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K-pop giant HYBE aims to raise $380m for US M&A

HYBE, the South Korean music agency behind BTS and Ariana Grande, is reportedly looking to raise around 500 billion Korean won (approx USD $380m) to fund acquisitions in the US.

The Seoul-based K-pop giant “is in talks with investors to secure equity financing,” according to a report from Bloomberg, “and is open to having both strategic and financial partners”.

It comes after HYBE chairman Bang Si-Hyuk spoke about his company’s ambitions to expand its global presence via M&A and diversify its sphere of influence beyond K-Pop in the global music business.

In a March interview with CNN about the company’s US M&A strategy, Si-Hyuk notes that “globally, [K-pop] is not occupying much of the market”.

He added: “On the other hand, Latin music and afrobeats is very rapidly growing. So being where we are, it is more urgent to increase the exposure. For that purpose, I’m taking over labels and management companies in America to be able to build the infrastructure.”

“Globally, [K-pop] is not occupying much of the market… [so] it is more urgent to increase the exposure”

HYBE’s $1 billion-plus acquisition of Scooter Braun’s US-based Ithaca Holdings was a big step in bringing numerous non-K-pop operations into the fold, via HYBE America.

The deal saw HYBE take ownership of country music giant, Big Machine Label Group, as well as Braun’s own management company, SB Projects (home to Justin Bieber and Ariana Grande).

In February, HYBE expanded further in the US entertainment business when HYBE America, led by Braun, acquired Atlanta rap powerhouse QC Media Holdings or Quality Control, home to acts such as Lil Baby, Migos, Lil Yachty and City Girls, in a deal worth $300 million in total.

That acquisition came around the same time a bidding war broke out between HYBE and South Korea’s Kakao Entertainment for rival K-pop company, SM Entertainment.

In February HYBE acquired a 14.8% stake in SM Entertainment, for around $335m via the acquisition of shares from Lee Soo-man, SM Entertainment’s estranged founder.

HYBE planned to acquire a 40% stake in SM Entertainment but officially ended its takeover bid on 12 March. Kakao Corp. is now the largest shareholder in SM Entertainment though Bloomberg reports that HYBE still owns around an 8.95% stake in SM.

 


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BTS gross $53m from latest cinema release

K-pop stars BTS are continuing their record-breaking reign at the box office, grossing more than $53 million with their latest cinema release.

BTS: Yet To Come in Cinemas was screened in more than 5,817 cinemas across 128 countries, with Japan, USA and Mexico among the top-performing territories.

Across the opening weekend, the concert film scored multiple top five positions in territories including Japan, Korea, Italy, and Spain, plus the top ten in UK, Germany, Peru, and Australia. The project also reached number one in Mexico, Colombia, and the Philippines, plus the number one international release in India.

The film documented the group’s BTS Yet to Come in Busan concert, which took place at Busan Asiad Main Stadium on 15 October to promote the city’s World 2030 Expo bid.

The free show was attended by a 50,000-strong crowd, with 10,000 and 2,000 people tuning in via real-life “Live Play” broadcasts.

The concert was re-edited and remixed for the big screen and featured “new close-up angles and a whole new view of the entire concert”. In addition to a regular cinema format, BTS: Yet to Come in Cinemas was also screened in multiple special formats, such as ScreenX, 4DX and 4DX Screen.

“This figure is a testament to the strong relationships and collaborative efforts between CJ, HYBE, and Trafalgar”

“We are deeply gratified by the fact that one-fourth of our worldwide box office sales can be attributed to the special formats with ScreenX and 4DX, that we offered for the BTS concerts,” says Jong Ryul Kim, CEO of CJ 4DPLEX.

“This figure is a testament to the strong relationships and collaborative efforts between CJ, HYBE, and Trafalgar. We take great pride in this achievement and extend our sincere gratitude to viewers worldwide for their unwavering support.”

Marc Allenby, CEO of Trafalgar Releasing – which presented the film alongside CJ 4DPlex – adds: “We are delighted to see BTS: Yet To Come In Cinemas exceed an incredible $50m milestone at the box office. This figure is testament to the group, the ongoing dedication of the audiences and a credit to the international partnerships that made this landmark cinema event possible.”

The event was HYBE and Trafalgar Releasing’s fifth global title with the pop icons, after Burn the Stage: The Movie (2018), Bring the Soul: The Movie (2019), Break the Silence: The Movie (2020) and BTS Permission to Dance on Stage Seoul: Live Viewing (2022).

