertainment behemoths are in talks with Universal Music to launch a joint venture aimed at managing globally famous artists, including K-pop musicians, according to industry sources on Feb. 4.
The three parties are currently negotiating the investment size and the stake each will take in the JV, the sources said.
Universal Music, majority-owned by the French media conglomerate Vivendi, with Chinese tech company Tencent owning a minority stake, is home to acts including Maroon 5, Taylor Swift, Mariah Carey and Jay Z.
The Korean side will be represented by BeNX, a Big Hit subsidiary that manages the K-pop online fan community platform Weverse.
Last month, Naver invested 411.9 billion won ($368.2 million) to acquire a 49% stake in BeNX in a bid to expand its presence in the K-pop fan community platform market, which has shown consistent growth.
The operator of Korea’s top Internet portal is seeking to combine its own online fan community platform V Live Fanship with Big Hit’s Weverse to exert greater influence in the growing market.
If talks with the American record label go smoothly, BeNX will be able to expose BTS, Korean-Japanese girl group IZ*ONE and other K-pop stars on its label to a wider global audience via a joint fan community platform.
Universal Music, in return, will be able to feature its own artists on the K-pop platform, which is gaining global popularity.
Naver's fan community platform V Live UNIVERSAL MUSIC TO BENEFIT FROM GROWING K-POP PLATFORM
Universal Music-managed acts including Gracie Abrams, Youngblood and New Hope Club have already signed contracts to join Big Hit’s platform Weverse. A growing number of global artists will follow suit once the anticipated joint venture is launched, according to the sources.
The online fan community platform market has seen explosive growth in the wake of the COVID-19 pandemic, rendering it nearly impossible for fans to engage in offline activities.
As of May 2020, Naver’s V Live Fanship saw its paid monthly content grow fivefold compared to the first couple of months of the year -- before the coronavirus outbreak -- while the value of content transactions increased by 25 times in the same period.
Between July 2019 and June 2020, V Live users in Europe and Africa grew threefold from 2016. Big Hit’s Weverse also saw a hike in revenue, as it pulled in around 1 million viewers from 191 countries with estimated ticket sales reaching 49.1 billion won for the online BTS concert Map of the Soul ON:E last year.
Over the past few years, Naver has actively established partnerships with major entertainment labels in Korea, including SM Entertainment and YG Entertainment, the labels behind Red Velvet, NCT, EXO and Big Bang, among others.
Analysts said Universal Music will also to benefit from the growing popularity of K-pop platforms if a deal is reached.
Big Hit officials declined to confirm the negotiations with Universal Music.
Write to Min-ki Koo at kook@hankyung.com In-Soo Nam edited this article.
