Bang Si-hyuk, founder and chairman of K-pop powerhouse Hybe spoke at an exclusive forum held by the Kwanhun Club, a club for senior journalists on March 15, 2023. Here's the English transcript of his speech read to you (semi-ASMR style) by yours truly.

Hit Man Bang opened up about how he found his way into the entertainment industry and found his calling. At the same time he delves into the strategy behind Hybe's global expansion plans and emphasizes why it's not the time for K-pop to be resting on its laurels.

[Full Text of Speech]

Hello, I am Bang Si-Hyuk, Chairman of HYBE. Gwanhun Forum is a place for experts in a particular field to discuss important societal topics. I was told that this event is more meaningful as it is the first event to discuss pop culture at Gwanhun Club, and the first forum in more than two years. I am very grateful to the Kwanhoon Club for inviting me to this meaningful event and for choosing K-pop as the first topic.

As part of the music industry, I would like to share my thoughts on how I feel to be on the front lines of the industry.

While I came to hold the microphone at this event representing K-pop, I simply became a music producer based on my love for music. I never imagined I would start a business myself. In fact, even a year before starting my own business, I even made a public declaration to my boss and closest friend, Park Jin-young, that I would never start a business under any circumstances.

However, here I am, having founded BIG HIT ENTERTAINMENT, the predecessor of HYBE, and celebrating my 18th year in the industry. Now, I am the Chairman of the entertainment company with the highest market capitalization in Korea. Life is truly ironic.

Recently, there has been another event that I feel is an irony of life. I wanted to pursue music for a long time, but being a producer is essentially a freelance job, which means it's not a career that I can keep doing for the rest of my life just because I want to. So, I started a company with a somewhat impure motive of "creating a company that can employ me even as I age."

However, while running the company, I realized that if HYBE were to be a sustainable company, it should be standing strong without myself included in the picture. So these days, whether it's five or ten years from now, I'm putting a lot of effort into preparing for "what comes after Bang Si-Hyuk" - someone who can take over my role in the company. Nurturing many producers and creators within the company and building a multi-label structure are the results of such concerns. Ultimately, it's ironic that in a company that I started because I wanted to pursue music for a long time, I'm now thinking about a system where I don't even have to produce music.

But life is a wonder because it is full of these ironies.

Looking back now, when I was a young producer, I was narrow-minded. However, through running the company, I learned that as a leader, it is important to listen to people's stories and sometimes bend my own will and take a step backward. The business that started with simple and impure motives has made me a better human being who knows how to laugh and care for others. Business is an amazing area that made me look at life positively.

Another amazing area is "K." I remember saying this in one of the interviews in the past, but I wasn't someone who thought deeply about the meaning of "country" before. As artists like BTS receive love from around the world, a grateful feat, and I expand my business to the global market, I started to reconsider the meaning of "K" in "K-pop." Now, I believe I should have a sense of responsibility and mission regarding this letter. It is amazing to say that the values and philosophies of one person, which are not easily changed after becoming an adult, have changed to this extent.

Having a sense of mission in my work, I have been thinking about how to expand the boundaries of current K-pop and K-content and how to further increase the potential and influence of the music industry. Although no one has entrusted me with this responsibility, I think this is a task that I, as a leader in the industry, must think about and tackle myself. I hope that by sharing these concerns, today's event can foster a constructive discussion about K-pop and the future of the music industry.

[Current State of K-pop and Agendas to Consider for the "NEXT"]

First, I would like to discuss the current state of K-pop as I perceive it. K-pop is clearly considered a "craze" all over the world at the moment. Boy groups like BTS and girl groups like BLACKPINK are referred to as "world stars" and "super IPs," and their achievements have created a catalyst for the full-fledged development of the "K-POP craze."

K-pop is becoming an axis that amplifies the power of the letter 'K', both as a culture and as an industry. The K-content industry has grown to the point where it is on par with semiconductors and rechargeable batteries as a key national export industry, and K-pop is creating economic value as a catalyst that is revitalizing industries such as fashion, F&B, beauty, consumer goods, and education beyond the success of music and albums. In tourism, more than 1 in 10 tourists cited "wanting to experience K-pop" as a reason for visiting Korea before the pandemic.

The rise of Korean superstars is also having a cultural impact that we may not have realized, as it has drawn global audiences to race and music that was once considered a minority in the mainstream music market. The growing appetite for Korean content is also helping to discover talented creators and giving them more opportunities to reach the global stage.

