- European IOC and American MLB, can the two coexist in the Korean Wave?
- Bang Si-hyuk's "It's Fate"
There is one slogan advocated by Big Hit Entertainment (hereinafter Big Hit); "Music & Artist for Healing." The mission is to externally "give people comfort and emotion through music and artists," so the related business and innovation initiatives are all focused on the mission. Today, it's no wonder that music isn't just about listening. So there is also an aspiration to contain everything that is involved.
Accordingly, selection and concentration are focused on the core competencies, which are two characters: an artist who presents content and a fan who actively interacts and grows. Here, Big Hit focuses most on training and refreshing artists who need to show content that fits the eyes of fans consistently. Besides, Big Hit takes on the role of seizing various business opportunities through interaction with fans and making them permanent.
Since the goal is clear, the business is divided into two types: the labeling division responsible for music production and artist management, and the various business divisions. The two have very different forms of orientation, but fortunately, there are historically suitable examples of the two. Probably the field with the oldest tradition like music. Sports.
■ Like IOC, aiming for a structure that shares the same value
|▲ Business Structure of Big Hit Entertainment|
Big Hit is the parent of Big Hit. A name that represents the entire label, Big Hit, is also a company that was founded in 2005 by Bang Si-hyuk. The company's successful case is BTS, and the group currently working on is TXT (Tomorrow X Together). As it is a label that holds BTS, which has been the most successful in the entertainment industry in Korean history, it seems to be responsible for both corporate disclosure and investment promotion. For this reason, maintaining the performance of the current level and achieving the military requirements of BTS members are considered as the most significant challenges.
Source Music is an entertainment established by the current CEO So Sung-jin in 2009, and the girl group 'GFriend' is its representative artist. The company was acquired by Big Hit on July 29, 2019, and settled as an affiliate label. It has a history of collaborating its girl group 'GLAM' with Big Hit in the past, and it is believed that the acquisition was based on the relationship at the time. 'GFriend,' which has established its unique position among the Korean girl groups, is the most successful case, but there is also a limitation that there are no other successful cases. That's why Big Hit is also trying to attract female artists to Source Music. Depending on the business situation, there are many concerns about the independent development of the female artist market by other labels. This is probably due to the precedent, 'GLAM,' making the public think like that.
Belift, introduced in the portfolio, stands for 'Belift Lab', which was founded in collaboration with CJ E&M (hereafter CJ) on March 11, 2019. It is known as a blueprint that Big Hit plays the role of a planner externally, and CJ takes over the growth support system based on the broadcasting network. Given the network that CJ has established in Southeast Asia, debuts and activities of members who are not Korean citizens are most expected. As for foreign members, since cases of success and failure are apparent, there are questions about countermeasures and positive cases. Eventually, the timing at which business performance appears superficially seems to define their existence.
|▲ IOC shows the most typical management that encompasses independent characters.|
The main tasks of Big Hit are to create synergies between the labels and to prevent collisions and clear traffic in the process of pursuing each other's performance. The most similar example of this is the International Olympic Committee (IOC). It is an entity that conducts business internationally, encompassing countries and stocks that generally exist independently of each other. Even though it is a commercial activity organized by the private sector, it is also a position where it is treated as a state equivalent. And this means a lot.
Considering the identity of the members, the affiliated labels, including Big Hit, have a lot of side effects to operate in a general parent-subsidiary relationship. Although it might be understood as a hierarchical order in a private company, it is highly probable that defining numbers such as sound source downloads and operating profits as performance will result in a decrease in morale and a lack of motivation for members. The entertainment shouldn't be dealing with artists in the usual way, "you just need to be strong." For this reason, it is safe to classify into differences that cannot be changed, such as gender and nationality, and to be fully equipped with a system that exists independently and respects each other.
When it comes to running a business, it is no wonder that the revenue source, which is the most important, should be predictable and stable. Given the inter-label relationship and future scalability, how similar it is to a traditional structure like the IOC is critical from an outsider's point of view. Of course, the IOC itself is not a problem, as it is known through the news. However, since these shortcomings are standardized, Big Hit is required to overcome with innovation and performance as a chairman.
