Big Hit Entertainment founder and co-CEO Bang Si-Hyuk may be best known in the music world for creating Korean boy band BTS in 2013, but his ambitions stretch far beyond building K-pop sensations. In addition to producing music and managing bands, Big Hit, which reported a revenue of profit of more than $52 million on sales of about $175 million in fiscal 2018, is pushing into technology.
Big Hit recently launched Weverse, an app for music fans to communicate with their favorite bands (and each other). It also operates Weply, an e-commerce platform currently specializing in band merchandise. Big Hit has said it aims to build a “music-business one-stop service.” Bang, who got his start as a composer and songwriter (and goes by the nickname “Hitman”), recently spoke with Fast Company about innovation in the entertainment industry and whether Big Hit aims to build a “super app”—a single app that houses many different services, popular in Asia—for the music business. Below are edited excerpts of the conversation; Bang’s remarks are translated from Korean.
Fast Company: You said in your last corporate briefing that you are looking to grow and expand. What are your plans?
Bang Si-Hyuk: The music industry is one-fourth or one-fifth of the entertainment industry. So why is that? I noticed that there must be some sort of a leakage in the value chain. There was something there that was not being captured, and I felt that [we] should be able to sustain [artists’] revenues. Their primary work is making music, and they need to be able to make a sustainable living. So we felt we needed to scale up the entire [Big Hit] business.
FC: Can you talk about how you are innovating in the industry?
Bang: I noticed that the problem is that we don’t really have concrete data on our customers. All of all the customer data was in the hands of the retailers. We did not have the customer patterns. How can we can innovate without the numbers to back it up? We launched [fan app] Weverse about two months ago, and we’ve already managed to accumulate to 2.5 million users. These are users that have agreed to provide their data for marketing purposes, and there are 800,000 daily hits on the site. These are significant numbers for an IP [intellectual property] company or an IP product. You don’t see this sort of growth in such a short time, and I’m sure that this growth is going to continue into 2020. And these are very enthusiastic, dedicated, and engaged customers.
We launched Weply earlier this year, but we already had traditional e-commerce and the shopping mall, [and] we customized it. [Weply] is important, because we noticed that our consumers outside of Korea were having a lot of difficulty accessing our existing e-commerce portal because it was not as efficient and it was not good enough. Globally, we saw a growth of about 45%. This is what we call the “fandom economy.” Our consumers are very passionate, and they’re very high spending. So the [goal], using this infrastructure, is to create an ecosystem that will involve these customers that leads to sales and then eventually toward an integration of both the [online] and offline experience. They’re going to the concerts as well as the online buying experience.
We can [be successful] by focusing on the content and creating and delivering the content that the users want. And then the fans will [engage in the content]; they’re a very loyal fan base. And that creates a virtuous cycle that leads to higher quality content as well as an increase in the fandom. People said this is foolhardy, and this is never going to work. [They look] at us and they say, “How were you able to achieve this without going through the system? Without going through the major labels in the United States?”
I don’t read a lot of books by business leaders or CEOs, but I recently read something by Jeff Bezos about this obsession with the customer. We have always focused on the content and the fan.
FC: Big Hit has described the combination of Weverse and Weply as the foundation for a “one-stop music service.” Is this the start of a “super app” for the music business, and can it go global?
Bang: No other app has both the community functions and the commerce function that Weverse and Weply have. The difference with the American music market is that the rights are distributed among many different entities. There are the record labels, the artists themselves, management companies. It’s very difficult for these rights to be gathered into one place. So creating something like Weverse or these apps will be very difficult in the United States. In the next two years, as you begin to collect more and more data, there will be other entities and other parties [that are going] to want to come into this ecosystem and enter into these apps. We already have other companies asking whether they can also become a part of this system and part of the app.
FC: What other functions would a fan would be looking for from a one-stop music business service?
Bang: The users and the fans come and share their experience and consume media through this sharing experience and liking each other’s content. The commerce component is not just selling the goods; the community function and the commerce function will continue to be very closely integrated. For example, the customer [could have the] ability to share their experience on their purchases. The two legs will be integrated. There will be various other online businesses that are confidential for now, but these sort of other businesses will be announced in the next year. [You might see] a currency or sort of a unified credit system that will be a part of the ecosystem and [more examples] of integrating the online and offline experience of the customer. We have a concert that’s coming up in Korea in October, and we’re planning to test many of the things that I mentioned. For example, a fan can order merchandise at home, or they can buy it on site, but through the Weply app, or they can preorder at home and then pick it up on site, and they’ll be able to do this on the app. They’ll be able to then do the same thing with a pop-up store and choose whatever purchasing option they would like.
FC: How has your background as a songwriter and musician helped you as a business leader?
Bang: Actually, I think the creative side was a bad influence on management because to be an effective creator, there needs to be sort of unilateral decision-making. We can’t really get good content through consensus. So actually in the beginning, when I began to manage the company, there were a lot of setbacks because initially I said, basically, I’m always right, and that did not lead to good management, and we experienced a series of failures.
I studied aesthetics [in college], which is sort of [like] philosophy, a discipline or study [where] we focus a lot on different views or perspectives, and I think that is why eventually I began to ask, “What is effective decision-making, and what is the vision?” I [gave] all the staff and the employees a very high level of autonomy and independence, so they can drive themselves. And this is what creates the foundation for the basis for an effective decision-making in an organization.
[But] it is still very important to be able to turn on the creative side, or turn it off and then focus on [business]. What I have done well is to create a sound management system. In our companies of today, we have very good managers and a very good management team. They can run the company when I concentrate on the creative side.