Naver, Big Hit, YG join forces to conquer K-pop fan community market

The K-pop fan community scene is set to heat up even further as South Korea platform giant Naver Corp. joins forces with BTS label Big Hit Entertainment Co. to spearhead the global online fandom market.

On Jan. 27, Naver held a board meeting to finalize its decision to invest in Big Hit. The Korean platform company will invest 411.9 billion won ($368.2 million) to acquire a 49% stake in BeNX, a Big Hit subsidiary that manages the K-pop online fan community platform Weverse. Naver will become the second-biggest shareholder following the deal.

Naver and Big Hit had been competing over the past few years for the lead position in the K-pop fan community platform market, which has shown consistent growth.

But instead of continuing their rivalry, the two companies have decided to form an alliance by combining their fan community platforms.

In 2019, Naver rolled out a new revenue model, V Live Fanship, a fan community platform by which celebrities create personalized membership programs for their fans based on big data.

Big Hit made a handsome profit from the V Live Fanship platform by offering various paid services such as streamed concerts and early bird ticket sales. Eventually, the company launched its own version of the platform, Weverse.

As BTS relocated to Weverse, Big Hit acquired a few entertainment companies to increase its content offerings on the platform, alongside featuring artists not under its label.

The synergy between the two companies' fan community is highly anticipated, given that Naver's V Live reached over 100 million downloads and 30 million monthly active users as of last month, with Weverse posting 17 million downloads and 4.7 million users.

The integration process is expected to take a year. Big Hit will head up integration and Naver will provide technical support. Together, the two platforms are set to create a K-pop fan community platform behemoth.

“We want to cultivate fandom culture, which got its foothold from Big Hit and K-pop, to spread beyond Asia and North America to Europe and Latin America as we aim to take it mainstream," said Han Seong-sook, the chief executive at Naver.

The online fan community platform market has seen explosive growth in the wake of the COVID-19 pandemic, which has made it nearly impossible for fans to engage in offline activities.

As of May 2020, Naver’s V Live Fanship saw its paid monthly content grow fivefold compared to the first couple of months of the year -- before the coronavirus outbreak -- while the value of content transactions increased by 25 times in the same period.

Between July 2019 and June 2020, V Live users in Europe and Africa increased  threefold from 2016. Big Hit’s Weverse also saw a hike in revenue, as it pulled in around 1 million viewers from 191 countries with estimated ticket sales reaching 49.1 billion won last year for the online BTS concert Map of the Soul ON:E.

FROM FIERCE RIVALRY TO ALLIANCE

Meanwhile, YG Entertainment, the label behind Blackpink, will also join the Naver-Big Hit alliance. On Jan. 27, Big Hit announced plans to co-invest a total of 70 billion won ($62.6 million) in YG Plus, a subsidiary of YG Entertainment, with BeNX to acquire a combined 17.9% stake.

YG Entertainment artists, including iKON and AKMU, will feature in the K-pop content service set to be launched by Naver and Big Hit. 

Over the past few years, Naver has actively established partnerships with major entertainment labels in Korea, including SM Entertainment and YG Entertainment, the labels behind Red Velvet, NCT, EXO and Big Bang, among others. 

Partnerships with major Korean entertainment companies have given Naver access to a robust K-pop intellectual property portfolio. Earlier in 2017, Naver also invested 100 billion won in YG Entertainment and became its second-biggest shareholder.

Write to Joo-wan Kim and Soo-young Seong at kjwan@hankyung.com
Danbee Lee edited this article.