Universal Music acquires 10-year distribution rights to HYBE music

The world’s largest music company Universal Music Group (UMG) has struck an exclusive deal to distribute music from HYBE Co., the South Korean entertainment giant behind global sensation BTS and other K-pop star artists, for the next decade.

The deal will give HYBE’s artists and labels access to UMG’s worldwide network for music distribution, promotion and marketing, and allow UMG’s artists to use HYBE’s global superfan platform Weverse to broaden their fandom, HYBE announced on Tuesday.

The partnership should boost HYBE’s global conquest plans, music industry experts said.

"UMG is an iconic music company and together with HYBE, the potential is endless,” said HYBE Chairman Bang Si-Hyuk. “We are certain that this (deal) will expand our global footprint while benefiting our fans, artists, and labels."

Sir Lucian Grainge, Chairman and CEO of Universal Music Group, also said, “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.”

HYBE shares ended up 6.9% at 224,000 won ($165.99) on Wednesday, outperforming the broad Kospi market's 0.7% loss.

HYBE EYES BIGGER PIE IN THE GLOBAL MUSIC INDUSTRY

The latest deal is an extended partnership of the two companies, which have been collaborating since 2017 when UMG signed a deal to distribute BTS music in Japan.

In 2021, the Korean and American music powerhouses deepened their ties to work together on multiple global projects by setting up a joint venture between HYBE and Geffen Records under UMG.

The JV launched The Debut: Dream Academy, a worldwide audition to discover new artists to train them under HYBE’s K-pop artist training system. Six trainees were picked as members of a new girl group called Katseye, due to debut later this year.

HYBE runs offices in Korea, Japan, the US and Mexico. Scooter Braun has been heading HYBE America, a wholly owned US subsidiary of HYBE, since the Korean parent acquired Ithaca Holdings, the US-based integrated media company behind many global stars.

The Korean entertainment giant controls multiple labels including BIGHIT MUSIC, BELIFT LAB, SOURCE MUSIC, PLEDIS Entertainment, KOZ ENTERTAINMENT, ADOR, HYBE LABELS JAPAN, NAECO, while HYBE America also manages its affiliate labels, including Big Machine Label Group and Quality Control.

Last year, HYBE reported the best-ever annual revenue, 2.18 trillion won ($1.6 billion) on a consolidated basis, for a Korean entertainment company thanks to brisk sales of music albums and performances despite the absence of BTS.

Its operating profit for 2023 rose 24.9% on-year to reach 295.8 billion won, and net profit skyrocketed 288.5% to 186.6 billion won.

BTS successors like boyband Tomorrow X Together and girl group NewJeans reached No. 1 on the Billboard 200 list last year.

HYBE also enjoyed a growth in revenue on the stellar global performance of other artists – boyband Seventeen’s world tour, Enhypen’s Japan tour, and girl group Le Sserafim’s first world tour.

The HYBE-UMG deal, however, excludes HYBE music distribution and marketing in Korea, China and Japan, as well as on social media such as TikTok and YouTube.  

Write to Da Eun Choi at max@hankyung.com
Sookyung Seo edited this article.