BigHit Corporate Briefing with the Community [H2 of 2020]

On 13th August 2020, BigHit scheduled their conventional corporate briefing with the community to update the fandom and enthusiasts on the first half of 2020 and set our expectations for the rest of the year. Here’s BTS specific information from the hour long business-community meeting.

2020 World Tour cancellation

Bang Si-Hyuk, Chairman and CEO of BigHit Entertainment, opened the meeting on on their plans before COVID struck the world. They’d envisioned a world tour starting from Seoul in April and expanding to 16 other countries in the US, 7 in the EU and then cross Asia to conclude 2020. However, the idea got shelved with the onset of the pandemic.

Plan for world tour from Seoul in April, 16 countries in US , 7 in EU and then across Asia to finish of the year was shelved. This pushed the company to look out for the best options to connect with the community and keep them motivated — the fandom is a critical aspect to every venture they own.

The core of every decision was Big Hit’s philosophy and value of placing content and fans at the foremost

- Bang Si Hyuk

So, there was an immediate problem to solve (the community engagement) and the work for the content pieces planned for the future. BigHit identified that this was the time to deliver their message of “Music and Artist for healing”

Financial Report for H1 2020

BH achieved estimated before-audit performance of 294 billion KRW in revenue and 49.7 billion KRW in profits

- [K-IFRS]

These earning are accumulated from albums, music, concerts, official merchandise, content, and many more products from the BigHit Label. This phenomenal growth has been engineered from the keen focus on 3 elements: Label, Business and Platform.

A] Label

The foundation to BigHit’s business in entertainment is artist, music and content. Presently, the label composes of 5 teams: NU’EST, BTS, GFREND, SEVENTEEN and TXT. The label plans to widen their portfolio through

• New boy group from I-LAND for 2020
• Girl group for 2021
• Boy group for 2022

Artist accomplishments:

Bang Si Hyuk, moved on to share insights on the performance of the existing groups under the label. He quoted that the Goan Album Charts record that 40% of the album sales in Top100 for H1 belonged to the BigHit Label. BTS & Seventeen were two groups that’d occupied the first two spots of the leader boards in most occasions. The first half of 2020 recognized BTS as global superstars, with the group being a part of the “Dear Class of 2020” Online graduation ceremony by YouTube, in June 2020.

The group has planned a digital single: Dynamite for 21st August, 2020 and a new album for the fourth quarter of the year.

B] Business

Lenzo Seokjun Yoon, Global CEO of BigHit Entertainment, took over the second part of the meeting to unveil business model of the company. BigHit builds a structure to their operations from a fundamental question:

How can our label artists focus solely on creating content and album related acts and how can BigHit support them in these endeavors with profits?

The company reflected on this context, referencing, last year’s BTS World Tour for ‘Love Yourself’. The label’s artists carry creative pursuits that involve their soul, body and mind. So, assigning new projects to the members schedule may compromise their health, and eventually the content that’s delivered. This may not allow them to present their best selves to the fans — given that concert and albums are their primary focus. BigHit, like most entertainment companies, started by creating content that needed the artist’s involvement. 80% of their profits came from the albums that involved the members.

Content generation from Artist Indirect Involvement

But, with the debut of BTS, the company inferred that this model may not be sustainable for the band and the company. They paved the way for implementing a system that generates profit without involving the artists — the IP (intellectual property) expanded.

Spin-off contents were created from the artist’s activities to diversify the content pieces and the brand. After stabilizing and succeeding the indirect artist-involving content business, BigHit noticed the yearly profit percentages rise between 2017 and 2019.

Given the discontinuation of offline events of the artists, BigHit observed this model to be profitable for the company and an enriching experience for the fans to continue to travel with the members.

Content engine of Big Hit

Rhee Sung Suk, steered the discussion toward the IP aspect of BigHit, giving the viewers a gist of the content generation activity launched in H1 of 2020.

