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Hybe Corporation

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HYBE Corporation
Native name
하이브
haibeu
TypePublic
KRX: 352820
Industry
Genre
FoundedFebruary 1, 2005; 16 years ago (2005-02-01) (as Big Hit Entertainment Co., Ltd.)
March 31, 2021; 5 months ago (2021-03-31) (as HYBE Corporation)
FounderBang Si-hyuk
Headquarters
Yongsan Trade Center, Yongsan,[1] Seoul
,
South Korea
Key people
  • Bang Si-hyuk (Chairman)
  • Park Ji-won (CEO)
  • Lenzo Yoon (CEO, HYBE America)
  • Min Hee-jin (CBO)
Services
  • Music Production, Publishing, New Artist Development, Artist Management
  • 360° Business, IP, Platform & Education Business
Revenue
  • Increase ₩796.3 billion (2020)
  • Increase ₩86.2 billion (2020)
Owner
  • Bang Si-hyuk (34.74%)
  • Netmarble Games (19.90%)
  • Individuals (22.38%)
  • Others (22.98%)
[2]
Number of employees
Approx. 1000 (As of December 2020)[3]
SubsidiariesSee subsidiaries
Websitehybecorp.com

Hybe Corporation (Korean: 하이브, stylized as HYBE Corporation) is a South Korean entertainment company established in 2005 by Bang Si-hyuk as Big Hit Entertainment Co., Ltd. The company operates as a record label, talent agency, music production company, event management and concert production company, and as a music publishing house. The company has multiple subsidiaries, including Big Hit Music, Source Music, Pledis Entertainment, Belift Lab, and KOZ Entertainment, collectively known as HYBE Labels.

History

2005–2021: Big Hit Entertainment Co., Ltd

Big Hit Entertainment was founded on February 1, 2005,[4] and signed the vocal trio 8Eight in 2007.[5] In 2010, the company signed a joint management contract with JYP Entertainment over the boy group 2AM.[6] That year, Bang Si-hyuk signed RM as the first member of BTS and launched nationwide auditions to recruit other members for the group.[7] BTS made their debut under Big Hit on June 13, 2013.[8]

In 2012, the company signed Lim Jeong-hee,[9] and formed the girl group GLAM as a collaboration with Source Music.[10] The group was active until 2014, when it was disbanded due to a controversy involving one of its members Kim Da-hee—Kim was sentenced to prison after being found guilty of blackmailing actor Lee Byung-hun.[11][12][13]

Following the end of the joint contract between Big Hit and JYP in April 2014, three members of 2AM returned to JYP, while Lee Chang-min remained with Big Hit in order to continue with his solo career and as part of the duo Homme.[6] The year also saw the disbandment of 8Eight after Baek Chan and Joo Hee's contracts with Big Hit ended.[5]

In May 2015, Lim Jeong-hee parted ways with the agency, following the expiration of her three-year contract,[9] and Signal Entertainment Group, a KOSDAQ-listed company specializing in artist management and television production, acquired Big Hit through a KR₩6 billion convertible bond.[14] In early 2016, Big Hit ended their stake relationship with Signal and made a full settlement of the bonds.[15][16]

In February 2018, Homme disbanded after member Changmin's contract came to an end. He left the company to start his own agency, while Lee Hyun continued on as a solo artist.[17] In August, Big Hit and CJ E&M released information stating plans to create a joint company. Filed under the name Belift, the company would reportedly be split 52% to the latter and 48% to the former,[18] and debut a boy group in 2020.[19] In October, BTS renewed and extended their contract with the agency for seven more years.[20] Big Hit was voted best investment company of the year at the 2018 Korea VC Awards in December.[21]

Big Hit debuted its second male group, Tomorrow X Together (TXT), in March 2019.[22] Also that month, former CBO Lenzo Yoon was appointed co-CEO with Bang Si-hyuk.[23] Yoon would focus on the business components of the company while Bang's focus would be on creative production.[24] In July 2019, the agency acquired Source Music,[25] and in August, the video game firm Superb.[26] Thanks to the Weverse and Weverse Shop[a] apps developed by its subsidiary beNX, Big Hit was chosen as the fourth most innovative company of 2020 worldwide by Fast Company.[28]