BTS’ one-off Busan concert marked their final performance together for some time, due to their members’ mandatory military service.

 


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HYBE calls off SM Entertainment takeover bid

K-pop behemoth HYBE has abandoned its controversial move to take over rival SM Entertainment.

HYBE, which is home to acts including BTS, Tomorrow X Together, NewJeans, LE SSERAFIM and Seventeen, says it has taken the decision due to the market “overheating”, amid competition with South Korean internet giant Kakao.

“HYBE assessed that the market situation had overheated due to competition with Kakao and Kakao Entertainment, which could negatively impact HYBE’s shareholders’ rights,” it says in a statement. “The two companies ― HYBE and Kakao ― also reached an agreement to seek cooperation on platform businesses.”

The Korea Times reports that Kakao will now work toward a controlling stake in SM and its management rights, while continuing to seek cooperation with HYBE on its platform business. Kakao offered SM shareholders 150,000 KRW (€108) per share, compared to HYBE’s previous offer of 120,000 KRW (€86) per share.

“Kakao and Kakao Entertainment respect HYBE’s decision to stop the move to acquire SM Entertainment”

“Kakao and Kakao Entertainment respect HYBE’s decision to stop the move to acquire SM Entertainment,” says a Kakao statement. “As a partner sharing mutually positive impacts, Kakao and Kakao Entertainment will continue various strategic cooperative relations with HYBE and SM Entertainment to help stoke the global status of K-pop and K-culture.”

Seoul-based SM Entertainment says that it “welcomes” HYBE’s decision to suspend its takeover bid. Last month, HYBE purchased a 14.8% stake in SM, in a move led by HYBE’s global team that involved acquiring former chief producer Lee Soo-Man’s shares in SM – days after the announcement of the SM 3.0 business strategy and development plan.

It pledged to buy another 25% stake in a separate notice, leading SM Entertainment CFO Cheol Hyuk Jang to release a video denouncing HYBE’s “hostile takeover”. Days earlier, SM had sold KRW 217.2 billion ($172.8m) shares – a 9.05% stake – to Kakao Corp.

In February Bloomberg reported that SM had seen its profits soar 70% thanks to the return of concerts and live events, posting an operating profit of 25.2 billion KRW (€18.3 million) in Q4 2022. Sales rose 18.2% to 256.4bn KRO, with its number of concerts in the three-month period up 35 times on the same quarter in the Covid-hit 2021.

 


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BTS to bring Busan concert to cinemas worldwide

K-pop stars BTS will bring their massive October concert in Busan, South Korea, to cinemas worldwide in February next year.

The BTS Yet to Come in Busan concert took place at Busan Asiad Main Stadium on 15 October to promote the city’s World 2030 Expo bid.

The free show was attended by a 50,000-strong crowd, with 10,000 and 2,000 people tuning in via real-life “Live Play” broadcasts.

The concert, which has been re-edited and remixed for the big screen and features “new close-up angles and a whole new view of the entire concert”, will screen in cinemas globally from 1 February for a limited time, across more than 110 countries and territories.

In addition to a regular cinema format, BTS: Yet to Come in Cinemas will also be screened in multiple special formats, such as ScreenX, 4DX and 4DX Screen.

“The group’s engagement with audiences has always been perfectly suited to the cinema”

In a comment, Marc Allenby of Trafalgar Releasing – which is presenting the film alongside HYBE and CJ 4DPlex – said they were looking forward to “collaborating once again” with the companies.

“The group’s engagement with audiences has always been perfectly suited to the cinema, and we are excited to welcome fans from all corners of the globe to this must-see celebration,” says Allenby.

Jong Ryeol Kim, CEO of CJ 4DPLEX, adds: “We are thrilled to announce our second ScreenX collaboration and first 4DX, 4DXScreeen collaboration with BTS. This film is made for both special formats, which fans can experience our movie completely through enlarged screens with 3 different angles and moving motion seats aligning to BTS’s music.”

BTS Yet to Come marks the fifth film the group has released in recent years. Burn the Stage: The Movie arrived in 2018, with Love Yourself in Seoul and Bring the Soul: The Movie both released in 2019. Break the Silence: The Movie followed in 2020.

BTS’ one-off Busan concert marked their final performance together for some time, due to their members’ mandatory military service.