1. TinyTAN

The overview started with TinyTAN — the new animation series, featuring the 7 members of BTS, reborn as adorable little characters. They enter the real world through a magic door to empower those in need of healing and encouragement. The new series will have its own story and come to the public via lifestyle products (Downy). TinyTAN already has a series of collaborations and licensing planned with many global brands of everyday life.

2. Principles of secondary IP

Artists and their music / albums frame the primary content. Their photos, music videos, and other source IPs are expanded into secondary IP — characters, universes and music based IPs. This secondary IP content constitute a business model and revenue generation machine of it own. That said, the base principle of BigHit remained unchanged. It was all founded on:

- Making the fans feel like they are living and breathing with the artist as a part of their daily lives

- Offer healing for fans

- Bringing new IPs as a brand new experience

A significant example of this will be the ‘Graphic Lyrics’ launched in June. This is a series of books that hold pictorial renditions of chosen tracks, with narratives. It enabled the fans to experience the music in a new way. The series hit the ‘Top 10 weekly bestseller list’ in the first week of it’s release, online and offline in Kyobobooks.

3. Merchandising

This is major revenue stream in the music industry. BigHit also ventures into this segment during the performance of their artists. The team ensures that the official products are aligned with concert concept and released in tandem. This allows the audience to retain their fond memories from the concert within the product, and cherish that special time and place.

BigHit IP exhibited and sold 458 products in H1 of 2020, without direct involvement of the artist.

4. Licensing business:

BigHit stepped into a multi-faceted licensing business in June of last year.

• Samsung Electronics: GALAXY S20+ and BUDS PLUS BTS EDITION — sold out on the first day of release at Weverse shop (BTS Galaxy edition)
• Starbucks X BTS: for the launch of their “Be the Brightest Stars” campaign, that includes limited-edition beverages, food, and merchandise exclusively in South Korea, in different shades of purple. This campaign had sold out 90% of the stocks.

BigHit has mentioned that it keeps their consumers — fans of the artists as their priority on any licensing decisions. This mindset enables them to partner with entities that share a similar philosophy and reach closer to the fandom with products that are part of daily lives.

BigHit Original Content Machine

BigHit developed an in-house creative video team since 2011. The focus was to produce quality content as they foresaw the significance of digital content consumption. Things kick-started with the free content posted under the tagline: “Bangtan Bomb” — as they were a few minute long snippets of videos flicked on YouTube.

Free Variety Show:

Run BTS! : The premises of the show was to reveal the real side of the members, as they do the tasks provided by the production team (play sports, games or while going on trips). Run BTS! premiered in 2015 with 110+ episodes aired already. The show is simultaneously broadcast on JTBC , MNet and TBS in Japan.

Paid Variety Show:

BonVoyage: Launched in 2016, this is a travel themed show that portrays the journey of the BTS members. The stories may unfold in different parts of world: Finland, Hawaii, Malta, and many more.

In the Soop, BTS: Premiering from the second half of 2020, this new reality content will be available on JTBC and Weverse. It will show the members relaxing and being themselves in a forest, without any prompt from the production staff.

Documentaries:

A medley of content are created from world tours. Concerts are filmed and produced as DVDs. A production team follows the entire tour — at the hotel, backstage, pre-rehersals and gathers heartfelt commentaries of the members during the tour to collate them as documentaries for the fans. These are content that have an honest emotional expression of the artists are rendered into OTT documentary series, and the edited episode of the entire tour greet you at the box office as a movie. This includes the 2018 tour documentary, “Burn The Stage” and the 2019’s “Bring The Soul”.

The Edge of creating such docu-series

“BTS: Love Yourself” and “Love Yourself: Speak Yourself” world tour viewership numbers were 2.06 million. However, the live stream and DVD content viewership was an incredible 5.55 million — a doubling in the audience who enjoy secondary content from the tour. So, this tour record was created as a 7 part docu-series “Break the silence : Docu-series” and sold more than 100,000 units. On the same lines, “Break The Silence — The Movie” will be released in September 2020.

