Rei is a 44-year-old former teacher and stay-at-home mom. She is a huge fan of BTS, the seven-member group that has become the face of K-pop. She traveled abroad to see them in concert. And she’s even a member of ARMY, the official BTS fan club.
She is also one of many fans who are considering taking a financial stake in BTS, when the Big Hit Entertainment group’s agency officially opens on October 15. It will only be one part, and it is less about investing than feeling closer to the group.
“Sure, I don’t sell once I have one. It is for eternity. I want to show my heart by having this stock, ”she said.
When Big Hit debuts on the Korea Stock Exchange, it will be one of the country’s most anticipated initial public offerings (IPOs) of the year. Investors and fans alike will be looking for a track from K-Pop’s most popular, highest-grossing group. And it’s a rare example of pop fandom transforming into participatory capitalism.
‘You can share every moment’
BTS isn’t the only K-Pop group to feature precision choreography, sleek videos, and a seemingly endless supply of pop earworms. But they have a rare talent for connecting with fans.
While some might dismiss the fresh-faced boy group as teenage girls, their older fans disagree. Kim Young-mi is a 59-year-old teacher who teaches painting and even occasionally dedicates a BTS scene to canvas. She loves their recent single Dynamite, an upbeat disco track.
“Oh how much I enjoyed Dynamite. The nightclub! The nightclub is my generation! BTS is a magician who makes time pass both ways,” she says. She would also like to buy stocks, but is not sure she can afford it.
Above all, she loves their willingness to engage with fans: “BTS communicates endlessly with their fans all over the world, little daily details of their daily lives, their creative process, their accomplishments. You can share every moment with them. ”
This ability to connect could be their greatest asset, says Prof Suk-Young Kim, director of UCLA’s Center for Performance Studies and author of a book on K-Pop: “K-Pop Idols are very good at making their fans feel like they know you.
“A wider fan feedback is immediately reflected in their performance, from the fashion choices to what they say on stage. So in a way, they listen to the fans, they reflect that in their performance, and there is the thrill of this exchange. “
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For fans who are already so emotionally invested, the idea of investing financially may not seem like a huge leap forward.
Does this translate?
Korean investors will be the first to be able to buy Big Hit. But American fans are also interested. And given BTS’s current popularity, it’s not hard to see why. To top the US charts is a rare feat for any band that doesn’t typically sing in English. Only 20 predominantly non-English songs have ever made it to the top ten in its 60-year history.
Three of them are BTS tracks, and now they’ve finally had a number one single (although it was sung in English). American fans have responded en masse to BTS’s contagious, dancing pop – and their willingness to seriously engage on issues affecting their fans.
“BTS always emphasizes the importance of kindness and compassion and talks about the same experiences, fears and dreams that we all have at some point in our lives. It brings so many fans, like me, a sense of comfort and ownership, ”says Michelle Gutierrez, a 26-year-old student from Texas, who hopes to invest when the shares become available in the United States.
Big Hit’s listing has generated great interest from investors. About 20% of its shares have been offered to investors, raising $ 822 million – and valuing the company at over $ 4 billion. Big Hit CEO Bang Si-hyuk, who owns 43% of the company, is on his way to becoming an instant billionaire.
The seven members of BTS will each receive 68,385 shares, which will make them all very rich, even though they are already making a lot of money. According to Forbes, they made $ 50 million last year, with their road show grossing $ 170 million.
But by some measures, their contribution to South Korea’s economy is much greater. A recent study by the Ministry of Tourism and a government tourism institute calculated that their Dynamite alone would generate $ 2.4 billion in economic activity and nearly 8,000 new jobs – from not only direct sales, but also sales of cosmetics as well as food and drink.
The appeal to investors is simple: BTS are a global pop music juggernaut, and they have the potential to generate returns. Dynamite was so popular that it was the very first video to score 100 million views on YouTube in 24 hours. Album sales are strong even in the age of digital streaming. The live shows sell out in minutes, and BTS has amassed a slew of brand partnerships, ranging from cars to cosmetics.
It is rare, however, that fans are given the opportunity to purchase a specific musical act. David Bowie issued “Bowie Bonds” in 1997, which gave investors a reduction in royalties from his catalog. But even then, they were bought for $ 55 million by Prudential Financial rather than being offered to regular fans.
Most often, investors buy into companies that own the publishing rights to a stable of musicians. In the case of Big Hit, 88% of its revenue came from BTS in the first half of this year. Investors and fans therefore see an investment in one as an investment in the other.
It gave some fans a break. At 23, Tina Lamoreux is a veteran of the K-Pop fandom. She’s been listening to it since 2012, even before BTS formed and when fans in her home state of Oklahoma “were generally left out or considered weird.” Even though K-Pop is now hugely popular, she worries that the sometimes fickle nature of fame may be a risky investment.
“Especially in the music industry, artists can lose their fame and get ‘canceled’ so easily I would think it would be a risk,” she says.
Others disagree. MIRAE Asset Daewoo analyst Park Jeong-yeob says the group has shown resilience in the US market.
“Unlike past examples where Korean songs were propelled to success by a short-term buzz, BTS’s success is based on the long-term development of a global fan base.”
But it also poses a dilemma, as there is doubt about BTS’s future. By law, all able-bodied Korean men between the ages of 18 and 28 must serve in the country’s military for 20 months.
The seven members will have to register in the coming years. Finding a way to divide their military service might not help either.
“BTS is not BTS if it loses one. Seven should stay intact together,” says Rei, who nevertheless believes BTS should not be exempted.
But Professor Suk-Young Kim says the IPO could help Big Hit diversify its portfolio. And in fact, in the past 18 months, the company has bought two more labels. Some fans, however, believe that a brief hiatus won’t dampen enthusiasm for BTS anyway.
“Real ARMYs like me will never forget BTS just because they don’t show up for a few years,” Rei says.