Table of Contents
This story is part of Fast Company’s Most Innovative Companies of 2022. Explore the full list of companies that are reshaping their businesses, industries, and the broader culture.
America’s hold on global pop culture is over. There’s no greater evidence than the K-pop juggernaut BTS, whose seven members descended on Los Angeles last November for the biggest live music event of the year: a series of sold-out, 50,000-person concerts at SoFi Stadium.
The group is no stranger to superlatives. In the months preceding the concert, BTS surpassed 60 million YouTube subscribers and six of their music videos crossed the 1 billion-view mark. They spent most of the summer atop the Billboard Hot 100 chart with their English-language hits “Butter” and “Permission to Dance,” and jumped back to the top with a Coldplay collab, “My Univedrse,” in October. Their McDonald’s meal, launched last May, helped drive a 26% quarter-over-quarter leap in sales at U.S. restaurants; worldwide sales rose 40%. The group’s legions of global fans, known collectively as ARMY (aka Adorable Representative MC for Youth), number in the tens of millions. Their engagement with BTS is the envy of the music industry.
For nearly two years, that legendary ARMY had had to make due with watching virtual concerts of the group performing to empty spaces. There was, of course, other content for them to consume during the pandemic. BTS made the usual appearances (late-night talk shows, morning television) to promote their chart-topping songs, plus a handful of more unusual ones, including a performance at the United Nations and one at the 2021 Grammys, making BTS the first K-pop group to perform solo at the awards. There was also the steady stream of more casual interactions that forms the bedrock of ARMY’s relationship with the group: near-daily social media posts from BTS members, episodes of the band gamely participating in web variety shows, behind-the-scenes footage of them practicing their famous choreography, livestreams of them eating, cooking, chilling, working in the studio—all beamed out across a multitude of social media platforms.
But the L.A. shows were the first time since the pandemic began that ARMY could see their charismatic band IRL and participate in a concert with the choreographed fan chants that mark BTS’s live performances. So even with the omicron variant starting its winter surge, fans arrived in L.A. from across the country and globe. In the end, BTS sold 214,000 tickets and took in $33 million across just four shows, breaking records. Only five other performers in Billboard Boxscore history have taken in more money from performances at a single venue—and all of them performed at least twice as many shows.
The considerable talent of BTS’s seven members—J-Hope, Jimin, Jin, Jungkook, RM, Suga, and V—is the foundation for the group’s success. The engine, however, is the powerhouse South Korean media conglomerate Hybe, which has consistently found new ways to release content, reach listeners, and cultivate BTS’s fandom at home and abroad. The company was founded as a record label in 2005 by music producer Bang Si-hyuk, known professionally as “Hitman” Bang. Then called Big Hit Entertainment, the label struggled to find its footing in the world of K-pop until, after three years of training, BTS debuted in 2013. As the group’s global popularity surged—in 2017, BTS became the most tweeted-about “celebrity” of the year–so did Big Hit’s ambitions. By the time BTS’s first all-English song, “Dynamite,” debuted atop the Billboard Hot 100 in August 2020 and notched more than 100 million YouTube views within 24 hours, Big Hit’s influence over global culture was undeniable.
But the company, which went public in 2020, aims to do much more than dominate the pop charts. It’s creating a multiverse of platforms and products to keep fans engaged well beyond music. Much of the content that sustained ARMY throughout the pandemic, for example, was disseminated via the social media and content platform Weverse, which the label created in 2019 to allow artists to share social media posts and exclusive content directly with fans. Today, the app has 6.8 million monthly active users and three dozen artists on it—most of whom are not even signed with Hybe.
“The future of the music business is not just about the song or about recording. It’s about the artists in the widest sense,” says Mark Mulligan, managing director and analyst at Midia Research, a U.K.-based company that studies the entertainment industry. “When you look at technologies like Weverse, they are revolutionary. But they’re also simply taking this underlying principle that is digitally agnostic. And that is the idea of nurturing fandom.”
