Although our plan was to publish the episodes on the original Big Three K-Pop labels back to back, there’s quite a bit of turmoil over at SM going on and we want to wait until things calm down and we have more clarity on what will happen. For that reason, we bumped up HYBE in the plan and so this week they are at the center of our third episode of our company-specific series where we deep-dive into South Korea’s top entertainment agencies.
Episodes:

1. YG (23/05/15)
2. JYP (23/05/29)
3. HYBE (23/06/19)
4. SM (23/07/03)
5. Smaller Agencies (23/07/17)

We also had to split up the information for this episode differently than how we did it for the OG Big Three, because HYBE’s journey to becoming what it is today has been vastly different than that of the Big Three. We will navigate the journey from the days of a nearly bankrupt Big Hit Entertainment to today’s behemoth conglomerate known as HYBE Corp. in three main chapters:

1. Section I – BigHit Music
2. Section II – Becoming HYBE (mainly centered around events that took place between 2019-2022)
3. Section III – Expansion Era (aka the quest for global domination)

Section I – BigHit Music (2005-2019 ish)

• BRIEF HISTORY
  • Founded in 2005 by Bang Si Hyuk 
  • Originally named Big Hit Entertainment, it was rebranded and restructured in March 2021 (more on that later)
  • Currently home to one soloist and two boy groups. 
  • Current CEO: Shin Young-jae
  • Big Hit’s first artist was vocal trio 8Eight in 2007, followed by 2AM through a joint management contract with JYP Ent. 
  • In 2007, the company nearly went bankrupt but was saved by the success of their ballad groups 8Eight and 2AM.
  • 2015 – Signal Entertainment bought Big Hit through a convertible bond (which meant that Big Hit could gain capital and they essentially buy itself back). They did this within a year. 
  • Pioneers in embracing social media and digital platforms to connect with fans.
• BANG PD
  • Bang Si Hyuk, also known as “Hitman Bang” or Bang PD, graduated from Seoul National University where he studied aesthetics.
  • He debuted as a composer and songwriter in the mid-90s. In 1997, he joined a local competition called the Yoo Jae-ha Music Contest, and won third place. This bronze award at the 6th iteration of the contest landed his demo CD in the hands of JYP. 
  • In 2019, JYP said that 20 years ago, JYP Entertainment consisted of only 3 employees: himself, Bang Si Hyuk and an employee in accounting.
  • While working for JYP, Bang Sihyuk produced numerous hit songs including:
    • Rain’s “Bad Guy”
    • g.o.d.’s “Friday Night” and “Sky Blue Balloon”
    • Baek Ji Young’s “Like Being Shot by a Bullet” & “My Ear’s Candy”
    • Park Ji Yoon’s “I’m in Love”
    • 2AM’s “Never Let You Go”
  • The success in music production (particularly g.o.d.’s “Friday Night”) earned him the title of “Hitman” Bang, leading him to eventually venture out on his own.
  • 2003-2004: roomies for 1 year with JYP
  • In 2005, Hitman Bang formally founded Big Hit Entertainment. 
  • In 2010, JYPE entrusted the management of their artist, 2AM, to Big Hit Entertainment, who managed the group until 2014. 
  • Also in 2010, Bang Sihyuk began putting together the Bulletproof Boy Scouts, a group that was meant to emulate 1TYM, centered around a brilliant poet/songwriter whom at the time was going around in the underground hip hop circle as Runch Randa. His name was Kim Namjun. 
• BIG HIT ENTERTAINMENT MUSICAL ACTS
  • 8Eight:
    • Co-ed vocal trio group consisting of Baek Chan, Lee Hyun, and Joo Hee. 
    • Co-managed with Source Music.
    • On December 21, 2014, Baek Chan and Joo Hee’s contracts with BigHit Entertainment and Source Music expired and the group became temporarily disbanded.
    • Reunited in 2020 and dropped 2 songs: “Fool Again” and the 10th Anni version of “Without a Heart”
  • Lee Hyun:
    • He debuted in 2007 as a member of the co-ed vocal group 8Eight, which disbanded in 2014. 
    • He was also a member of the disbanded vocal duo Homme from 2010 to 2018 with Changmin of 2AM. 
    • Lee is currently signed to Big Hit Music as a solo artist. 
    • He introduced his alter ego MIDNATT in March 2023, through the release of the single “Masquerade.”
  • 2AM
    • “Brother” group of 2PM, part of One Day 
    • Joint contract with JYP Entertainment. 
    • Mostly performed ballads. 
    • 3 out of the 5 members decided to leave JYP and Big Hit in 2015, start of hiatus.
    • Came back in 2021. 
    • Jo Kwon – does drag sometimes, BREAKING STEREOTYPES.
  • GLAM
    • 5-member hip hop-inspired girl group that debuted in July 2012 with the single “Party(XXO)”
    • Fun fact: j-hope, SUGA, Jimin, and Jungkook were back-up dancers for a performance of SeeU. (A cute vocaloid, meaning aespa wasn’t the first after all to bring avatars into the music game…)
    • 5 months after debuting, one of their members, Trinity, left the group for “personal reasons” (allegedly: was a sasaeng for Superjunior’s Leeteuk)
  • BTS
    • In 2007, when he was in middle school, RM started rapping under the name Runch Randa.