 


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The O2’s Steve Sayer on the K-pop boom

The O2’s VP and general manager Steve Sayer has spoken to IQ about the global K-pop boom after the London venue was lit up pink in honour of Blackpink’s two headline shows.

The 21,000-cap venue’s iconic white tent, and entrance sign were transformed to bright pink for the South Korean girl group’s AEG-promoted concerts on 30 November and 1 December.

The O2 was an early adopter of the K-pop craze, having welcomed BTS in October 2019, who smashed a merchandise sales record previously held by the Rolling Stones. The seven-piece band went on to make history the following year by playing to 120,000 people over two nights at Wembley Stadium, promoted by Live Nation.

“We hosted BTS before most people in the UK mainstream even knew who they were,” Sayer tells IQ. “They had this phenomenal fan base, but it was still relatively cult, and when we had those two shows I remember walking into the venue that morning – it was midweek and it wasn’t a school holiday – and there was this huge queue on the square outside The O2.

“We’ve had a lot of smaller K-pop artists and Asian artists play The O2 over the last 10 years, but that event really set the standard. You now have major artists – Blackpink’s a great example – that have the capability of selling out huge venues.”

“It’s a genre that is clearly only going to grow”

Europe’s largest K-pop festival, Kpop.Flex, sold more than 70,000 tickets in 84 countries for its inaugural edition at Deutsche Bank Park in Frankfurt, Germany, in May.

Staged by K-Pop Europa in partnership with PK Events, K.Flex was due to make its UK debut at The O2 last month with acts including Winner, Pentagon and AB6IX, alongside the first-ever Kpop.Flex Awards For Emerging Artists. But the event was cancelled following the Halloween crowd crush in Itaewon, Seoul that killed 158 people. The festival, which returns to Germany from 17-18 June, will now launch in the UK from 22-24 September 2023.

“It was sad that we had to cancel the event recently, but I think everybody understood why,” notes Sayer. “But next year’s K. Flex is going to be brilliant, because there will be big headliners but it will also be an event that breaks some of the up-and-coming K-pop artists.

“In addition to K.Flex, we’ve have a number of other pencils for K-pop artists next year. It’s a genre that is clearly only going to grow and our partners on that event are very much connected with the Korean equivalent of our DCMS, which is actively using it as a way to promote Korean culture globally.”

“To mark Blackpink being the first female K-pop band to headline The O2, it was only right that the whole venue should be turned pink for the first time ever in their honour”

Blackpink recently became the first girl group to gross US$3 million (€2.9m) from a single arena concert in North America, generating $3.297m per night from their two 23,928-cap sellout shows at the Prudential Center in Newark from 14-15 November. The quartet will return to London in 2023 for their UK festival debut at BST Hyde Park on Sunday 2 July.

“We were very excited and proud to start Blackpink’s European arena tour with two historic nights at The O2 – a mere sneak peek into what they have planned for their colossal BST Hyde Park show in July 2023,” adds Simon Jones, SVP of International Touring at AEG Presents. “To mark Blackpink being the first female K-pop band to headline The O2, it was only right that the whole venue should be turned pink for the first time ever in their honour. Iconic!”

Meanwhile, Billboard‘s newly published Year in Touring places BTS as the 27th highest-grossing tour of 2022, generating US$75,489,240 from 458,144 ticket sales for just 11 shows.

BTS’ record label Big Hit Music announced in October that the K-pop superstars were moving forward with plans to fulfil their mandatory military service, ending a long-running debate in Korea over whether they should receive an exemption due to their artistic accomplishments.

 


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BTS’ Busan livestream attracts 49m viewers

A livestream of BTS’ stadium concert held to promote Busan’s World 2030 Expo bid attracted almost 50 million viewers, according to organisers.

Saturday’s (15 October) BTS Yet to Come in Busan show at Busan Asiad Main Stadium in South Korea was attended by a 50,000-strong crowd, with 10,000 and 2,000 people tuning in via real-life “Live Play” broadcasts – where fans can watch the concert in real-time on a big screen – in Busan Port and Haeundae, respectively.

The online livestream through Weverse, meanwhile, is reported to have generated approximately 49m views alone.

“We hope our concert will help promote Busan and support the city’s bid to host World Expo 2030 in Busan,” say BTS.