As such, we are living in an era where everything we do in the content industry resonates beyond geographical boundaries. At the same time, K-POP has become a "global industry" that can only continue to grow by targeting both domestic and international markets.

However, I think it's time for us to have a "sense of urgency" rather than settle for our laurels because while this is certainly a remarkable achievement compared to the past, there are still many ladders to climb when looking at the global market as a whole.

Major K-pop companies based in Korea still account for less than 2% of the total global music market. On the other hand, the three major global music companies, Universal Music Group, Sony, and Warner Music Group, each have a market share of 15-30%, and their combined influence is enormous, accounting for 67.4% of the total music market. In short, K-pop is like a David in front of three major companies that resemble Goliaths in the global market.

While it's encouraging to see that companies like Goliath are just beginning to recognize the existence of David, there's another indicator that shouldn't be overlooked when looking at the global music industry as a whole. The growth rate of K-pop in mainstream markets such as the United States has been slowing down recently. Based on the Billboard Hot 100 chart, K-pop albums charted about 53% fewer last year compared to 2021, and the growth rate of K-pop music exports has also been declining since 2020. These indicators from the music charts and music consumption trends are alarming for those on the front line.

Even in Southeast Asia, a region where the Korean Wave is assumed to be steady, K-pop has recently seen a reverse growth trend. The growth rate of music exports in major Southeast Asian countries was -30% year-on-year in 2022. In Indonesia, the average annual share of K-pop on the Spotify charts was down 28% year-on-year.

In this context, the existence of global K-pop artists without a dominant global entertainment company inevitably leads to concerns about the industry's ability to be on the lookout for future uncertainties.

As domestic entertainment companies expand their unique know-how in K-pop overseas, they need more than just the freshness of a new player to compete in good faith with global top-tier companies. Just like Samsung's presence in the global semiconductor market and Hyundai's in the global automobile market, I think it is important for global entertainment companies to emerge and play a crucial role in breaking through the record of K-pop.

Of course, many of you have praised and encouraged domestic entertainment companies, including HYBE, for their success in the global market. However, to be fairly realistic, those in the field are striving every moment with a sense of urgency and mission that the current popularity should not be a 'flash in the pan'. They realize that if they rest on their laurels, they will be forgotten in an instant, despite all their hard works and struggles.

Switching gears for a moment, some of you may remember Hong Kong New Wave. The scene where Leslie Cheung mambo dances in "Days of Being Wild" is one of those iconic moments that capture the cultural sensibilities of the '90s in a single shot. Recently, the Japanese manga "Slam Dunk" was released in theaters, and it's another one of those films that symbolizes the cultural heyday of Japanese manga in the 90s.

I mention these examples because, unfortunately, the fact that we are now looking back on this cultural heyday as "memories" is exactly the kind of situation I mentioned earlier that K-pop needs to be wary of. As someone who started in this business out of love for music, and someone who has seen the blood and sweat of artists and front-line workers in the entertainment industry, I don't want the value and energy of this industry to be looked back upon as "memories".

So I think there is no better time to start drawing a more mid- to long-term roadmap and preparing for what's next for K-pop. If you're thinking about how to deal with it when growth starts to decline instead of "plateauing," it's too late.

[How to Prepare for the Continued Growth of K-pop]

So, how should we prepare for the "next" in K-pop? We all know that the rise of superstars like BTS has contributed immensely to the influence and growth of K-pop. As I mentioned earlier, to ensure the continued growth of K-pop, the infrastructure to support future global superstars must be solid.

I think the following three things are needed to achieve this. First, there should be efforts to expand the awareness and influence of K-pop in the mainstream market; second, since this is an industry where creativity is the core factor, it is necessary to improve the system that enables a diverse stream of creativity to coexist and thrive. Lastly, we must develop the platform to expand the boundaries in music, artists, and content to strengthen the foundation to reach more fans globally. Now let me go over each point at a time.

[Strengthening Global Market Presence/Influence]

In order for K-pop to become a sustainable genre rather than a fad, it is necessary to work its way to build presence in the global market beyond mere IP itself.

For example, K-pop needs influential partners with a local infrastructure to achieve seamless distribution of its albums and music. The so-called 'major three' companies are responsible for most of such distributions. You would think that since K-pop is so popular around the world right now, it would hold a strong influence in the global music market, especially in the U.S., which is the world's No.1. In reality, however, K-pop has little bargaining power compared to local labels when it comes to negotiating distribution rates with these major distributors.