    • Worked with rap crew Daenamhyup with Supreme Boi. 
    • Invited to audition for a hip-hop agency, where he met Untouchable’s Sleepy.
    • Impressed by RM’s rapping, Sleepy connected RM to producer Bang Shi Hyuk, who invited him to audition for Big Hit Entertainment.
    • RM became the first member of BTS, and the whole group was built around him. SUGA (2nd place on Hit It audition, was signed as producer & trainee), j-hope (dancer background, auditioned at JYP, ended up at Big Hit, almost left), Jungkook (auditioned for the third season of Superstar K in Busan, did not pass, but got offers from 7 agencies, chose Big Hit because of RM) and Jin (scouted getting off a bus during college, auditioned to be an actor), then V (went to support his friend at the audition in his hometown of Daegu, ended up being the only pick), and Jimin (teacher at dance academy encouraged him to audition) was the last to join. 
    • The rest is actual literal history.
  • Tomorrow X Together (TXT)
    • Their name refers to five individuals who “come together under one dream in hopes of building a better tomorrow”
    • Debuted: March 4, 2019
    • Soobin: sent an email for the first audition with his video clip and personal information. The notice said the agency would call successful ones within one or two weeks. Several weeks passed by, and since he didn’t get a call, he thought he didn’t pass. He sent it in December of the ninth grade. Got a notice for the second audition in February next year. The company had to seek Soobin out for over two months. ‘Why did you call me two months later?’ he asked. They said he wrote the wrong number in the email. So, they spent a lot of time trying to find him…
    • Hueningkai: he and his older sister Lea would audition as a duo, kind of like AKMU (from YG). None of their auditions worked out, but one agent who ended up at Big Hit later had Hueningkai in the back of his mind from one of the auditions so they called him. 
    • Taehyun: Taehyun’s visuals had been so striking that he attracted the attention of tons of agencies. The Big Hit Entertainment employees knew they had to act quickly to snatch him up. They went directly to Taehyun’s school and waited for him outside. They asked his friends until someone gave his number. 
    • Beomgyu: they saw him in Daegu and asked him to audition, but he was in the middle of exams so he said no. The employee went back to Seoul and came back to Daegu the next day for Beomgyu to do his audition. He passed.
    • Yeonjun: Big Hit reached out via social media, so he decided to audition. But then before that audition came to fruition, he was on the subway and he was approached by a lady. She asked if he was signed to an agency and he said no, and when she handed him the card he was shook she was from Big Hit too. It was a completely different employee but the 2-4-1 hit made him be certain he had to audition. Big Hit’s legendary trainee. 
  • Trainee A
    • Trainee Group part of Big Hit, started in 2021 with 7 members.
    • Executives were following the accounts and they became quite popular 
    • 2 members left the group throughout the 2 years they were active. 
    • Mysteriously disbanded in Dec 2022.
    • Apparently none of them remained with Big Hit/HYBE.
• SCANDALS
  • Most scandals regarding Big Hit revolve around the artists. In this particular section we will only talk about the scandals of Big Hit Music and its musical acts. 
  • Hard to find any scandals… are they pure or just have the money to buy everyone off? 
  • Blackmailing Scandal:
    • Big Hit contracted a marketing company. Marketing company fell on bad times and threatened Big Hit saying he’d reveal illegal marketing tactics used to promote artists. An employee transferred money in an attempt to protect the artists. Big Hit reported the CEO and he was caught and jailed. It’s still unknown what the documents were. 
  • GLAM:
    • In 2014, actor Lee Byung Hun (Mr. Sunshine, Squid Game, I Saw The Devil, Our Blues) went to the police with the accusation that he was being blackmailed and extorted by two women — one of them being GLAM‘s Dahee (allegedly had video of them being intimate with him while his wife was pregnant).
    • After Dahee was found guilty and sentenced to jail time, Big Hit and Source Music decided to disband the group, stating that their contracts had come to an end.
    • On March 26, the Seoul District Court gave Dahee a 2-year suspended sentence instead of jail time.
    • It’s believed that after this incident, Hitman Bang said NO MORE GIRL GROUPS.
    • Big Hit’s only girl group. The new girl groups under HYBE are all part of different sub-labels and far enough removed from BIG HIT MUSIC/BTS. 
    • Dahee changed her name and is now a successful streamer. 
    • Inadvertently, thanks to GLAM disbanding, Big Hit focused all their attention on BTS. 
  • BTS:
    • SUGA sampled (unknowingly) cult leader Jim Jones on “What Do You Think?” for his D-2 mixtape.
    • Not a scandal but worth noting: RM and Jimin have been targets of serious death threats. 

