A Sagan Moment: BTS & Art

Earlier this week, Bang Shi Hyuk, held a corporate briefing in Seoul reporting profits up over 200% for the first half of the year (32.5m vs 53.3m in 2018–in comparison UMG reported $7.1b in 2018). The genius producer behind BTS at Big Hit Entertainment in South Korea also discussed the company’s upcoming moves in the digital market, new artist investments, developing partnerships, and infrastructure growth.

I admit, I am a huge BTS fan. For those of you who don’t know, BTS is a male Kpop group, which is a group made up of (usually) Korean artists who have trained as students for many years in singing, dancing, acting, and music. They are often prospected from a young age and spend their training years with a company, and then may be chosen for a debut or some other role within the industry. All is approached with a Korean attitude and aesthetic.

The success of BTS has a lot of companies in eastern Asia looking at Big Hit Entertainment. The US music market is the biggest in the world, with Japan coming in second, and most Kpop companies are focused on breaking into the Japanese market. With the success of BTS’s stadium tour in America this year, more companies across the global market will be looking at Bang Shi Hyuk’s announcements.

First, let me add a little about Bang PD-nim (loosely, Mr. Producer Bang). Before leaving to form Big Hit Entertainment in 2005, he worked for years with JYP Entertainment, (an industry leader), and composed many successful hits for artists. Now worth around $770 million with the success of BTS, Bang Shi Hyuk’s skills as a producer are well-established.

In America, we can see music companies brainstorming the same issues–the digital market, new artist cultivation, partnerships. With an American attitude and American aesthetic. Reading over the International Federation of the Phonographic Industry’s (IFPI) global music reports from 2018 and 2019, I see some interesting comparisons in how the “east and west” approach the issues of copyright infringement (YouTube, China), streaming income (paid subscriptions), and partnerships (across industries and countries).

Companies are deciding how to pursue new global standards for how to litigate copyright infringements, and how to control streamed content, to increase profits and return a portion into the “virtuous circle of investment”–finding and promoting new artists. With the amount of video streaming across the world every minute, and the new amount of talent accessible, the potential is incredible. Some comments in the IFPI report focus on copyright issues and how they translate globally because the variation across borders is bad, especially in China where copyright infringement laws are only beginning to take form.

Japan runs a very brisk copyright monitor, which I believe is part of why they have such a strong market. But as a BTS fan, I will tell you that part of the success is because there is mega, endless content ready and free to stream on YouTube. For example, besides concerts and music performances, you can watch videos of BTS just eating, or you can watch hour long videos of their seasonal excursions, as well as dance practices, behind-the-scenes compilations, individual vlogs by members and more. How does this compute with the need for copyright infringement?

I believe the key is in the streaming memberships. There is an upper pay level of Kpop fandom not available to American-type celebrities. In the Kpop industry, idols are “branded” in a way that can only be done with multi-faceted artists that have a foundation in not only music, but acting, dancing, and presenting. This branding is expressed in the fan products that are promoted for each group, the exclusive (and expensive) fan meets that are held, and the packaging of the physical albums, for example. Idols are multilayered with appeal. This creates a unique sales funnel that crushes all others–an influencer-based sales funnel of content about products, fashions, travel, food, and more. And like truckstops, there is a whole industry of fans producing content about BTS–filming reactions, making fan videos, translating, forming fanmeets, and marketing affiliates like Amino.

This branding is kind of in the same lane as MTv’s successful runs with expanding music stars into reality shows, like Run’s House. Today’s viewers like more transparent feed, matching more closely with everyday posters who put up a live vlog as they walk through WalMart, instead of a slow-moving, highly produced show. But as Big Hit grows in profits, they are able to invest more into their production. Part of their appeal has been the “from nobodies to legends” reputation that literally inspires YouTubers daily–also supporting the fan claims that BTS changes lives with their “love yourself” message. Will their branding continue to be as responsive and appealing?

Bang Shi Hyuk announced they are hosting a worldwide audition, partnering with the video game industry, the television industry, movie industry, and acquiring smaller labels. The new app game BTS World has produced $3m in profits since its release at the end of June 2019, and they are releasing a new television show soon. This doesn’t give credit to the number of fingers they have in the pie, though, including Armypedia, released in February, a worldwide fan-driven puzzle hunt, and a top-grossing theater movie Bring the Soul which surpassed their previous miniseries hit called Burn the Stage, exclusively available with a YouTube Red subscription.

BTS talks all the time about what they are capable of doing together as a group as opposed to what they can do individually. Bang PD-nim often refers to the group as “my boys” in private, and the family-feels saturate almost all of BTS’s content. The culture expects the young prospects to identify with their group, their company. In America, when most are talking about division, this is more than foreign, it’s almost magical. Yet, unlike in America, I know very little about the members’ families and personal relationships outside BTS, and there is a lack of drama.

Big Hit Entertainment took advantage of the responsiveness and accessibility of the digital marketplace to create a big “influencer,” a unique affiliate-type marketing structure, based on the developed talent of the seven BTS members. I heard a lot of reactors say things like, America needs to step up their game when seeing the high-level choreography, cinematography, and iconic fashion that Kpop revolves around. What people may not know is that Big Hit, originally a small and poor company, also used a form of government subsidies in Korea that are marked for companies trying to expand into the US market. As part of a response to the Korean Wave (Hallyu), and the popularity of artist’s like Psy (Gangnam Style), the Korean government created support to increase global entertainment market shares and drive tourism.

In America, our funding for the arts dropped drastically in 1996 and then took 15 years to return to the same level, and has remained slightly below the 1995 high since then. Arts funding in public schools continues to be an issue. In 2015 under Obama, the ESSA was passed to help restore and legitimize funding for arts in our public schools from 2017-2020. America, we need to step up our game. We need to invest in the arts–really invest in our cultural arts.

The talents of our citizens will power the new marketplace, and on the digital level, we are talking about influencers or branding across platforms. Being an engineer will still be a great job for a very small portion of the workforce. The vast majority of people, though, will find new market value for bringing a new visual, a limited quantity product, a unique voice, opinion or skill (such as esports) as their value in punching a time clock starts taking a back seat to repetitive motion robots. Take, for example, not only the number of vocal coaches selling services on YouTube, but the number of big money e-sports competitions, or the increasing number of boutiques on Shopify.

I don’t know what my kids will grow up and do any more than I suppose my parents knew what I would grow up and do. My mom recently told me that not only does she not really understand my posts about the digital marketplace, she could never have conceived the type of remote work I do online. Where do you think the music industry headed and what did you love about it before? Leave your comments below!


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