[Big Tech, Big Change②] Naver Challenges 'Digital Performances' with SM and YG

Integration of Platform Technologies like Streaming and Payment into Content from Entertainment Companies such as SM and YG

Digital Concerts on the Global Stage
Infinite Expansion as a New Business Model

[Asia Economy Reporter Buaeri] When SM Entertainment's united group 'SuperM' delivered a dazzling performance, 120 million hearts poured in from fans all over the world. The concert took place in an online space. And countless fans connected online enjoyed the concert. This is the story of the online paid concert 'Beyond LIVE,' a joint project between SM Entertainment and Naver. With Naver's participation, the performance market, which was mainly offline, is transforming into a new realm called 'digital concerts.'

Naver Ventures into the Entertainment Market

According to industry sources on the 24th, Naver is laying the groundwork for the 'digital concert' business by investing in shares or signing memorandums of understanding (MOUs) with major domestic agencies such as SM and YG. In April, Naver signed an MOU for video content business with SM Entertainment, and recently it is known to be considering investing in SM. Previously, in 2017, Naver invested 100 billion KRW in YG Entertainment. Naver acquired 9.13% of YG's shares for 50 billion KRW, becoming the second-largest shareholder, and the remaining 50 billion KRW was contributed to YG's investment subsidiary, YG Investment.

With platform technology, Naver's collaboration with entertainment companies has made concert 'digitalization' possible. Rather than simply broadcasting existing offline concerts online, these are performances optimized entirely for digital. In April, SuperM's online-only paid concert 'Beyond LIVE' was held for 120 minutes on a global stage.

In this concert, SM Entertainment provided the content, while Naver handled streaming, payment systems, and integrated various digital effects using ICT technology. For concerts, content is important, but platform technology that connects streaming servers and playback quickly and stably is essential. Naver implemented live streaming without interruptions or delays using its self-developed video technology. Even the 'light sticks' seen at concerts were digitized. Fans who purchased light sticks could send light stick effects to the concert video.

75,000 Viewers from 109 Countries Worldwide... 2.4 Billion KRW Revenue in 2 Hours

Naver regards 'digital concerts' as a new business model. A Naver official explained, "Unlike YouTube, which earns revenue through advertising, this is a differentiated business model," adding, "If we attempt paid concerts, a revenue model will emerge, and the platform will grow further." In fact, the revenue from the recent Beyond LIVE concert is estimated to have reached 2.4 billion KRW in just two hours. The 120-minute concert was viewed by about 75,000 people from 109 countries worldwide, and the concert video required a paid purchase of 33,000 KRW to watch. Multiplying 33,000 KRW by 75,000 viewers results in approximately 2.475 billion KRW. This revenue is shared between SM Entertainment and Naver. Since digital concerts can be viewed by anyone worldwide as long as they have internet access, unlimited expansion is possible.

Experts predict that with ICT companies like Naver entering the field, a new domain called 'digital concerts' will emerge in the performance industry. Professor Kim Seoryong of the Department of Performance Planning and Management at Cheongwoon University said, "IT companies are conducting business with technology, naturally changing the media environment, and a new channel called 'digital concerts' has emerged," adding, "From Naver's perspective, not only do they earn revenue from concerts, but fans who come for the concerts are reproduced as platform users, creating a win-win structure."