💰 The business behind BTS
Big Hit just gave their corporate briefing. In a business with limited idols and unlimited global attention, it needs to increase revenue streams with indirect artist involvement content.
Everybody knows BTS, but do you know the business strategy that Big Hit is adopting to further strengthen their foothold in the entertainment industry? After all, the company managed to work their way into the previously unpenetrable big three entertainment companies of Korea — SM, JYP, and YG.
Now that they’ve made it, the next steps are obvious.
Big Hit needs to diversify and make sure that they do not overly rely on a single cash cow, namely BTS. With idols being a limited resource, it makes sense for the company to look at creating alternate revenue streams that do not require direct artist involvement.
All they have to do is to tap on BTS’s popularity, build a following for good alternative content, and keep soaring.
Big Hit Labels owns a bunch of groups
To provide some context, Big Hit Labels do not only have BTS under their belt. They own a series of k-pop groups such as SEVENTEEN, GFRIEND, TXT and NU’EST. They also have plans to launch a new girl and boy group in 2021 and 2022.
Artist indirect-involvement businesses
In a business with limited idols and unlimited worldwide attention, Big Hit needs to work on content that do not require direct artist involvement.
In its early years, almost 80% of Big Hit’s profits came from advertisement and album sales directly driven by artists activities.
This is something that all new and budding entertainment companies are sometimes forced to start with. Without scale, there is only so much that a small firm can do.
Now, Big Hit has expanded their IP and created spin-off content from various artists’ activities. Within three years from 2017 to 2019, indirect-involvement profit more than doubled from 22.3% to 45.4%.
This is done by expanding secondary IPs from the source IPs to create new characters, music, brands and universes that are related to BTS.
For instance, TinyTAN (awwww…) was created and even secured an ad with Downy. Graphic Lyrics were also launched to express song lyrics with illustrations. Merchandises, most of which were created with indirect artist involvement, were also rolled out to generate a bunch of revenue streams.
Big Hit also took part in multi-faceted licensing businesses. In the first half of 2020, they collaborated with Samsung Electronics for their Galaxy S20+ and Buds Plus BTS Edition. Unsurprisingly, all items sold out within an hour.
As for their collaboration with Starbucks, 90% of all stocks were sold out on the first day.
Those familiar with BTS may also be aware of BT21, which comprises eight adorable characters created by BTS members via original sketches.
All these additional revenue streams help Big Hit be more resilient in the long run, and also widen its outreach to fans. More importantly, Big Hit has selected brands with similar visions to work with — brands that they think fans will be comfortable and happy to reach out to.
Original content
Bit Hit has always kept its fans up to date with their artists through original content. In fact, one of the reasons why Big Hit became successful was due to their active presence on social media before it became a thing.
Big Hit has been producing and showing ‘Bangtan Bomb’ since 2013, and ‘Run BTS!’ since 2015, for free. ‘Bon Voyage’, a paid travel-themed variety show, was launched since 2016 and even has its own line of official IP products. Next week, ‘In the Soop, BTS’ will also be unveiled.
Beyond that, documentaries of the artist’s activities such as ‘Burn the Stage’, ‘Bring the Soul’, and ‘Break the Silence: Docu-Series’ have also been made. Two new releases, ‘Break the Silence: The Movie’ and ‘BTS MEMORIES OF 2019’, will also be launched soon. Through secondary content such as live streaming, live viewing and DVDs, 5.55 million fans, which is more than double of the actual concert goers, managed to watch the same world tour concert.
This is crazy.
While the artists were on their world tour, over 10 spinoff branded Artist Indirect-Involvement content was created. This excludes free behind the scene stories too.
It’s obvious — Big Hit is good at storytelling.
It maximises all possible content stemming from a series of events, such as world tours, and rolls them out with different and poignant story angles. It gives enough free content to get new fans and convert passing fans to loyal ones, and creates good and worthy paid content for fans who demand it.
All-in-one app
It seems like almost every successful B2C company has their own app nowadays. For Big Hit, it’s Weverse.
After all, usage = data, and big usage = big data.
Weverse is a one-of-a-kind global fandom platform that recently hit 10 million app downloads. The app enables close fan-artist communication, has a variety of video content, allows fans to shop for merchandises, and provides concert-related help such as the syncing of light stick wireless controls and the checking of wait times.
It allowed BTS to hold a virtual concert worldwide in the midst of COVID-19, raking up a world record of 756,000 live streams in June 2020 for ‘BANGBANGCON: THE LIVE’.
Prior to that, the company also held BANGBANGCON, a free online streaming festival for 24 hours from 18 to 19 April. 50.59 million views were recorded from over 162 countries, with half a million physical light sticks connected through Weverse, changing their colour according to the performance, improving the viewing experience. I suppose it doubled as a sort of test run for the live concert too.
Big Hit will also be launching the sale of the first textbook package, ‘Learn! KOREAN with BTS’, via the app. It even comes with a speaking pen, and has voice messages by BTS hidden in the book to make the learning experience more fun. Big Hit has also partnered with universities around the world to teach this as a course.
Games
As if Weverse isn’t enough, Superb, Big Hit’s game development subsidiary, will be launching a mobile rhythm game in 4Q 2020.
Big Hit will also collaborate with Netmarble to launch ’BTS Universe Story’, a sandbox game where users can create their own stories.
Big Hit seems to have… Everything.
Big Hit survived the pandemic due to their expansion of artist indirect-involvement business models, a balanced business portfolio, strong branding through video content, and a strong ecosystem centered on an all-in-one platform.
At the end of the day, business models can be replicated, and video concepts can be copied. Big Hit stands out because of its sincerity that lies at the heart of the company. They have stayed true to their mission of “Music & Artist for Healing”, comforting and inspiring people around the globe.
BTS became popular due to Big Hit’s social media strategy. They believe in sharing authenticity through candid content and behind the scene preparations, and they believe in showing appreciation to fans.
This sounds extremely cringy, but in a world where every detail is staged and curated, this level of sincerity is refreshing and much needed.
And that, is difficult to replicate.
You can watch the full hour of Big Hit’s corporate briefing below.
Pssst
Did you know that BTS is releasing Dynamite next week? Here’s a teaser photo for you:
Photo and video credits: Big Hit Labels.