3 things the major labels can learn from Big Hit, home of BTS

The MBW Review is where we aim our microscope towards some of the music biz’s biggest recent goings-on. This time, we listen to the words of Big Hit Entertainment‘s top brass – and take notes. The MBW Review is supported by Instrumental.


“Big Hit is a content powerhouse.”

The words of Big Hit Entertainment CEO Bang Si-hyuk speaking at the Big Hit Corporate Briefing last week, in which – as MBW wrote yesterday – his Seoul-based company revealed that its half-year revenues grew 47% YoY in H1 2020.

While the three major labels only saw minor collective revenue growth in the six months to end of June, a different narrative obviously played out at Big Hit – home of K-Pop superstars BTS.

Big Hit’s leadership used their annual Briefing to explain how they managed to weather the pandemic to post record results in the H1 period.

They also offered a valuable insight into how their company has been uniquely structured over the years.

MBW has studied (and translated) the comments of Bang Si-hyuk and his colleagues, in order to distill three important things that record labels around the world – including Universal, Sony and Warner – can learn from the way Big Hit runs its business…


1) ‘Indirect artist involvement’

At Big Hit’s Briefing, the company cited its “Indirect Artist Involvement” businesses as being key to it doing well during the pandemic.

The notion of profiting from an artist without their direct involvement might, at first glance, appear to contradict the various iterations of ‘artist-first / artist friendly’ mantras that many modern music companies have written into their sales pitches.

But as claimed by Lenzo Seokjun Yoon, Global CEO of Big Hit, the preservation of Big Hit-signed artists’ well-being was exactly what led to the company’s development of its indirect artist involvement model.

“Artists must carry out their creative pursuits based on sound body and mind and must present their best selves to the fans,” explained Yoon.

“When the artists are directly involved in more activities and projects, their health and quality of the content are bound to be compromised. Such an environment is not sustainable for artists or the company.”

“When the artists are directly involved in more activities and projects, their health and quality of the content are bound to be compromised. Such an environment is not sustainable for artists or the company.”

Lenzo Seokjun Yoon,  Big Hit

Yoon went on to observe that “most entertainment companies have focused on releasing music, concerts, and content with direct artist involvement”. He added that this was also how Big Hit operated in its earlier years, revealing that “almost 80% of [our] profits came from advertisement and album sales directly driven by artists activities”.

Yoon went on to explain, however, that while Big Hit was gearing up for the launch of its flagship group BTS back in 2013, the company changed tack: it started to create and implement a business structure around the group that was capable of generating profit without the band members’ direct involvement.

Yoon explained:  “First, the IP was expanded. Spin-off content was created from the artists’ various activities to diversify and brand the content.

“As we attempted these Artist Indirect-Involvement Businesses, and succeeded, our yearly profit started to climb.

“As a result, in three short years from 2017 to 2019, ‘indirect-involvement’ profit more than doubled from 22.3% to 45.4%.

“And in challenging times such as now when artists cannot perform offline, Artist Indirect-Involvement Businesses allows us to provide our fans with all-new experiences.”


2) IP expansion

An example of one of Big Hit’s Artist Indirect businesses is ‘TinyTAN’.

These are cartoon character versions of the seven BTS members, which were debuted during June’s blockbuster online concert ‘Bang Bang Con The Live’.

Rhee Seung Suk, the General Manager of Big Hit’s IP division explained last week: “TinyTAN will come with a story of their own and brought to you as lifestyle products”.

One of the first partnerships signed for Big Hit’s TinyTAN creation was with Korean Fabric Softener brand Downy; the animated versions of BTS are now essentially the face of the brand. No artists are directly involved in this ongoing campaign.

“These Artist Indirect-Involvement Businesses enabled solid results despite the dire economic circumstances of the first half of 2020.”

Rhee Seung Suk

Rhee Seung Suk revealed last week that in addition to the Downy deal, the animated BTS characters’ business will see “a series of collaboration and licensing with many global brands”.

“Big Hit IP took the artists’ music, photos, music videos and other source IPs to expand to secondary IPs such as characters, universes, and music-based IPs, and built business models on this foundation,” explained Rhee Seung Suk.

(Apologies to all the US major label execs now mouthing, in unison: ‘Why can’t OUR artists just let us do this s**t?’)

Another example cited by Rhee Seung Suk as being particularly successful this year was the BTS Graphic Lyrics books, which launched in June.

They were published simultaneously in Korea, North America and Japan, and all five volumes in the series hit the Top 10 weekly bestseller list within a week both online and offline in the Kyobo Book store chain in Korea.

In total, there were 458 official Big Hit IP products sold in the first half of 2020, according to Rhee Seung Suk, who added that most of these projects were created with indirect artist involvement.

“These Artist Indirect-Involvement businesses enabled solid results despite the dire economic circumstances of the first half of 2020,” he explained.


3) Innovative, and fully owned, technology

Big Hit operates a fan app for its artists such as BTS, SEVENTEEN and TOMORROW X TOGETHER called Weverse, which recently hit 10 million app downloads, according to the company.

Weverse is described by Big Hit as “a one-of-a-kind global fandom platform,” and it has good reason for doing so.

The app houses content made by and for Big Hit artists including music videos, teasers and movies and allows fans to engage with the artists, in addition to buying merchandise and even live streaming online concerts.

At the Briefing last week, Big Hit Global CEO Lenzo Seokjun Yoon called Weverse a “platform-based Big Hit ecosystem” adding that the company had been working on it for several years.

Content available on Weverse includes the educational series “Learn! KOREAN with BTS,”  released in March, which saw new episodes released every week – with 23 episodes uploaded in total.

“It was a hit,” said Yoon at Big Hit’s Briefing, and he was right. Around 2.19m people from 200 countries watched the episodes 4.3m times in total.

“In the first half of 2020, the Big Hit ecosystem made remarkable achievements amidst the global crisis,” explained Yoon.

“Thanks to the Big Hit ecosystem we’ve established, we could successfully deliver online concerts and carry out additional business strategies without a hitch.”

Lenzo Seokjun Yoon, Big Hit

A prime example of one of those achievements was June’s pay-per-view BTS concert, ‘BANG BANG CON The Live’.

In the absence of a world tour and other events due to Covid-19, this virtual BTS concert ended up attracting 756,600 concurrent viewers from 107 regions and broke the records for the largest ever virtual concert audience and for the highest-paid online concert. It banked close to $20 million in ticket sales.

Everything from buying the ticket, to watching the concert and purchasing concert merchandise was processed exclusively in Big Hit’s Weverse app.

Lenzo Seokjun Yoon said: “Ticket booth, merchandise booth, venue and seats. Everything at an offline stadium were brought right into our platform, Weverse.

“Thanks to the Big Hit ecosystem we’ve established, we could successfully deliver online concerts and carry out additional business strategies without a hitch”.


The MBW Review is supported by Instrumental, which powers online scouting for A&R and talent teams within the music industry. Their leading scouting platform applies AI processes to Spotify and social data to unearth the fastest growing artists and tracks each day. Get in touch with the Instrumental team to find out how they can help power your scouting efforts. 

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