Section II – Becoming HYBE (2019-2022 ish)

How did Big Hit Entertainment become HYBE?

In short:

1. Expanded to other areas of entertainment (technology, video games)
2. Acquisition of other labels
3. Expanded use of intellectual property (why you see BTS branded everything!) including:

• Music in video games
• Webtoons
• NFTs

Let’s talk about all of these in a bit more detail.

• EXPANDED TO OTHER AREAS OF ENTERTAINMENT
  • Technology:
    • Weverse:
      • South Korean mobile app and web platform created by South Korean entertainment company Big Hit/HYBE Corporation. The app specializes in hosting multimedia content and artist-to-fan communications for musicians.
      • You can write posts within a community, send “fan letters” or pictures to artists, participate in events like raffles, and join as many or as little communities as you want. 
      • BTS were the only ones leveraging Weverse at first, then TXT, and now there are 96 acts and counting who use the platform including K-Pop groups, solo artists, and more recently some western acts like MAX, Jeremy Zucker, Gracie Abrams, New Hope Club, Alexander 23, and LILHUDDY. 
    • Naver partnership/killing VLive
      • 2021 
      • Naver invested heavily in beNX/Weverse, acquiring 49%. 
      • You can’t compete with yourself so in return they transferred VLive to beNX/Weverse.  
      • This was allowed by the Korea Fair Trade Commission (KFTC) because other competitors exist, but… do they? VLive wasn’t like Bubble or Universe. More on this later. BIG FORESHADOWING ENERGY. 
      • Monetizing fan/artist interaction. New/incoming features:
        • Weverse DM (paid service for direct communication with artists, like Bubble)
        • Jelly currency 
        • Badges (gamification to make fans more desperate and competitive to “out-fan” each other.  
  • Production:
    • Hybe 360 & Hybe IP (dissolved July 2021) 
  • Products: 
    • Weverse Shop:
      • Used to be only available on mobile 
      • Shipping prices. Stopped working with DHL, now working with USPS, missing/mishandled packages, disgruntled fans, complaints unheard. 
      • Partnership with YG Plus
        • HYBE owns about 17% of YG Plus 
        • YG Plus helps distribute HYBE artists’ merch and YG artists joined Weverse. 
    • HYBE EDU:
      • An edu-tech company that develops content for study by utilizing artist IP and technology. Creates Korean language study packages and video content including ‘Learn! KOREAN with BTS’ and ‘Learn! KOREAN with TinyTAN.’
      • ‘Learn! KOREAN with BTS’ is being used as a Korean language textbook at nine universities in seven countries, including: The University of Sheffield in the UK, Middlebury College in the US, and EDHEC Business School in France.
      • “HYBE EDU’s learning content is distinctive in that it possesses high-quality curriculum and strengthens the motivation of learning by utilizing the artist IP and diversifying the user experience at the same time.” – Choi Youngnam, General Manager of HYBE EDU
    • Gaming:
      • Takeone Company Corp/Netmarble:
        • BTS World: launched in 2019. Players take the role of BTS’ manager, going through various journeys with each of the seven members from 2012 to 2019.
        • Currently rated 4.46 on Google Play store, 4.9 on Apple App Store.
      • Superb (game developer acquired in 2019)
        • HYBE acquired Superb and incorporated it as a 100% subsidiary (now Superb Corp/HYBE IM).
        • Rhythm Hive – rhythm games with songs from BTS, TXT, Seventeen, and Enhypen. 
        • BTS Island. 2022. “Enjoy 10 years of BTS’s journey with fun exciting puzzles that fuel your competitive spirit!” Currently rated 4.47 on Google Play store, 4.8 on Apple App Store.
  • Acquisitions/Partnerships:
    • BELIF+ Lab – launched in March 2019 (with CJ ENM). Enhypen.
      • Enhypen is a South Korean boy band formed by Belift Lab, a joint venture between CJ ENM and HYBE Corporation, through the 2020 survival competition show I-Land. The group is composed of seven members who debuted in the same year, to a lot of success.  
    • Source Music – Acquired on July 2019 
      • Established in 2009 by So Sung-jin (worked at both SM and JYP entertainment).
      • In July 2019, the company was acquired by Hybe Corporation, making the company part of the collective term “Hybe Labels”.
