HYBE signs official music distribution deal in China

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HYBE signs official music distribution deal in China

Published: 24 May. 2023, 19:20

HYBE's headquarters in Yongsan District, central Seoul [NEWS1]

K-pop powerhouse HYBE signed a music distribution deal with Tencent Music Entertainment this month bringing the music of its artists like BTS and Seventeen to Chinese streaming services with nearly 600 million monthly users.

HYBE artists such as BTS, Seventeen and Tomorrow X Together are sweeping China along with the rest of the world but failed to receive full profits from China because no Chinese platforms have signed official distribution contracts with the K-pop agency.

However, HYBE is turning the table around as it signed a deal with Tencent Music last week — which means HYBE artists’ music will be officially available in China through Tencent Music’s music streaming services such as QQ Music, KuGou, Kuwo and Wesing.

Spotify, another leading global music streaming platform, has 515 million monthly users based on data from first-quarter earnings.

Although HYBE’s music was streamed within China before the deal, the lack of a contract meant that profit made from music distribution was not fully reflected in the K-pop agency’s revenue.

HYBE’s yearly revenue made from China last year logged 1 percent of the total 1.7 trillion won ($1.3 billion), according to its annual quarterly earnings report in February. Revenue from Korea took up the largest share with 33 percent, followed by North America and Japan with 32 and 28 percent.

“As of now we cannot comment on the contract or when HYBE's music will be officially streamed in China,” a HYBE spokesperson said.

HYBE founder Bang Si-hyuk commented in March of a crisis impending upon the K-pop industry but noted sales growth from China at a forum hosted by the Kwanhun Club, an association consisting of senior Korean journalists.

Bang mentioned that numbers from China are going up despite China’s restriction on Korean culture and products in retaliation against the country’s deployment of the Terminal High Altitude Area Defense system in 2016.

The Chinese company already has formed strategic partnerships with other domestic K-pop agencies SM Entertainment, YG Entertainment and JYP Entertainment for music distribution and marketing.

HYBE’s news arrives amidst a time when China was on the precipice of reopening its borders as the Covid-19 pandemic dwindles down and a large portion of the K-pop agencies’ profit is expected to derive from fandom in China.

“Due to the lifting of travel restrictions between Korea and China in March, China’s K-pop fans are back in Korea,” said analyst Lee Hwa-jeong of NH Investment & Securities. “Profitable earnings are expected from K-pop agencies who have artists with strong fandom in China, such as HYBE’s Seventeen, JYP Entertainment’s Stray Kids and YG Entertainment’s Blackpink as they are scheduled to host world tours [including China] in the latter half of this year.”

Lee noted a surge of Chinese tourists in K-pop artists’ pop-up stores and more than half of first-week CD sales for artists IVE, Blackpink, Stray Kids, Seventeen and aespa this year derived from China.

Still others hold a more cautious outlook for the Chinese market due to regulatory uncertainties since the Chinese government often leverages its oversight power to ban or regulate certain content for political reasons.

Korea’s largest portal Naver, for instance, has recently been blocked in China, following the end of the Group of 7 meeting led by the United States.

Foreign Minister Park Jin said Wednesday that it will closely communicate with the Chinese government to resolve the issue.

Singer and actor Jung Yong-hwa’s appearance on a Chinese variety show was reported to be canceled on Wednesday.

Chinese media outlet Xinjing News reported on May 10 that Jung was scheduled to appear in a new audition program on China’s streaming service iQIYI.

Jung was spotted arriving in Beijing on May 17. However, Beijing Radio and Television Station reported on Wednesday that “the news that Jung Yong-hwa will be filming a variety show in Beijing is not true," and that "the program in question will not use Jung Yong-hwa as a guest in the future.”

With news from Naver and Jung, shares of K-pop agencies are slipping. HYBE’s shares fell 2 percent to close at 267,500 won on Wednesday. JYP Entertainment’s shares fell 1.9 percent to 113,500 won and YG Entertainment’s shares slightly dipped 0.22 percent to 92,600 won.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]