Last March, Big Hit rebranded as Hybe and signaled its intentions to become a “music-based entertainment lifestyle company.” A month later, it acquired Scooter Braun’s Ithaca Holdings—which includes SB Projects and Big Machine Label Group—for $1.05 billion, becoming the parent company of Justin Bieber, Ariana Grande, and Demi Lovato, among other artists. Braun is now co-CEO of Hybe America, alongside Lenzo Yoon. In Seoul, Bang stepped into the role of Hybe chairman and tapped Park Ji-won, former chief operating officer of video-game publisher Nexon, as CEO.
Hybe, which recorded $1.02 billion in revenue in 2021, is now creating the template for a 21st-century entertainment company as it pursues new technologies and content formats. It’s all in an effort, says Park, “to diversify touchpoints between artists and fans and further build this intimacy.” Helping artists create a “sincere link” between themselves and their fans—and allowing the force of that fandom to grow—he says, “might seem simple, but it remains the most fundamental and powerful principle.”
A musical multiverse
When BTS’s RM flew back to Seoul from the States in December, he entered a mandatory 10-day quarantine. Like so many others during the pandemic, he decided to fill the time watching movies. “Guys, now I’m in quarantine… Any recommendations to watch…,” he posted to his fans on Weverse. More than 20,000 people replied, from Japan to Afghanistan, with suggestions of movies, K-dramas, and more. One helpfully advised him to just “look in the mirror.”
Over the next half-hour, a back-and-forth ensued between RM and his fans as he lamented all the time he’d lost to watching YouTube and reading web cartoons instead of watching masterpieces like The Godfather. “Does anyone know how it feels like to be a fool on a remote island, feeling that everyone in the world watched more films than I did?” he asked. He concluded that he should probably just read a book.
As with just about everything surrounding BTS, the group’s presence on social media is outsize. The band has 44.4 million Twitter followers; 60.5 million on Instagram; 47.1 million on TikTok. But the more important metrics are for Hybe’s own platforms. On Weverse, where official ARMY members (starting at $22 a year) get exclusive content, the group has 14.7 million fans. On V Live, a once-rival video-streaming platform that Hybe acquired last year and is now in the process of incorporating into Weverse, the group has 35.2 million followers.
Though it’s a novel concept in North America, Hybe isn’t the only South Korean music label to have its own social platform. Rival SM Entertainment launched its Lysn fan community app in 2018. But Hybe has been particularly systematic in developing these fan engagements. On Weverse, all of the interactions between artists and fans (and among fans) can be translated into nearly a dozen languages. At the same time that it introduced Weverse, Hybe debuted a sister app Weverse Shop (then called Weply), which sells exclusive gear from artists, from branded pajamas to K-pop’s signature light sticks, as well as concert tickets. (Fan club members get first dibs.) Last year, licensing and merchandise accounted for a quarter of Hybe revenue. Fan clubs brought in an additional $37 million.
Fandom culture in South Korea is well established: Just about every K-pop band has an official fan club, and the unveiling of the fan club name is an important part of any group’s debut. Hybe, however, has taken fandom to a new level, explains Dal Yong Jin, director of the Transnational Culture and Digital Technology Lab at Simon Fraser University in British Columbia, who has studied the globalization of Korean pop culture. “[South] Korea has advanced both popular culture and digital technologies, including smartphones and mobile instant messengers, like Kakao Talk and [Japan’s] Line,” he says, and the K-pop world has been particularly savvy on social media. But Hybe, he points out, “has platformized its own fan activities.”
What’s more, these apps aren’t exclusive to Hybe artists. Weverse currently hosts nearly three dozen musicians from other labels, including K-pop mega girl group Blackpink and even a few non-Korean acts. That’s helped drive the number of fans on the platform to 37 million—and their total postings to 232 million. Weverse promises to be even more powerful with the upcoming integration of the livestreaming app V Live, created by South Korean tech giant Naver. Downloaded more than 100 million times, V Live reportedly has more than 30 million monthly active users.