The free event was originally due to take place on a special stage on the site of a former glass factory near Ilgwang Beach, but was moved due to safety concerns. BTS were confirmed as ambassadors for Busan’s bid to host the 2030 World Expo in Busan Metropolitan City earlier this summer.

“BTS are looking forward to reconvening as a group again around 2025 following their service commitment”

“This will be a great opportunity to contribute to further development of K-Culture as well as its local pop cultures in Busan,” said Bang Si-Hyuk, chair of the group’s management company Hybe, said at the time.

Meanwhile, BTS’ record label Big Hit Music has announced via Weverse and official social platforms that the K-pop superstars are currently moving forward with plans to fulfil their mandatory military service, ending a long-running debate in Korea over whether they should receive an exemption due to their artistic accomplishments.

“Group member Jin will initiate the process as soon as his schedule for his solo release is concluded at the end of October,” says the company. “He will then follow the enlistment procedure of the Korean government. Other members of the group plan to carry out their military service based on their own individual plans.

“Both the company and the members of BTS are looking forward to reconvening as a group again around 2025 following their service commitment.”

 


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BTS switch concert venue due to safety concerns

A BTS concert planned as part of Busan’s World 2030 Expo bid in their native South Korea has switched venues due to safety concerns.

The South China Morning Post reports the free BTS Yet to Come in Busan show on 15 October was set to attract up to 100,000 people to a special stage on the site of a former glass factory near Ilgwang Beach.

However, following complaints the venue was ill-equipped for an event of such scale, the group’s management company Hybe has now announced the show will instead take place at the Busan Asiad Main Stadium.

“In order to prioritise the safety and comfort of attendees and ensure a smooth and transparent concert environment, while still protecting the purpose of this concert, the company has come to the decision to change the concert location,” says a statement.

“This will be a great opportunity to contribute to further development of K-Culture as well as its local pop cultures in Busan”

The new venue is expected to be able to accommodate 100,000 fans, which would make it BTS’ biggest ever one-day concert in South Korea. It will also be livestreamed online and a real-life “Live Play” broadcast – where fans can watch the concert in real-time on a big screen – will take place at the Busan Port International Passenger Terminal.

BTS were confirmed as ambassadors for Busan’s bid to host the 2030 World Expo in Busan Metropolitan City earlier this summer.

“Given the importance of its bid as a nation to host the World Expo 2030 in Busan, BTS and Hybe will do our best to successfully bring the World Expo to Busan,” says Hybe’s chairman Bang Si-Hyuk. “This will be a great opportunity to contribute to further development of K-Culture as well as its local pop cultures in Busan.”

 


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New fund allows investors to back K-pop stars

K-pop fans can now buy shares in the companies behind stars like BTS and Blackpink via a new Exchange Traded Fund (ETF), launched in the US.

The KPOP and Korean Entertainment ETF launched on the NYSE Arca exchange yesterday (1 September) and includes the stocks of 30 corporations, including four music companies that helped K-pop stars achieve global fame.

HYBE (BTS, Tomorrow X Together, Enhypen), SM Entertainment (SuperM, NCT 127, Girls’ Generation), JYP Entertainment (Stray Kids, Twice) and YG Entertainment (BlackPink, Big Bang) are among the index of companies on the ETF.

An ETF — which can be bought and sold on-demand like individual stocks — allows US investors to buy foreign stocks on a domestic stock exchange.

In South Korea, K-pop fans and other retail investors could easily own shares of K-pop companies because they trade on South Korea exchanges but until now it was “almost impossible” for US fans to buy the individual stocks.

“Global fans who love K-pop [can now] participate in the potential growth and development of the K-pop industry”

Jangwon Lee, the CEO of CT Investments and Contents Technologies, the company behind the ETF, says: “K-pop, which has become a global keyword, has become part of mainstream culture for fans in Korea as well as around the world.

“We are launching this ETF to provide an opportunity for global fans who love K-pop to participate in the potential growth and development of the K-pop industry as well as investors access to Korea-listed companies that are driving the future of global content industry forward.”

Lee is also CEO of Seoul-based Beyond Music which is reportedly Asia’s largest single music IP asset management company and has raised $200 million to buy up rights in Asia.

The new ETF comes after HYBE  (formerly Big Hit Entertainment) reported its best-performing quarter yet in Q2 2022.

The South Korea-based entertainment giant has had huge success in the live music sphere, with record-breaking concerts from K-pop superstars BTS.