Inclusive of the BTS Memories: 2019 released as a DVD and Blu-ray in August, this world tour created over 10+ content spin-offs.

C] Platform

Technology has been a vital component of BigHit’s growth in the industry. Their subsidiary, BenX platform: Weverse has 10 million downloads and has become a global fandom platform. It allowed fan-artist interaction, video content library, shopping services by connecting with their commerce platform, innovated fan experience at the concert with light stick wireless controls.

Fast Company , a US Business Media Outlet chose BigHit as the world’s 50 most innovative companies 2020, with an emphasis on Weverse, for providing customized services to the fandom

Weverse was created for the fandom to continue to stay in touch with the artists and their content, despite geographical barriers. The power of this technology aced the test of times, specifically in these time of COVID. The industry was pushed to call off tours and move the activities over a digital platform — BigHit’s Weverse rose to the moment. 2020, saw the label stream two major concerts on the internet.

BANGBANGCON: [April 18, 19] is a 24 hour free online streaming festival. The platform enabled the fans to connect their light sticks through Weverse and the colors would change to match the performance on live.

The event recorded a 50.59 million viewership from 162 countries, with half a million light sticks connected to the app.

BANGBANGCON: THE LIVE [June14]: was launched as a paid concert to combat the culmination of on-stage performances. The event recorded 756,000 viewers from 106 countries, selling 746,000 merchandises . It went on to create a world record as the most live streamed concert by Guinness World Record UK.

The platform wasn’t limited to ticket/ merch sales or live streaming. BigHit went a step ahead to offer a multi-dimensional view of the arena in 6 angles.

The stadium was brought over the internet! The viewership was 15X an on-stage event.

Comeback 2020:

Concert: October 2020 will see BTS perform online and offline. It will be of MOTS:7 at MOTS ON:E concert.

BigHit Education

The company takes interest to help fans overcome the language barrier, communicate better with artist and enjoy the content. This sparked the ‘Learn! Korean with BTS’ — an artist featured educational initiative, since March 2020. The series recorded a viewership of 2.9 million people from 200 countries, streamed 4.3 million times.

Learn! Korean with BTS Book Package

The next on the line-up of their learning initiatives will be the launch of a Korean learning books drafted by educational experts. The first package will hit the Weverse platform on 24th August, 2020. The content will be appropriate for beginners or mid level learners. The learning kit comes with a speaking pen that reads the word when you touch them. Voice messages by BTS are hidden in the book for the learners to have enjoy the process.

Educational institution partnerships

The company has associated with Hankuk University of Foreign Studies and the Korean Foundation for a new journey. Furthermore, Korean language classes using the newly launched package will start from fall semester for Middleberry College in the US and Ecole Normale Suprieure of Paris, France.

The company plans to expand the association with educational institutions.

HYYH Notes

HYYH, the notes series is the BTS Universe expanded to literature. The first part sold 200K copies. The second part is planned for release on 25th August and will feature the monologues of the boys on the journey to find the Map Of The Soul.

Game Domain:

A new music game — ‘Superb’, a subsidiary of BH game development is set to launch on the 4th quarter of 2020. It will offer a mobile rythm game to enjoy music of the artists in a different manner. A multi-player system will be supported to enable fans from all over the world collaborate with one another.

Another game in collaboration with Netmarble — ‘BTS Universe Story’ is also working its way towards release. BTS universe (BU) original story will unfold in this game. This will offer a sandbox version, and users can create their own stories , share and interact within the community.

Closing note

BigHit Team has been working from home over the last few months. This phase has enabled them understand the significance of sincerity in performing their operations. BigHit delivers this sincerity in training their artists and employees. The company has been quoted by a study from the Harvard Business School as one that has a balance between system’s efficiency and artists individuality.

Their 800 employee team will continue to strive for excellence with passion in hearts and strive to become a music-based, leading, entertainment, lifestyle and a platform company!

All images used belong to BigHit entertainment.

Thanks for reading, ARMY!

Stay healthy and happy ❤