      • GFRIEND:
        • Following the completion of their six-year contract, all GFriend members left the company on May 22, 2021.
        • Source Music used Google’s questionnaire to reimburse membership fees related to the dissolution of the GFriend group, and the personal information of 22 survey participants was compromised due to improper disclosure of survey results. On April 13, 2022, the company was fined 3 million won by the Korea Personal Information Protection Commission.
      • Le Sserafim:
        • On March 14, 2022, former Iz*One members Sakura Miyawaki and Kim Chaewon signed exclusive contracts with Source Music and confirmed their debut in a new group.
        • Put together with 4 other trainees.
        • 6 members debuted, but after a bullying scandal that came to light even pre-debut, they lost the sixth member and have been active with five ever since.
        • Debuted May 2 2022.
    • Pledis Entertainment – Acquired in May 2020
      • Majority shareholder in May 2020
      • Acquisition approved by KFTC in October 2020
      • Independent decisions, but HYBE provides financial support and global promotions. 
      • Home to:
        • Seventeen
        • fromis_9
        • Minhyun (from NU’EST)
        • Baekho (from NU’EST)
    • KOZ Entertainment – Acquired in Nov 2020
      • Acquired in November 2020 
      • Home to:
        • Zico
        • Dvwn
        • BOYNEXTDOOR
    • Ithaca Holdings – Acquired in April 2021
      • Roster included Justin Bieber, J Balvin, Ariana Grande, Demi Lovato, Dan + Shay, Kid Laroy.
      • Bang PD and Scooter became besties during the process of getting to know each other.
      • Scooter visited South Korea and HYBE before closing the deal.
      • Bang has said that Ithaca and HYBE were so similar that the move was inevitable.
      • Deal:
        • HYBE gained complete ownership of Ithaca Holdings while Scooter joined HYBE board and kept CEO title. Ithaca Holdings was absorbed and became HYBE America.
        • At first, Scooter was co-CEO with veteran HYBE executive Lenzo Yoon.
        • About a year after the merge, Scooter became the sole CEO of HYBE America.
    • HYBE America:
      • Now the home of all the artists previously signed to Ithaca Holdings, plus:
        • CL outside of Korea
        • PSY (part of SB Projects)
      • Acquisitions:
        • Quality Control: home to Migos, Lil Baby, Quavo, City Girls, etc. (Feb 2023)
        • Big Machine Records – Tim McGraw, Brian Kelley (before the HYBE acquisition of Ithaca Holdings.)
      • Upcoming/in development:
        • Global search/audition for the next big girl group.
    • ADOR:
      • Stands for All Doors One Room.
      • In July 2019, Min Hee-jin joined HYBE (then-known as Big Hit) as their new CBO (Chief Brand Officer).
      • On November 12, 2021, HYBE officially announced the establishment of ADOR with Min Hee-jin as the CEO.
      • NewJeans: 5-member girl group. Debuted July 22, 2022, with the lead single “Attention.”
        prior to the release of their self-titled debut EP. Complete and utter global takeover.
    • Naeco
      • Founded on December 2022.
      • Anagram for “ocean.”
      • Japanese label with only one artist signed (as of this episode’s recording).

Section III – HYBE’s Expansion Era (2023 and beyond)

If anything has become abundantly clear this year, it is that Bang PD’s plans for HYBE, BIGHIT MUSIC, his artists, and K-Pop in general, is that the party is just getting started and they are prepping for serious takeovers. Global domination: underway.

SM stock acquisition, Bubble & Universe

• Lee Sooman founded SM, but recently fell out with current management, including his CEO nephew Chris Lee. LSM was SM’s biggest shareholder at 18%. 
• SM’s management announced a $173 million share sale deal with Kakao (but SM’s own bylaws forbade this).
• LSM sold HYBE 14.8% stake and filed an injunction request to block the deal with Kakao (if you’ve been a fan of K-Pop for at least two years before 2023 you’d know how big of a deal and unthinkable this transaction was).
• Kakao and HYBE were about to enter a bidding war, and HYBE said NOPE (HYBE’s tender offer was 120,000 KRW per share for a 25% stake, while Kakao offered 150,000 KRW for 35%). So HYBE sold 44% of its SM shares to Kakao, and kept an 8.8% stake.