In May 2020, Big Hit became the majority shareholder of Pledis Entertainment. The company announced that the record label would retain its independence, but its artists (which include boy bands NU'EST and Seventeen) would be more widely promoted outside of South Korea.[29] The Fair Trade Commission (hereinafter KFTC) officially approved Big Hit's acquisition of Pledis in October.[30] The following month, Big Hit announced that it had acquired KOZ Entertainment, a record label founded by rapper Zico.[31]

In January 2021, news media reported that Big Hit and beNX had invested a combined ₩70 billion (US$63 million) in YG Plus and acquired 17.9% of the media and advertisement company under YG Entertainment in a merchandising and distribution deal that would see the aforementioned's artists join Weverse's social media and shop platforms.[32][33][34] It was also announced that Naver Corporation would invest ₩354.8 billion ($321 million) in beNX Inc.—acquiring 49% of the subsidiary—and transfer its V Live video streaming service to the latter for the development of a new integrated fan community platform. beNX was later renamed Weverse Company Inc. subsequent to the Naver deal.[35] The KFTC approved the merger on May 13, 2021.[36] On February 17, Big Hit and Universal Music Group (UMG) announced a strategic partnership between the two companies that will see them collaborate on various music and technology-related endeavours.[37] At the forefront of this is a joint venture between Big Hit and Geffen Records—a UMG flagship label—to debut a global boy group through a new, Los Angeles-based label, with a global audition program set to air in 2022. Big Hit will be responsible for selecting and training the artists, while UMG will be in charge of music production, global distribution, and marketing.[38] Additionally, more UMG artists will join Weverse, which is already home to Gracie Abrams, New Hope Club, and Alexander 23—Yungblud is next in line to join the platform.[39] On February 25, Big Hit announced a ₩4 billion ($3.6 million) investment in a Korea-based AI company, Supertone, that specializes in creating hyper-realistic voices using technology.[40]

2021–present: Hybe Corporation

In the second week of March, Big Hit announced its rebranding into an entertainment lifestyle platform company under the name Hybe Corporation.[41] On March 19, the company released an online presentation detailing its organizational restructuring, and stated that the name "Big Hit Entertainment" (as related to its music operations) would become Big Hit Music under Hybe's new Labels division—the rename was subject to a shareholders meeting held on March 30.[42][43] The presentation also provided a look into the design of Hybe's newly completed headquarters located in the Yongsan Trade Center in Yongsan District—the company officially relocated to the building on March 22.[42][1] The rebrand went into effect on March 31.[44]

On April 2, Hybe's 100% stake acquisition of Scooter Braun's Ithaca Holdings and all its properties, including SB Projects (which manages artists like Justin Bieber and Ariana Grande) and Big Machine Label Group, through its subsidiary Hybe America,[b] was announced.[45][46] Hybe invested $950 million (₩1.07 trillion) into Hybe America, to finance the buyout,[47] and paid a total of $1.05 billion to Ithaca shareholders and bondholders.[48] BH Odyssey Merger Sub, a newly created subsidiary of Hybe America, facilitated the acquisition, and was later dissolved after the deal's finalization.[49][50] Minority shareholder and original investor The Carlyle Group sold its stake in Ithaca as part of the deal, which also included management, label, and publishing services for all artists under Hybe, SB and Big Machine. Braun joined Hybe's board, and Scott Borchetta retained his position as CEO of Big Machine.[45][51]

On April 27, Time named Hybe one of the "100 Most Influential Companies of 2021". The list "highlights businesses making an extraordinary impact around the world"—Hybe was included in the "Pioneers" section.[52] On May 10, Japanese streaming platform Showroom announced a business and capital partnership with Hybe to improve its domestic services and expand access to Japanese content in South Korea, the United States, and globally.[53][54] Hybe was added to the MSCI Korea index on May 12—the index updated on May 28.[55] On July 1, following a second organizational restructuring, Hybe announced Bang's resignation as CEO of the company to return his focus to music production. He was replaced by Park Ji-won, but retained his position as Chairman of the Board of Directors.[56][57]

Company value and investments

Big Hit Entertainment initially operated as a private company with Bang Si-hyuk as the largest shareholder of its stock.[58] In March 2017, the Korean mobile gaming company Netmarble acquired the second largest percentage of the company, paying a reported ₩201.4 billion ($191.8 million) for 25.71%[59]—its CEO Bang Joon-hyuk, and Bang Si-hyuk are cousins.[60] In October 2018, private investment firm STIC Investments received an undisclosed share of Big Hit for an investment of roughly ₩104 billion ($93 million).[61]

In 2007, Big Hit had four employees and was near bankruptcy, but Bang was able to keep the company afloat after the local success of 8Eight's Without a Heart in 2009.[62] Its value rose over the years thanks to the global popularity of its first boy group BTS.[63] In March 2018, Big Hit's earnings were publicized for the first time. The company reported revenue of ₩92.4 billion ($82 million) and operating profit of ₩32.5 billion ($29 million) for 2017.[64][65] Initial estimates valued Big Hit at up to ₩700 billion ($624 million) if entered into an IPO that very month, making CEO Bang the richest in the South Korean entertainment business due to his large shareholding position, and leaving him with personal ownership value of roughly ₩350 billion ($314 million).[66] By October 2018, the company was valued at more than ₩1 trillion.[65]

Big Hit's success has been attributed to its innovative management style, more like an IT company than an entertainment company, which has become the new standard in the K-pop industry; it includes a wide usage of social media to capture people's interest and transform it into sales, the creation of artist-related multimedia contents, and the full use of fandom energy.[67][68] Financials published in March 2019 for the previous year, showed a 132% increase in sales compared to 2017, with Big Hit making approximately ₩214.2 billion ($189.38 million). Operating profit rose 97% to ₩64.1 billion ($56.72 million), while net profit rose 105% to ₩50.2 billion ($44.41 million).[69] By June 2019, the company was valued between ₩1.28–2.22 trillion.[70] As of March 2020, its total value was roughly ₩6 trillion ($5 billion).[71] Big Hit commenced plans to go public on May 21, and applied for a pre-IPO consultation with the Korea Exchange. This is required under South Korean law before a company can file paperwork for an IPO.[72] One week later, the company filed for a preliminary review of their planned IPO.[73] On October 15, Big Hit was listed in the KOSPI index and began trading stocks.[74][75]

In February 2021, Big Hit published its first annual report since going public. The company recorded net income of ₩86.2 billion ($77.6 million) for 2020, a 19.1% increase compared to the previous year's ₩72.4 billion.[76] Operating profit rose 44.3% to ₩142.4 billion, while sales increased 35.6% to ₩796.3 billion[76]—bolstered in part by strong album sales and the company's various acquisitions—with Big Hit experiencing its best quarterly performance yet in the fourth quarter of 2020.[77] Though concert revenue decreased in the wake of the COVID-19 pandemic, merchandise, fan-club, and online-content revenue increased 53%, 71%, and 66% respectively.[77][78]

On April 2, Korean news media reported that American media and entertainment conglomerate Warner Bros. is preparing to invest up to ₩500 billion in Hybe. Once finalized, Warner will acquire a 5.9% stake in the company, through HBO Max, and secure sole rights to exclusive content such as live BTS concerts and documentaries.[79][80]

Divisions and subsidiaries

Hybe HQ

Hybe HQ is a wholly-owned subsidiary of Hybe Corporation. The company comprises three divisions: Hybe Labels, Hybe Solutions, and Hybe Platforms. Under each division are wholly or partially owned subsidiaries of its parent corporation.[81][82]

Hybe Labels

This is the entertainment and music production division. Prior to the rebranding, it was known as Big Hit Labels. Subsidiaries within the division operate independently of Hybe Corporation but receive creative support.[42]

Hybe Solutions

The "solutions" division is made up of specialized business units for video content, IP, learning, and games. Secondary and tertiary businesses are created based on the creative output of each label.[81] In May 2021, Hybe Edu signed a business agreement with the International Korean Language Education Foundation (IKLEF) to develop Korean-language textbooks for distribution to overseas elementary and secondary schools through the Ministry of Education beginning in 2022. Various other online and offline content will also be created using BTS IP in response to an increasing demand for Korean-language education in foreign countries.[86] On July 2, 2021, it was announced that Hybe 360 and Hybe IP has been dissolved and merged into Hybe Corporation.[87]