“They know how to turn the fan into a super fan, through meaningful, authentic dialogue,” says Mike Schabel, CEO of the cloud-streaming tech company Kiswe, “and how to create a symbiotic relationship between the band and their fan community.” He’s seen this up close. When the pandemic put a halt to concerts, Hybe quickly embraced livestreamed shows, putting together sophisticated extravaganzas for millions of paying fans. BTS and its labelmates have been streaming these shows on VenewLive, a cutting-edge platform with interactive fan elements (including a chat feed and cheer button) that Kiswe created with investment from Hybe and Universal Music Group, among others.
Last summer, 1.33 million viewers from 195 countries paid to see BTS’s two-day Muster Sowoozoo livestream event. This March, the group will livestream a Permission to Dance concert that they’re performing in front of fans in Seoul to people’s homes—and movie theaters—around the world.
“What BTS did was show that there is a sustainable business and value here,” says Schabel. He envisions these kinds of hybrid events, or “digital parties,” as he calls them, as key to the future of music, as well as other forms of entertainment. He brings up the Super Bowl, where you have 100,000 people in the stadium and 100 million watching from home. Why should the home-viewing experience be so passive? “You want to give [those 100 million viewers] something that’s rich,” he says, “to create the same level of emotional attachment with the event.”
The K-pop Cinematic Universe
Social media and livestreaming platforms are just the start for Hybe. The company is now pushing into web cartoons and novels, which are the basis of so much Korean film and television these days. The first stories, featuring members of BTS and other bands, debuted in January on Naver-owned Webtoon and Wattpad. Within two months, the BTS Webtoon, a superhero-style fantasy adventure story, had more than 21 million views, helped along by an original soundtrack created by two of the group’s members. (The other two cartoons, for Hybe’s Tomorrow x Together and Enhypen groups, have notched nearly 11 million views.) “K-pop artists have a heritage of a strong interplay with anime . . . [and] building out long narratives,” says Mulligan from Midia Research. Spinning K-pop idols into Marvel-eque superheroes is a natural next step.
These new content initiatives are also essential to staying relevant. “These kinds of multimedia audiovisual experiences are important because how much time we spend with different forms of entertainment is saturated,” explains Mulligan. “If you’re just an audio company, you’re only competing for one lane of the attention economy.” To that end, Hybe is also working on a BTS-themed video game, set to arrive in June 2022. NFTs, naturally, are coming down the pike, care of a tie-up with the Korean fintech company Dunamu. Hybe is planning to create its own exchange for fans to meet and trade NFT cards of artists. (Proof that BTS’s ARMY is nurtured—but not controlled—by Hybe: Many fans were furious at the NFT news, citing environmental concerns.)
“We want to diversify and enrich the connections between fans, artists, and the music,” says Hybe CEO Park. Crucially, Hybe is doing much of its platform-building in-house. Park won’t share specific details, but acknowledges, “Hybe is putting in a lot more investment and effort into our tech divisions—even more than what’s visible from the outside.”
Hybe’s efforts to expand its offerings are paying off. In 2021, more than half of its revenue came from products that didn’t require direct involvement of its artists. That balance will surely shift as BTS and other groups go back on tour in 2022 and concert earnings return to form. But Hybe is playing the long game. The key is moving beyond BTS as its primary intellectual property (IP), especially with mandatory military service looming for all of its members. In South Korea, all able-bodied males have to serve for at least 18 months by the time they’re 28, though the government recently pushed that age limit to 30 for certain high-profile entertainers. Mulligan cites the gaming company Rovio, of Angry Birds fame, as a cautionary tale: It “diversified” by creating theme parks, movies, and cartoons tied to Angry Birds. But diversifying along one brand can be a dead end.