Why are we talking about all this SM detail as part of HYBE’s takeover plans? Because not only did this have the potential to become a pivotal moment with SM surrendering control to a rival company, but with the remaining 8% stake they kept, it is speculated that part of the agreement with Kakao is that Dear U comes over to HYBE. Remember the BIG FORESHADOWING ENERGY announcement from Naver & Weverse’s joint venture? This is the payoff:

• Dear U is a South Korean software development company under SM Studios, a wholly-owned subsidiary of SM Entertainment. They developed Bubble, which is a fan engagement platform that all SM, JYP, and artists from another 66 agencies use to communicate with fans. 
• Universe, created by NCSoft, launched in January 2021 is another fan engagement platform that was used by artists including Monsta X, IVE, Cravity, Park Ji-hoon, Kep1er, (G)I-DLE, Viviz, Ateez, and Astro. They were acquired by Dear U in January of 2023, announced that the app was shutting down and all of its artists would transfer to Bubble. Some artists chose to go a different way, which we’ll talk about more in the final episode of this series when we cover the smaller companies. 

HYBE’s Weverse is already the #1 fan platform in Korea. Remember how it was launched just in 2019?

Well, Weverse exceeded 53.9 million subscribers at the end of 2022.

They already got all the artists from YG. So now when they merge all of Bubble’s artists into Weverse in September of 2023, they will become without a doubt THE most powerful fan engagement service, continuing their quest to the west. 

Remember how the KFTC let the deal between Weverse and Naver go through because there would still be a good amount of competition with all the other apps in the market?

That decision aged like milk left out in the sun.

To top it all off, Weverse DM is here. It’s similar to Bubble, where fans pay on a monthly basis to communicate with and receive personalized messages from the artist(s) they subscribe to. It’s being rolled out slowly, starting with smaller groups like TNX and Pentagon.

Ticketmaster, Official Platinum, and HYBE’s Earnings Report Call

• Remember our episode on Ticketmaster’s predatory dynamic pricing practices? We warned you HYBE was calling the shots…
• Public admission about applying Ticketmaster’s dynamic pricing to US market for SUGA’s Agust D tour as well as TXT’s. 
• Explicitly said every HYBE artist performing in the US will have this going forward. 
• If Dynamic Pricing is not an option at an international level, they will look for similar alternatives to boost their revenue wherever and however they can. 
• The international audience will pay the price while HYBE assumes a little bit of a “loss” domestically.

NFT fail with BTS, MOMENTICA:

• In November 2021, HYBE announced an NFT project, which most Army spoke up against due to sustainability issues. The backlash was enough that HYBE retracted the project and went quiet for a while. It’s been reported that RM himself gave a presentation to the company on why this project was a bad idea (the tangible ROI was not worth the equally tangible optics and discontent among the fandom) and so BTS was taken out of the equation for it. HYBE later came out with “MOMENTICA.” 

• From their website, “MOMENTICA is a platform for TAKE — the best moments of your favorite artists, captured in forms of digital collectibles.”

• They never used any of the words associated with NFTs like non-fungible or token throughout the site. It’s quite the deceptive approach, but it worked. Every major group under HYBE (SVT, TXT, fromis_9, Le Sserafim, and Enhypen) except for BTS has a collection. 

SUPERTONE

• In April of 2023, Bang PD was the cover star of Billboard Magazine. In his story, he spoke about the inability for human artists to completely fulfill fans, and AI having a strong future in the music industry.
• In comes the Supertone acquisition. The technology from this company can clone voice completely. “Not just tone, but also intonation. So for example, we can record your voice and then put or apply Angelina Jolie’s intonation or her speech and make it into a completely different voice. And this technology can also replicate the character of a person, in any language. You can make the voice older or younger.”
• Not long after this interview, HYBE launched teasers for the MIDNATT Project. Fans wondered who this artist was, and then the song “Masquerade” dropped in six languages and we got the reveal we never saw coming: Lee Hyun, Big Hit’s first signed artist and older brother figure to BTS and TXT had gotten a makeover and was having an AI-led renaissance with a new persona called MIDNATT. In our opinion, this was a brilliant move by HYBE, because this ensured that fans wouldn’t put up their guard and would be more ready to welcome this project and be willing to accept AI-derived music.

Brilliant. Evil. Geniuses. And with us being such big fans of the majority of their roster, we know we’re in for a bumpy ride on HYBE’s greed train.

This episode almost unalived us, but we made it somehow. You can watch us talk through all of this on our YouTube version of this behemoth episode: