In many ways, the band had never gone higher before their annual “Festa”. In just two months, they’ve performed for over 200,000 people in Las Vegas, toured the White House in their best black tie, and released an album, “Proof,” commemorating the megahits who accumulated tens of billions of dollars. views and made their backers fortunes.
For more than half an hour, the pop stars ate, drank, joked and reminisced around a table framed by dozens of purple balloons. After being teased for looking sleepy, J-Hope, the versatile rapper, dancer and vocalist of the band who just days earlier had made history by being named the headliner of Chicago’s Lollapalooza Festival, launched the bomb: all seven go solo.
The BTS Army, the group’s huge fanbase, saw the hiatus as the end of an era. And with it, the fortune of Bang Si-hyuk, the South Korean billionaire behind the boy band that took the world by storm.
Bang Si-hyuk, founder of Hybe Co., formerly Big Hit Entertainment Co., poses during the company’s listing ceremony at the Korea Exchange. Photographer: SeongJoon Cho/Bloomberg
Shares of Bang-founded Hybe Co. plummeted 25% in a single day last week after BTS announced, extending the company’s months-long slump and slashing Bang’s fortune by $2.6 billion. dollars since peaking in November at $1.2 billion, according to Bloomberg Billionaires. Index. The title hit an all-time high on Wednesday, even though BTS promised to reunite one day.
“Hybe is the house that BTS built,” said Jeff Benjamin, a widely followed journalist who covers K-Pop. “When there’s a change of artist or flagship, people are going to worry even though it might not be that different.”
Bang, who controls 31.8% of Hybe, founded the company in 2005 after a career as a music producer. In its early years, the company nearly went bankrupt before getting its first hit with local band 8Eight’s “Without a Heart” in 2009. BTS released its debut album in 2013.
He became an unlikely billionaire after the company’s 2020 IPO, by which time BTS had already teamed up with Halsey, Nicki Minaj and Steve Aoki, appeared on “The Tonight Show Starring Jimmy Fallon” and “Saturday Night Live,” and had fans camp out for days before a free concert in New York’s Central Park for “Good Morning America.”
The IPO also gave the band members, all in their twenties, stakes worth millions of dollars.
BTS and the wider industry have thrived during the Covid-19 shutdowns thanks to online videos, streaming services and album sales. Once the pandemic subsided, the mania got even bigger. Recent shows in Las Vegas have drawn fans from around the world for four live concerts. ARMY members who pay a fee to gain exclusive access to presales, special merchandise, content and more purchased all tickets before they went on sale to the general public. Desperate fans shelled out up to $15,145 for prime resale market tickets, while attendees loaded up on themed hats, t-shirts and glow sticks, known as army bomb.
Hybe’s revenue jumped 58% to nearly 1.3 trillion won ($1 billion) last year, with nearly 70% of its operating profit coming from the label that runs BTS, according to Meritz. Securities Co. Shares have more than tripled since listing in 2020 thanks to a peak in November.
Hybe’s addiction to BTS has always been a concern. The company tried to diversify, adding new artists and entering different areas of business. It partnered with the operator of South Korea’s largest crypto exchange to sell non-fungible tokens and bought Ithaca Holdings, an American media company behind stars such as Justin Bieber and Ariana Grande. Last year’s merger gave both artists shares of Hybe worth millions.
Although it’s still too early to see the success of these new ventures, BTS’ hiatus is still a blow. SK Securities Co. cut its operating profit estimate for Hybe by 9% to 234.9 billion won for 2022 and by 24% to 273.2 billion won for 2023. Analyst Hyo-ji Nam said that the projections could increase when the BTS members’ individual projects kick off.
A representative for Hybe did not respond to requests for comment.
Even though the band reformed, concerns remained about Hybe’s future, as the artists remained subject to approximately two years of military service. Shares of the company are down 60% this year, far more than those of agencies JYP Entertainment Corp., SM Entertainment Co. and YG Entertainment Inc.
“It’s not about how they’re going to reduce their reliance on BTS,” Hyundai Motor Securities Co. analyst Hyunyong Kim said of Hybe, adding that the two are too connected to be separated. “It’s a question of how well they will deal with the potential risks arising from the issue of military service.”