HYBE has struck what it calls an expanded long-term agreement with Universal Music Group (UMG). The deal provides UMG with exclusive distribution rights for HYBE’s music for the next 10 years.
The even bigger news? The deal will also see UMG invest in – and further collaborate with – HYBE’s global superfan platform, Weverse. (Sources tell MBW that UMG has made a minority investment in Weverse as part of the new partnership.)
According to the two companies’ announcement today (March 26), the “partnership will help enhance the growth” of Weverse in North America.
The expanded agreement also gives HYBE’s roster of artists and labels access to UMG’s global network, according to the announcement.
HYBE and UMG will additionally collaborate on artist promotions and marketing activities in North America under the oversight of Scooter Braun, CEO of HYBE America.
HYBE and UMG first teamed up in 2017 on megastars BTS, through a distribution agreement in Japan.
In 2021, the companies expanded their relationship with a global strategic agreement which saw collaborations across multiple projects as well as HYBE’s Weverse.
Universal’s Geffen Records and HYBE also announced a joint venture to launch The Debut: Dream Academy – aimed to implement HYBE’s “K-Pop methodology” in the US – in which six trainees were selected through a global audition process to become part of KATSEYE. The group will debut later this year.
According to the announcement on Tuesday (March 26), the new partnership was put together by UMG Chairman and CEO Sir Lucian Grainge, HYBE’s Chairman Bang Si-Hyuk, and HYBE America’s CEO Scooter Braun.
Commenting on the new partnership, Sir Lucian Grainge, Chairman and CEO of Universal Music Group, said: “Chairman Bang, Scooter Braun and Jiwon Park have brought an innovative and progressive vision to the industry that underscores music’s global power.”
“With the opportunities in engaging the superfan via their groundbreaking Weverse model, we’re thrilled to grow and expand our platform business collaboration as we evolve together leading the music industry’s evolution.”
Sir Lucian Grainge, Universal Music Group
Added Grainge: “With the opportunities in engaging the superfan via their groundbreaking Weverse model, we’re thrilled to grow and expand our platform business collaboration as we evolve together leading the music industry’s evolution.”
“We are certain that this will expand our global footprint, while benefiting our fans, artists, and labels.”
Bang Si-Hyuk, HYBE
Bang Si-Hyuk, chairman of HYBE, added: “A partnership of this magnitude only comes together when both sides are equally committed to continued growth. UMG is an iconic music company and together with HYBE, the potential is endless.
“We are certain that this will expand our global footprint, while benefiting our fans, artists, and labels.”
“This incredible partnership between our companies will ensure mutual benefits and collaborations for the fans, teams, artists, and labels around the world.”
Scooter Braun, HYBE America
Scooter Braun, CEO of HYBE America said: “This incredible partnership between our companies will ensure mutual benefits and collaborations for the fans, teams, artists, and labels around the world.
“The opportunity created here not only allows us to help our current roster, but grow opportunities for independent artists and labels globally.
“I’ve known and respected Sir Lucian Grainge for many years, and alongside Chairman Bang and HYBE CEO Jiwon Park, we look forward to the undeniable opportunities that will come from this partnership as we together grow the music industry’s future.”
Today’s news of UMG’s deeper collaboration with HYBE’s Weverse arrives just a few weeks after MBW asked in an ‘MBW Reacts’ article if HYBE’s Weverse platform could offer a template for Universal Music Group’s courting of ‘superfans’ in 2024?
The Weverse app has previously branched out beyond HYBE-signed acts, building fan communities for the likes of singer-songwriter Gracie Abrams (Interscope Records), Alexander 23 (Republic) and Jeremy Zucker (Interscope).
As we noted a few weeks ago, all three of those artists are signed to Universal labels, following an experimental deal inked between Weverse and UMG that dates back to 2020.
According to HYBE’s recently published financial results for FY 2023, the company’s revenues generated by its ‘Fan Club etc.’ reached 91.18 billion South Korea Won last year.
That revenue figure converts to USD $69.7 million as per the average annual exchange rate published by the IRS, and was up 35.9% YoY.
HYBE reported that Weverse counted 10.1 million Monthly Active Users at the end of Q4 (the three months to end of December), versus 10.6 million MAUs in the prior quarter (Q3 2023).
Weverse revealed in its 2023 Fandom trend report, published in December, that those 10 million monthly active users are located across 245 countries and regions.
The platform says that it witnessed a “significant surge” in new users in 2023 in Asia including Korea, China, Indonesia, the Philippines, India and Japan along with United States “serving as focal points for new user acquisition”.
Additionally, Weverse says that it experienced “impressive growth rates” in Africa (+46.8%) and the Middle East (+25%) in 2023.
Weverse reported that in 2023, each user on its platform spent an average of 215 minutes per month (+46% YoY) and visited the platform for an average of 10.2 days per month (+10.4% YoY).
Today’s news lands nearly three months after Sir Lucian Grainge noted in his New Year note to UMG staff that, following UMG’s push for a transition to an ‘artist-centric’ royalties model in streaming last year, “The next focus of our strategy will be to grow the pie for all artists, by strengthening the artist-fan relationship through superfan experiences and products.”
Grainge said at the time that UMG is “already in advanced discussions with [its] platform partners regarding this phase and will have more to announce in the coming months”.
He added: “In addition, we will be building our in-house capabilities through groundbreaking partnerships that will accelerate our artists’ ability to create experiential, commerce and content offerings for their fans.”
The superfan segment of the market promises to be a lucrative revenue source for the major music companies.
US market monitor Luminate, in its Year End report for 2023 (published in January), revealed that 18% of US music listeners are superfans. This is up from 15% reported by Luminate for the first half of last year.
Luminate also reported that those superfans spend 68% more money on music each month and 76% more on physical music per month than the average U.S. music listener.
In Goldman Sachs’ latest Music In The Air report, it claimed that if 20% of paid streaming subscribers today could be categorized as ‘superfans’ and, furthermore, if these ‘superfans’ were willing to spend double what a non-superfan spends on digital music each year, it implies a $4.2 billion (currently untapped) annual revenue opportunity for the record industry
Music Business Worldwide