■ Like MLB, aiming for organic growth of business
|▲ Businesses based on music have been formalized for a long time. Therefore, synergy inside and outside the label becomes the core competency of the business unit.|
Big Hit's business division is introduced as the role of four individual companies. Basically, it has the role of accelerating the business competency created by the label, so the business item is in a form that encompasses areas known to have sales. And this is an actual working group.
'Big Hit Three Sixty (360)' is an organization dedicated to performances such as concerts and fan meetings. The number '360', which is often used in concert brands such as U2 and game consoles, is also a business term for omnidirectional responses on a flat surface, so it is regarded as the place to take on the most additional tasks. Of course, they also take care of the production of content from activities other than music, so it seems to have the most work.
'Big Hit IP' is a player whose name is bandied around, especially in the BTS's character goods business, which is always out of stock. The main business is to plan and manufacture products on its own and to manage collaboration with external partners. It is also in charge of identity-oriented businesses that utilize offline spaces such as pop-up stores.
'beNX' is an entertainment platform company established in 2018. Its main business is 'Weverse,' a fan community platform, and 'Weverse Shop,' a commerce platform. In the situation where the know-how of interacting with fans, which is considered the key to the success of BTS, is evaluated as the real ability of Big Hit, it takes on the role of commercializing that part in the same industry. In terms of domestic standards, there is a double-sidedness that seems to be like a portal cafe, but at the same time, it seems to be aiming for media commerce abroad. Thanks to the direction that has the most attention in terms of growth, it is often mentioned that if more success cases are made, beNX will come out independently in the future.
'Superb' is a music game company established in 2016 to develop music games and related business models. Perhaps the most representative game related to Big Hit is Netmarble's 'BTS WORLD', which started service in June 2019. This is an example made with external corporate capabilities and should be viewed as the parent's license business. Because of this, even though it is a business of Big Hit, there have been no successful cases related to artists. In terms of business diversification, it is regarded as a rhythmic game with few investments, rather than a newcomer debut.
|▲ The most American sports "baseball" can be seen as the ideal model for coordinating businesses.|
Do you want to understand the Big Hit business? Let's look at the category menu of the desktop version of the MLB official website. This is the most intuitive. The top left corner of the MLB homepage lists the core and derivative products in the order of popularity, centered on baseball sports operated in reality. But the more you go to the right side of the screen, the more it is 'fantasy'. Some of the sub-menus make us wonder if they have anything to do with business. This case can be defined in terms of fans and workers. In many ways, it overlaps with the introduction of the big hit business division.
The MLB Secretariat is a place that typically demonstrates the stable operation of existing businesses and the selection and concentration in crises. Based on the organic linkage of all factors, it maximizes profitability and promotes long-term fandom growth. Even looking at its history, including the creation of two leagues, the establishment of a farm system from triple A to single A, and the success of the World Series, it suggests the way Big Hit should go.
Currently, the core business of the label is music production and publishing, visual creative, performance directing, rookie development, artist management, etc. In terms of the actual entertainment business, there should be no mistakes. However, the reality is that it is extremely demanding in terms of risk management. As a result, it is well pointed out that the business is exposed to excessive tension and stress. In particular, there are many opinions that if you focus too much on the business side, you will be vulnerable to an unexpected situation. Therefore, in the process of overcoming this, it can be said that it is meaningful to review the history of MLB.
■ Like a sports business. Whether creating an international value chain is key.
IOC might be the one which made the most accomplished achievements in the pursuit of the common good by collecting artists ("events") with strong personality and establishing labels ("country"). At the same time, MLB is also the most prominent existence to create organic links by bundling highly volatile businesses. Each can be classified as European or American, but that the convergence between the two is the way for the Korean Wave to advance has many aspects to empathize with.
The path for both Big Hit and affiliates, centered on CEO Bang Si-hyuk, is a way that no one has ever taken, even looking back on the history of Korean entertainment. That is not even the case done by Japan or China. Even though the entertainment business earned money internationally due to internal limitations, it did not exceed the local threshold in terms of industry. Big Hit, which got the success of BTS, is also now at the level of whether to open the door or not.
It is why the history of the sports business and its lessons are more important. The bright and dark history of IOC and MLB. Big Hit and CEO Bang Si-hyuk have clear reasons to pay attention to both.