HYBE, the company behind BTS and Seventeen, just launched a labeling service in the U.S.

last week, moveThe South Korea-based music company behind superstars BTS and SEVENTEEN is relaunching.

company launched Mobile 2.0new global strategy under new CEO Jason is in Shang Li, who is succeeding Zhiyuan gardenhas served as CEO of HYBE for the past three years.

One of the most surprising plans is hidden in the detailed ruins of the new structure.

move revealed that it is entering one of the most competitive (and lucrative) areas of modern music: distributing and servicing independent artists.

HYBE, produced US$1.66 billion Last year, the company launched a new label services business with a focus on the United States. It will operate under the company’s U.S. unit Moving Americacontinues to be led by CEO scooter Braun.

In a letter to shareholders last week, signed by HYBE’s new CEO Jason Jaesang Lee and former C.E.O. Park Ji-won, (referred to as HYBE Representative Director in the description), the company confirmed that the new Label Services division will provide “a comprehensive range of services for labels and artists,” including distribution, marketing and promotion.

The company’s entry into record label services comes amid growing M&A interest in businesses focused on providing such services to labels and independent artists.

Warner Music GroupFor example, it was confirmed in March that it was considering a bid for the Paris-based digital music company believea key global player in this world. WMG It then announced its decision not to pursue a takeover bid for the company. WMG didHowever, recent acquisitions of stakes in Brazilian publishers and music platforms your music.

elsewhere, downtown music holdingsanother large player in the services sector – with annual revenue of approx. US$900 million It has reportedly been in discussions with private equity firms and at least one major music company about a potential sale.

Growing interest in the independent distribution and services space coincides with the rise of a “middle class” of independent artists who, according to recent Luminate statistics, are eating into major streaming markets.

HYBE’s The new CEO told the company’s investors last week that the company “is seeing a growing need for change in the traditional business structure of the U.S. market due to its fragmented nature, complex contractual relationships and the streamlined care of individual artists by major record labels.”

“In addition, segmentation of consumer preferences and increased efficiencies brought about by technological advancements are driving the growing need for change,” he added.

In order to cope with these changes, HYBE’s The CEO continued that the company plans to “develop a business model that leverages HYBE’s strengths to support the growth of artists.”

He added that the label services arm “will go beyond simple recording or management contracts with local artists to provide comprehensive services to innovate the market.” It will also “combine traditional American management practices with HYBE’s 360-degree business model. “

“We are seeing a growing need to change traditional business structures due to the fragmentation of the U.S. market, complex contractual relationships and the simplified care of individual artists by major record labels.”

Jason Jaesang Lee, HYBE

HYBE’s The CEO also said the new unit will benefit HYBE’s artists South Korea, Japanand Latin America.

Lee added, “With HYBE’s in-house label services, the work of these artists entering the United States is expected to become more efficient.”

Last week’s announcement about HYBE 2.0 included an extra element that made the tag service announcement even more interesting.

The company confirmed it has been “exploring new business opportunities” and plans to make “prudent investments” in various areas.

Highlighted areas move Sources of potential investment targets include generating artificial intelligence, audio/voice technology, games, “online and offline integrated experiences” and “original story business (OSB)”.

Although HYBE has not specifically stated that it plans to invest in a distribution and services company, in the coming months it hopes to expand and compete with other players in the services industry. What is stopping it from doing so?

Elsewhere in the U.S. market, HYBE’s The new chief executive noted last week that his performance move USA Label Division of Inc., big machine Label group and quality control media holding or quality control“has been growing steadily.”

scooter Braun In February 2023, he led HYBE’s acquisition of Atlanta rap giant QC.

Meanwhile, BMLG is a long-established country music label that HYBE acquired in April 2021 when it acquired Braun’s Ithaca Holdings for $1.05 billion.

HYBE noted last week that “both brands have solid catalogs,” which BMLG and quality control musical Streaming media revenue accounts for approximately 50% HYBE’s total streaming revenue in 2023.

“As a result, we expect the U.S. label business to continue its solid growth through the continued expansion of activity by existing artists and the recruitment and development of new artists.” CEO Jason Jaesang Lee in a letter to shareholders last week.

Elsewhere at HYBE, as part of the new HYBE 2.0 structure, the company will restructure its existing three business “pillars”, which previously included labels, solutions and platforms, into Future growth plans driven by music, platforms and technology.

HYBE has also established a new division called HYBE Music Group Asia Pacificoversees all of the company’s music label operations in South Korea and Japan.

At the same time, the new strategy also allows HYBE to double down on the super fan business with its global business. Weavers platform, by adding new subscriptions and ads to the app.global music business