The Quad: HYBE Label’s acquisitions cause concern about monopolies in global music market
(Nghi Nguyen/Daily Bruin)
By Alicia Park
May 4, 2023 5:05 p.m.
Pop artists Ariana Grande and Justin Bieber, rap artists Migos and Lil Baby and K-pop groups BTS and NewJeans all have one thing in common. As of this year, these artists and music groups are managed under one parent organization: HYBE Label.
According to Vox, HYBE Label, originally named BigHit Entertainment, was founded in 2005 and rose to popularity in the late 2010s with BTS taking over the global music scene. According to CNBC, BTS generates over $3.9 billion in economic value for the South Korean economy and holds more than 23 Guinness World Records, including the most viewed music video in 24 hours and the highest social media engagement for a music group.
Some Bruins have been able to contribute to the growth of K-pop in the United States through student organizations such as Koreos, a UCLA-based K-pop dance cover team with over 600 thousand subscribers and 100 million views on YouTube.
Eric Pan, a second-year business economics student and a member of Koreos, said he has seen the rise in K-pop’s popularity in the United States and the changing attitudes in the West.
“I’ve definitely seen it become more and more mainstream over time. For example, New Jeans came out with a new song OMG and Ditto and Hype Boy, and I think those have really blown up,” Pan said. “Some people who aren’t actually into K-pop enjoy those songs, so I think it’s definitely interesting to see.”
Pan added that while he believes the rise in K-pop’s international popularity was largely because of the addictive nature of the songs and the visually appealing music videos, the commercial aspects are clear.
K-pop companies such as HYBE Label have taken advantage of K-pop’s popularity and the resulting revenue to expand their business globally.
According to Reuters, HYBE America, a subsidiary of HYBE Label, acquired Ithaca Holdings – the music label home to Ariana Grande and Justin Bieber – for $1.05 billion in April 2022. In February, HYBE America announced a $300 million acquisition of Quality Control Media Holdings, the label behind major rap artists such as Migos, Lil Baby and City Girl, according to Billboard.
While HYBE is gaining more control in the global music industry, HYBE’s recent domestic activity also draws attention to the conflicts of growing a business of this size.
According to Yahoo, legal disputes arose in the past weeks as HYBE Level made a move to take over SM Entertainment, one of its rivals in the Korean music industry.
On Feb 22, HYBE Label acquired 14.8% of SM Entertainment’s total shares, becoming its rival company’s biggest shareholder, according to Yahoo. SM Entertainment released a statement accusing HYBE of a hostile takeover, spurring the second largest shareholder, Kakao Corporation, to start legal disputes with HYBE.
Additionally, SM Entertainment’s CFO released a video statement expressing concerns that HYBE’s moves would create a monopoly, harming the competitive market.
According to the Federal Trade Commission, a healthy democratic economy restricts the formation of monopolies in order to prevent one individual or institution from gaining too much control to promote the stable and fair growth of the economy.
With talks of HYBE Label’s monopolization of the Korean music market, according to sources such as The Korea Herald and Los Angeles Times, the potential implications on the American music market and K-pop fans remain unclear.
Key Kim, a bassist who records live sessions for K-pop artists touring in America, makes part of his living from K-pop’s global activity. Kim said while HYBE’s growing influence in the music industry and recent acquisitions may be political, they may create better access to resources musically.
“It’s more of a political issue. … Musically, I’m sure, it will impact the American pop music scene I think because they (HYBE) will definitely have more power,” Kim said. “They have better producers, songwriters they can hire because of that move.”
Kim added that he hopes HYBE’s business expansion will open him to more opportunities for career growth.
“My main job is working with the American music industry, but just being a Korean American, it’s more of an advantage for me,” Kim said.
Cedarbough Saeji, an assistant professor of Korean and East Asian Studies at Busan National University in Busan, South Korea, said economics is only one of many considerations, as artists’ well-being and artistic expression are critical to K-pop as more than just a business but a part of a country’s culture.
“I do worry about the treatment of idols in this system,” Saeji said. “It seems like it’s designed to make investors who want returns happy, as opposed to making artists and, ultimately, the future of K-pop a healthy and happy place.”
Pan said while his impression of HYBE has been positive, the industry as a whole lacks transparency which could cause concern among fans like himself.
“Only time will tell,” Pan said. “I think HYBE so far has been doing a pretty good job of managing their sub-labels and have a reputation of generally treating their artists well compared to other entertainment companies in K-pop, but I’m not too familiar with what goes on behind the scenes. I don’t think anyone really is.”