[K Changers] ① Three Things Absent in 'SM, YG, JYP' but Present in HYBE

Entertainment Industry's Overwhelming Leader
Key Success Factors of HYBE, the Pioneer in K-Content
Professional Management, Proprietary Platform, Multi-Label Synergy

Hive, a leading domestic entertainment company, recorded sales of approximately 1.2 trillion KRW overseas alone last year. The total export value of the Korean ramen industry, which leads the food culture wave with K-food, was about 950 billion KRW in 2022. The government has set the content industry export target for 2027 at 25 billion USD (about 32.5 trillion KRW), double that of last year. The power of Korean cultural content has already been recognized worldwide. Where does the strength of content companies come from? Asia Economy begins a series dissecting the sources of competitiveness of Korean cultural content companies.

Hive is the undisputed leader in K-content. Continuously hitting big with BTS, Tomorrow X Together, NewJeans, and others, Hive was selected by TIME magazine in 2021 as one of the “100 Most Influential Companies in the World.” Samsung Electronics was listed alongside Hive at that time. In 2022, TIME included both Hive and The Pinkfong Company on the same list.

Hive was born in 2005 under the name Big Hit Entertainment. Last year, its sales reached 1.778 trillion KRW, with an operating profit of 237.6 billion KRW. Even when combining the sales of the former “Big 3” agencies SM, YG, and JYP (totaling 1.5853 trillion KRW), it is still smaller than Hive. In 18 years, it has grown into a company with 600 employees. It has closely pursued the game industry’s “3N” (Nexon, NCSoft, Netmarble), which was the representative of Korea’s content industry. How did Hive, a latecomer, surpass its “senior” competitors to become the overwhelming number one? Hive’s success formula lies in the synergy of three factors: management, platform, and system, which are absent in other agencies.

[Image source=Yonhap News]

Aggressive M&A Led by Professional Management

Hive’s management differs from typical agencies. Except for founder Bang Si-hyuk, the chairman of the board, all eight internal and external directors, including CEO Park Ji-won (former Nexon Korea CEO), come from non-entertainment backgrounds. Among the nine board members, including Chairman Bang Si-hyuk (Seoul National University, Department of Aesthetics), four are Seoul National University alumni. Additionally, many executives such as Lee Jin-hyung, CCO (former Vice President of WEMAKEPRICE), and Shin Young-jae, CEO of Big Hit Music (former Nexon), have extensive experience in industries like IT rather than entertainment.

Looking at other agencies, YG CEO Hwang Bo-kyung is a “YG man” who has built his career solely at YG since 2001. JYP CEO Jung Wook followed a similar path. SM CEO Lee Sung-soo is the nephew-in-law of founder Lee Soo-man, and COO Tak Young-joon also grew up with SM as an “SM man.”

With professional management at the forefront, Hive expanded aggressively through M&A. Representative acquisitions include Naver’s V Live and the U.S. label “Ithaca Holdings,” home to artists like Justin Bieber and Ariana Grande. Hive also acquired domestic agencies such as Pledis, Source Music, and KOZ Entertainment.

Maximizing IP Synergy through Proprietary Platform

Looking at Hive’s revenue structure last year, “direct participation” such as albums, concerts, and advertisements accounted for 973.8 billion KRW (54%), while “indirect participation” such as merchandise, licensing, content, and fan clubs accounted for 804.1 billion KRW (46%). The direct and indirect contributions are nearly equal. Typical agencies mainly rely on “direct participation,” the primary revenue generated by artists’ active efforts. Moreover, Hive’s overseas sales ratio (67%) is twice that of domestic sales (33%).

The large share of secondary revenue and overseas sales is thanks to its proprietary fandom platform, Weverse. Without relying on external platforms like Naver or Kakao, Hive independently distributes and consumes content such as videos, games, and education. Hive describes itself on its website as “a world-class entertainment lifestyle platform company based on music.” That platform is Weverse.

Fans can enjoy artists’ content such as real-time live broadcasts through Weverse. After integrating the V Live service, Weverse’s IP (intellectual property) power has grown even stronger. Not only Hive’s artists but also leading K-pop singers like BLACKPINK have joined Weverse. Artists under Ithaca Holdings, such as Bieber and Grande, are expected to appear on Weverse soon. The monthly active user count (MAU) reaches 8.4 million. Park Da-gyeom, a researcher at Hi Investment & Securities, said, “Hive’s IP power and Weverse are creating a synergistic effect.”

Multi-Label System Producing Consecutive Hits

[Image source=Yonhap News]

Another key to Hive’s success is its multi-label system. It grants autonomous and independent operational authority to multiple labels, with Hive acting as their holding company. For example, the flagship artist BTS belongs to Big Hit Music. In addition, Hive operates a total of 10 labels, including Pledis (Seventeen, etc.), ADOR (NewJeans, etc.), and KOZ (Zico, etc.).

The advantage of the multi-label system is that it can maximize artists’ potential through “tailored support.” Unlike the traditional system where one company is responsible for all artists, each label produces content separately for its artists. Producers are also assigned per label. This environment allows multiple artists to be active simultaneously. Each label approaches fans with specialized strategies, satisfying diverse fan preferences. Following Hive’s success, other major agencies have also started operating multi-label systems.

Hive was not the first to try multi-labels. However, it is the only company where a solution subsidiary creates secondary and tertiary business products such as content using music produced by the labels and handles distribution (Weverse). Thanks to this organically connected system, Hive has produced consecutive IP hits not only with BTS but also Tomorrow X Together, Seventeen, NewJeans, and others.

At a recent Kwanhoon Forum, Hive Chairman Bang Si-hyuk said, “We are considering acquiring a top-tier label in the Latin market that shares our philosophy and is interested in future innovation,” adding, “Our strategy is to connect top-tier labels and management companies by genre to maximize network effects.”

Bang Si-hyuk, Chairman of HYBE, is delivering a keynote speech at the Kwanhoon Forum held on the 15th at the Press Center in Jung-gu, Seoul. Photo by Dongju Yoon doso7@