SEOUL (BLOOMBERG) - South Korean K-pop management agency Hybe, which last week announced a new blockchain business offering digital assets, is already contemplating expanding its marketplace for non-fungible tokens (NFTs) with celebrities beyond its stable of pop superstar acts.
The agency, which manages acts like K-pop group BTS and Canadian pop star Justin Bieber, said it will partner with Dunamu, which runs South Korea's largest crypto exchange, to create a new platform for the sale and trade of NFTs, starting with photo cards of Hybe artistes, including BTS members.
The venture will be based in the United States and may expand to include musical acts not managed by the company and potentially even athletes, Hybe said in an exclusive interview.
BTS photo cards are already a popular physical product that has fans of the boyband gathering at meetings to exchange and acquire new ones. The NFT layer would mark each digital card with a unique identifier, lending it scarcity in the virtual world. Sports trading cards have also boomed in popularity and value in recent years.
The new NFT business is expected to debut in the first half of next year. Its initial announcement and a related partnership with a metaverse company to create real-time media pushed Hybe's share price up 10 per cent last week. Much like PUBG video game creator maker Krafton, Hybe is working to expand across entertainment genres and formats, meeting its millions of fans wherever they are in the digital world.
"As we prepare to enter the NFT business in a sustainable manner, we will directly participate in the operation and implement fan-oriented policies," Hybe said in response to Bloomberg's questions.
Together with Dunamu, the two companies want to take a lead in the "popularisation of the global NFT market".
Hybe's push into the market for digital assets comes as the US music industry seeks new monetisation methods after taking a heavy hit from the Covid-19 pandemic, which forced musicians to cancel tours. The company will first utilise intellectual property it holds for its own artistes and those affiliated with Hybe America, before looking to expand its NFT ecosystem with participation from other global stars, including some from the world of sport.
The South Korean firm acquired music manager Scooter Braun's Ithaca Holdings for US$1.05 billion (S$1.42 billion) earlier this year and now manages singers like Ariana Grande and J Balvin through its US branch.
"Online concerts cannot completely replace offline ones and the two can co-exist. The NFT business is meant to gradually expand digitalised services and merchandise as we keep maintaining offline projects," Hybe said. "The main purpose is to offer more variety of experiences and activities to fans around the world."
Payment methods for buying and selling NFTs on the new platform have not been decided yet, Hybe said. Some BTS fans, whose social activism was on prominent display last year as they and other K-pop followers flooded social media with support for Black Lives Matter protests, have voiced concern over the agency's move into an energy-intensive business like blockchain technology. BTS itself has actively advocated climate protection and participated in United Nations campaigns around the cause.
"Dunamu has been constantly searching for diversified solutions for the eco-friendly operation of the NFT business," Dunamu said in a statement. "We are already reviewing technical measures and policies in the process of cooperating with Hybe."
Hybe, formerly known as Big Hit Entertainment, has been transforming itself from a K-pop management agency to a tech-first platform company. The firm created its own online fan community, called Weverse, in 2019.
Weverse's app has drawn 41 million downloads from 235 countries and now counts 6.4 million monthly active users. Weverse connected fans with artists during the pandemic, helping Hybe generate tens of millions of dollars from live-streamed concerts.
