The Korea Herald


Hybe: Breaking down K-pop giant’s aggressive expansion

Label’s acquisition of Ithaca Holdings latest in a series of efforts to become a global cultural juggernaut

By Yim Hyun-su

Published : April 4, 2021 - 15:53

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BTS became the first South Korean act to deliver a solo performance at this year‘s this year‘s Grammys Music Awards. (Big Hit) BTS became the first South Korean act to deliver a solo performance at this year‘s this year‘s Grammys Music Awards. (Big Hit)
Hybe, formerly known as Big Hit Entertainment and home to South Korean pop group BTS, made headlines over the weekend following the announcement that it has bought Ithaca Holdings, a US music firm behind the likes of Justin Bieber and Ariana Grande.

The $1 billion deal has been described as “inevitable” by Hybe Chairman and CEO Bang Si-hyuk who said the two firms will work closely together to “transcend borders” and “break down cultural barriers.” Scooter Braun will join the board of Hybe after selling his company.

Hybe will acquire a 100 percent stake in Ithaca Holdings worth 1.07 trillion won ($947.5 million) via Big Hit America through a rights issue. Bieber and Grande will also be shareholders, both owning 53,557 stocks each, according to its financial report.

BTS owns a combined 478,695 shares of Hybe, divided among the seven members, according to the company’s securities report last year.

With the acquisition, Hybe now boasts some of the biggest names in the music industry, including BTS, Justin Bieber, Ariana Grande, J Balvin, Demi Lovato as well as K-pop groups TXT and Seventeen.

With potential business risks such as BTS’ enlistment on the horizon, Hybe is trying to avoid putting all their eggs into one basket, said Lee Gyu-tag, a professor of cultural studies at George Mason University Korea.

“Big Hit’s international success has so far been thanks in most part to BTS’ unprecedented stardom alone but as the members enlist in the military, the gap between new album releases will likely become longer in the future,“ he said.

”Other artists at the company such as Enhypen, Seventeen and GFriend will benefit from the new promotion and distribution channels and it will be an opportunity to make their name known in the US and international market.”

While the scale of the latest move came as a surprise to many, Hybe has been growing in size through acquisitions and restructuring as well as focusing on intellectual property in recent years.

In 2019, the company -- Big Hit Entertainment at that time -- posted 587.9 billion won in revenue, nearly doubling from the previous year thanks to revenues from tours, intellectual property and online platforms.

Last year, its annual revenue rose by 35 percent to 796.3 billion won despite the coronavirus pandemic that hurt tour revenues, as merchandise, content and fan club-related sales jumped by 53 percent, 71 percent and 66 percent, respectively.

Though BTS was a major commercial success for the company in the several years prior -- selling over 5 million copies of albums in 2018 alone -- Hybe’s business portfolio has become more diverse as of late, ranging from BTS-inspired characters TinyTAN to mobile game BTS World.

Its fan community platform Weverse has been joined by not only in-house artists BTS and TXT, but also artists from other labels such as CL, Henry Lau and New Hope Club.

Hybe teamed up with mobile game company and one of its major shareholders Netmarble for BTS World. Earlier this year, it also secured funding worth 410 billion won from Naver for its subsidiary Weverse Company, the operator of Weverse.

In a report last month, brokerage firm Samsung Securities noted that Hybe, then Big Hit Entertainment, was fast pivoting to the “metaverse” -- a collective virtual space in which users can interact with each other using technology such as augmented and virtual reality -- citing examples including the Fortnite Party Royale music video for BTS’ “Dynamite” and its investment in Naver Z, a company behind a 3D avatar app Zepeto.

“A strong line-up of artists, coupled with Weverse’s influence as a platform is growing, will see the company continue to expand its presence in the industry and increase profit,” the report said.

By Yim Hyun-su (