That’s where Ithaca Holdings comes in.
On New Year’s Eve, Hybe offered fans a pay-per-view livestream extravaganza called Weverse Con 2022. With tickets available on Weverse Shop ($14 for a low-res stream; $46 for an HD one), the show featured eleborate performances by Hybe’s emerging K-pop groups, including Tomorrow x Together, Enhypen, and Seventeen. BTS, having just concluded their L.A. concerts, were on hiatus. So Hybe tapped a North American idol to take their place: Justin Bieber. He dropped in, via video, to perform an acoustic version of “Peaches” in an oversize puffer jacket.
Hybe’s acquisition of Scooter Braun’s Ithaca Holdings last year brought Bieber into the fold, along with a slew of other artists who don’t neatly fall under the label of “idol,” including Demi Lovato, J Balvin, David Guetta, and country music duo Florida Georgia Line. They certainly tick a lot of boxes toward IP diversification. In 2019, BTS accounted for 97% of Hybe’s revenue (then Big Hit). That needle is now moving, thanks to its expanded talent roster.
Hybe and Ithaca Holdings share a fair amount of DNA. Braun’s renown focus on talent management, for one, resonates with Hybe’s artist-driven approach. But there are other parallels. “Although Korea and the U.S. may have differences,” says Braun, “the love for music is universal and fans wanting various types of multimedia content from their favorite artists is not limited by borders.”
Though Bieber hasn’t yet held a concert on VenewLive, he did use an avatar to perform a virtual concert in November with digital entertainment company Wave. Ariana Grande, meanwhile, headlined Fortnite’s three-day Rift Tour last August, signaling the importance of gaming environments to the future of music. Instead of a web variety show, Lovato has their YouTube Originals documentary series, Dancing With the Devil, which was released last March and explored their near-fatal overdose. And while RM has his ARMY jogger pants for sale on Weverse, Bieber has his Drew House clothing line and Grande her new R.E.M. Beauty line.
“Ithaca Holdings was also an artist management and label company that expanded their media, retail, and story businesses based on artist IP,” says Park. “Our timelines may have been different but we were two companies fundamentally identical in our business philosophy and direction.”
Bringing together Hybe and Ithaca isn’t just about giving North American artists more access to Asian fans and South Korean artists more exposure in the West, though that’s certainly a priority. There are even more intriguing synergies in the works. UMG’s Geffen Records, for example, is teaming with Hybe America to launch a Seoul-style talent boot-camp competition, to be held in Los Angeles, with the goal of creating a new K-pop girl group with members from around the world. (BTS recently signed with UMG/Interscope Geffen A&M for distribution and marketing in the United States and other regions.) Park is clear that the competition is more than a chance to bring K-pop’s legendary artist training system to the U.S. It’s an opportunity to build “a community where the fan and artist live and breathe together, from the debut to their continuing musical journey”—in other words, to cultivate a vibrant fandom, one that’s not necessarily rooted in South Korea.
“Step one [for Hybe] was, export the artists they’ve got to international audiences,” says Mulligan. “Step two is, how do you then take that [fandom] model and make it work with artists in non-Korean markets?” That’s not to say that Grande will soon be soliciting movie recommendations from fans on Weverse or that Florida Georgia Line is about to face down a goofy obstacle course in a web variety show. Both Park and Braun say that whatever happens next will be organic and aligned with each artist’s identity.
But BTS has proven that Hybe’s more deliberate approach to fandom—asking artists to communicate directly and regularly with fans; creating reams of content and then spinning it out into all sorts of interactive entertainments; owning as many of those entertainment platforms as possible—works. And the odds are, given enough time, it’ll work for other artists in other musical genres. “It’s almost like a currency exchange mechanism,” Mulligan says. “Hybe just needs to know how to convert the Korean fandom won into the U.S. fandom dollar.” That’s one currency where inflation will be welcomed with choreographed chants and light sticks.