  • HYBE Edu[c]
  • Superb

Hybe Platforms

This is the technology division. It manages the social networking and entertainment platform Weverse, which serves as a hub for connecting and expanding all of Hybe's contents and services.[81] In May 2021, Weverse Company invested in US startup Fave, an F2F platform for fandoms, as part of its plans to strengthen business opportunities in that territory.[88]

  • Weverse Company[d]

Hybe America

Prior to the rebrand, the subsidiary was known as Big Hit America. Following the rebranding, Hybe Corporation bought over all ₩1.7 trillion ($1.5 billion) of Big Hit America's shares, making it a wholly owned subsidiary under the corporation, and it became Hybe America.[49] This was in preparation for Hybe Corporation's acquisition of Ithaca Holdings through Hybe America.[b] BH Odyssey Merger Sub was created as a subsidiary of Hybe America to facilitate its buyout of Ithaca. Once finalized, Ithaca would become a subsidiary of Hybe America, and BH Odyssey would be dissolved.[49][45] The merger is assumed to have been completed in the first quarter of 2021 per quarterly earning reports published on May 14.[89]

In July, Yoon was appointed co-CEO of Hybe America, and will jointly oversee US operations together with Braun. Yoon will "take charge of the localization of Hybe's K-pop business model in the US" and "oversee the training, production and marketing process through which new talent is discovered", while Braun will "focus specifically on solidifying Hybe's presence in the US music industry" and "cementing [the company's] competitiveness in the stateside market". Jaesang Lee, the Chief Strategy Officer (CSO) who led the Ithaca acquisition, serves as Chief Operations Officer (COO).[90][57]

Hybe Japan

Following Hybe's second leadership restructuring in July 2021, its Japanese subsidiaries, Hybe Solutions Japan and Hybe T&D Japan[e], were integrated to form a regional headquarters, Hybe Japan. The Japanese branch will operate as an independent entity under former Hybe Solutions Japan CEO Han Hyun-rok, who was newly appointed as CEO,[91] and oversee music production, music publishing, music copyright management, artist management, and talent scouting and development,[92] as well as facilitate other Hybe artists' entry into the Japanese market.[56] Plans are already underway for the launch of a new multinational boy group,[92] and a collaboration with Hiroomi Tosaka of J Soul Brothers for the creation a new girl group has also been announced.[93]

Hybe Labels Japan was incorporated separately under Hybe's management philosophy that recognizes the label's independence.

Philanthropy

In 2017, it was revealed that Big Hit Entertainment donated ₩30 million to the 4/16 Sewol Families for Truth and A Safer Society, an organization connected to the families of the 2014 Sewol Ferry Disaster.[94]

In June 2020, Big Hit, together with BTS, donated $1 million in support of the Black Lives Matter movement, during the George Floyd protests,[95] and another $1 million to Live Nation's Crew Nation campaign to help support live music personnel during the COVID-19 pandemic.[96]

Filmography

Drama

Reality/Variety

Concerts

Date Title Venue Attendance Ref.
December 31, 2020 2021 NEW YEAR'S EVE LIVE presented by Weverse Weverse (online) N/A [97]

Notes

  1. ^ formerly Weply prior to March 9, 2020[27]
  2. ^ Jump up to: a b Though corporate filing documentation uses the name "Big Hit America" it is Hybe America being referenced. News outlets interchangeably use "Big Hit America" and "Hybe America" to refer to the company acquiring Ithaca for Hybe Corp, indicating that they are one and the same. This article hereinafter uses Hybe America only.
  3. ^ formerly beORIGIN Co., Ltd.
  4. ^ formerly beNX Co., Ltd.
  5. ^ formerly TNDJ

References

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  27. ^ @weverseshop (March 2, 2020). "From 9 March 2020, the global fan merch app, Weply is changing its name to Weverse Shop! All your Weply account information will remain the same on Weverse Shop. You can shop your favorite merch without having to worry about a thing! More info here!