Army of BTS, Blink of Blackpink and other global fan clubs of the world’s K-pop stars are strengthening the fan engagement platform business of the South Korean entertainment industry, providing an additional future growth engine.
Major entertainment companies have been operating fandom platforms such as Weverse, a unit of the BTS agency HYBE Co. and bubble by DearU Co., a startup backed by South Korea’s music powerhouses SM Entertainment Co. and JYP Entertainment Inc. The country’s leading game developer NCSOFT Corp. also launched Universe, a similar service, as it aims to expand its business portfolio.
Weverse has all the information about BTS, the world’s top boy band, while bubble provides a messaging service that allows users to talk to celebrities such as Twice. Those platforms, which have secured millions of users, are expected to lead future growth in K-pop, analysts said.
The dominant player Weverse had 38 million subscribers as of end-2021, while Universe and bubble had 4.4 million and 1.4 million users, respectively.
The subscribers of those platforms with stronger purchasing power helped more musicians become million-sellers, analysts said. In 2019, BTS was the only musical act in South Korea that sold more than 1 million albums, but the number of artists with sales of more than 1 million albums grew to four in 2020 and six last year.
Those platforms are free from competition as agencies add their artists to their own services and fans do not need to use other platforms.
“A singer is on a certain platform and thus has the character of original content,” said an analyst.
The unlisted unit’s enterprise value was estimated at about half HYBE’s market capitalization of 9.3 trillion won, industry sources said.
Weverse provides everything for fandom activities such as community services, a shopping mall and concert ticket purchases in a single app. Weverse turned to the black in 2020, one year after its launch, even as its services are free. It reported 8.4 billion won in operating profit last year thanks to fees from the shopping mall and concert ticket sales.
The platform is expected to monetize user data based on its 38 million subscribers. That could help it launch the targeted advertising and shopping businesses that local online platform giants Naver Corp. and Kakao Corp. currently dominate.
Hana expected Weverse to earn massive profits if the platform charges just 10% of fees on goods related to its artists.
Analysts predicted HYBE’s stock to surge with their average target price at 388,029 won, 83.3% higher than its closing of 228,000 won on June 3, according to market tracker FnGuide Inc.
CHATTING WITH THE STARS
DearU’s bubble provides a paid global platform for communication between fans and K-pop groups. Artists send messages and pictures to fans and they reply to their idols. Stars of SM Entertainment and JYP such as Twice, Red Velvet and Aespa are on the platform. Twice (Courtesy of JYP Entertainment) DearU turned to the black with an operating profit of 13.2 billion won after launching in 2020. Its operating profit is expected to more than double to 30.6 billion won this year and grow further to 57 billion won in 2023.
The average target price of DearU’s stock stands at 61,750 won, 56.7% higher than its closing of 39,400 won on June 3, according to FnGuide.
NCSOFT’s Universe has a similar messaging service between fans and artists such as Kang Daniel and Oh My Girl that are not under the country’s top four agencies – HYBE, SM Entertainment, JYP Entertainment and YG Entertainment Inc.
Universe has a reward system called Klap for participation in various fandom activities.
Write to Eui-Myung Park at uimyung@hankyung.com Jongwoo Cheon edited this article.