Most recently, BTS broke the global event cinema record after grossing $32.6 million (€29.8m) with the first live worldwide cinema broadcast of a concert from South Korea.

 


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HYBE reports best-performing quarter yet

HYBE (formerly Big Hit Entertainment) has published its financial results for Q2 of 2022, heralding its best-performing quarter yet.

The South Korea-based entertainment giant reported revenue of KRW 512 billion (USD 391 million) in the second quarter of 2022, up 79.7% from the first quarter of this year. While operating income hit KRW 88bn for the three months prior to 30 June.

The record-breaking revenue came from Hybe artists’ album sales, promotion, and concerts, as well as merchandise and IP licensing.

HYBE’s roster of artists includes K-pop superstars BTS, Seventeen, TXT, Enhypen, Le Sserafim, NewJeans and more.

Performances from BTS and Seventeen were major drivers in pushing HYBE’s concert revenue to KRW 85bn (USD 65m) – up 38.6% quarter on quarter.

In February, BTS brought a four-night residency, called Permission to Dance On Stage, to the 65,000-capacity Allegiant Stadium in Las Vegas.

All four dates were broadcast live at the nearby MGM Grand Garden Arena, in what was dubbed a ‘live play’ event, while the final day of their residency was streamed online worldwide.

Performances from BTS and Seventeen were major drivers in pushing HYBE’s concert revenue to KRW 85bn

Seventeen, meanwhile, helped boost HYBE’s concert revenue with two dates at Seoul’s Gocheok Sky Dome (cap. 25,000) in mid-June. These performances were also livestreamed to global audiences.

However, Hybe’s biggest revenue driver in Q2 was its ‘Artist Direct Involvement’ business, which generated revenues of KRW 326bn (USD 249m), up 153.4% year on year.

HYBE’s second biggest revenue source in Q2 was album sales, driven by releases in the quarter from the likes of BTS and Seventeen.

The company’s album sales grew 97.1% YoY, from KRW 107bn (USD 82m) in Q2 2021 to KRW 211bn (USD 161m) in Q2 2022.

HYBE revenues from merchandising and licensing also soared in Q2, by 97.2% YoY, from KRW 50bn (USD 38m) in Q2 2021, to 99 bn KRW (USD 75m) in Q2 2022.

Revenues from HYBE’s ‘Contents’ business, meanwhile, fell 22.6% YoY to KRW 71bn (USD 54m). HYBE also reveals within its investor filing that Monthly Active Users of its fan-community app WeVerse fell by 6% versus Q1 2022.

The WeVerse app, which collates content made by and for HYBE artists such as music videos, teasers, movies, merch sales and even live streams, has been cited by the company as one of the key drivers behind its success during the pandemic.

In spite of seeing its WeVerse MAUs decline, HYBE’s revenues derived from its ‘Fan club etc’ business line grew 96% YoY to KRW 17bn (USD 13m).

 


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South Korea lifts ban on cheering at concerts

South Korea has eased its coronavirus protocols and lifted its ban on clapping and cheering at gigs.

Fans were handed plastic clappers to emulate crowd noise at BTS’ Permission To Dance On Stage – Seoul three-night residency last month, which marked the K-pop group’s in-person concert return in their homeland.

Just 15,000 people per night were permitted to attend the 70,000-cap Jamsil Olympic Stadium in Seoul on 10, 12-13 March due to social distancing restrictions. But with the number of Covid cases stabilising, most measures have now been dropped, although the indoor and outdoor mask mandate has been retained for the time being.

The news coincides with the release of a report by the Korea Culture and Tourism Institute, which estimated the huge economic impact when BTS perform in South Korea.

“Holding K-pop concerts can have a huge impact on our economy”

“If BTS normally holds a concert in Korea during the post-coronavirus period, the economic ripple effect will reach 677.6 billion won ($550 million) to 1.22 trillion won ($989m) for one performance,” it concluded, according to Allkpop.

The study also referred to the group’s 2021 run at Los Angeles’ 70,000-cap SoFi Stadium, which marked the first time they had been able to be face-to-face with fans since the 2019 BTS World Tour. Internal data showed that more than 70% of the attendees at the LA concerts were from states outside California or overseas.

“This analysis took BTS concerts as an example, but it shows that holding K-pop concerts can have a huge impact on our economy,” it added.

 


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