To increase our bargaining power against these global distributors, we need to reach a certain level of scale. Using that, we can hold stronger negotiating power to get better distribution rates, which will help improve the company's financial performance and enable the company and our artists to grow. By leveraging better promotional opportunities, we need to ensure that more people are aware of the music and artists we are trying to showcase so that we can strengthen our presence and influence in the mainstream music market to a level that can't be ignored.

As has been the case with many other industries, such as manufacturing and IT, global markets are subject to emerging new competitors. It can take the form of restrictions on the market, or practices and operational methods of certain markets that have been in place for a long time that hinders the expansion of K-pop in the global market. This means that Korean entertainment companies should expand their position and presence in the mainstream market as the 'company itself,' where networks in the industry are important.

As for HYBE, we acquired U.S. label companies such as Ithaca Holdings, and QC Media Holdings. We also established a joint venture with Geffen Records. By exploring and implementing various ways to enter the U.S., the world's No.1 music market, we must build a strong network and infrastructure. Through this, we need to minimize the cost of trial and error caused by situations that are difficult for us to change, or due to our unfamiliarity with the local conditions, and secure an equal level of presence and influence in the mainstream market equivalent to local companies.

[Operation that Enables Continuous Creation of Superstars]

It is also imperative to have the capability to consistently create superstars who shake up the world's music industry. I believe that such capability springs from healthy and effective management practices. To be able to create a superstar while producing good results that keep pace with the artist's growth, it is essential to advance the entire operating system.

Some may say that the success of cultural content depends on luck or sheer intuition, therefore consider the content industry as unpredictable. However, if the content production process is structured, manualized, and accumulated as valuable assets, and if the production and operational know-how are systematized, it will enable the organization to respond more strategically to market variables and establish a culture that can constantly create good IP.

As a prime example, let me take a moment to talk about the multi-label structure that HYBE internally adopted since 2018. To enlighten you on what the "multi-label structure" means, it does not simply refer to a form where multiple labels coexist under one umbrella brand. It is a system that has been meticulously established based on experience, trial and error, and contemplation to enable the company's success.

Firstly, it is necessary to enable the creators to work freely on the label so that the essence of their work, creativity, can be fully captured in the label content. At the same time, we need to modernize and develop the entire operating system, including production. In the process, the label must constantly work on discovering new know-how to foster new creators and incorporate them into their operations.

As the umbrella for labels, the headquarter should provide insights into the company's infrastructure, network, and fanbase to other labels, and disperse the risks by sharing the performance of each label with others in the multi-label structure.

In this way, each label operating within a multi-label framework will be able to work in a healthy competition that drives each other to improve. This operating cycle will eventually settle as a culture within the system and inspire the employees, which will increase the chance of super IPs.

I believe that K-pop is not just a genre term that only refers to the musical characteristic but rather a culture that encompasses music-oriented systems such as music and content production, distribution, marketing, communication with fans, and other systems of music. The multi-label system is the best solution that forms operational culture because it sparks the vitality and joy that derives from endeavoring new and diverse attempts itself, without stagnating the label to settle for a certain style.

I've talked about the need for scale, presence, and impact as well as the structure that allows us to consistently produce superstars. Now, I will talk about platforms.

[Believing in the Power of the Platform and Evolving It]

The attempts mentioned above will make super IPs more likely and ultimately contribute to the continued growth of K-pop. In addition, efforts should be made to find and expand potential fans.

Global media outlets such as <Fast Company> and <TIME> have been citing HYBE as an innovator because they believe that our global fandom platform, along with our artists, is changing the music industry.

The development of technology has changed, and will continue to change, the way our primary audiences leisure and consume content, as in the case of the rise of digital consumption of music and short-form content on social media. In the past, artists used to approach their fans. But now, as the fandom platform has become a place where fans can interact with artists in their own time and place. The way they communicate with artists and enjoy content is also evolving.

A prime example of this evolution is Weverse, which was launched in 2019 and has since carved out a unique position as a global fandom platform. As of 2023, Weavers is on track to surpass 10 million global MAUS, which is a significant achievement for an app that was developed locally to serve a global audience. This is because Weavers is leading the way in the global market by creating a new field of 'fandom platforms' that did not exist before while presenting a super-platform that integrates functions such as community, commerce, and streaming centered on the needs and convenience of users called 'fans' instead of just one core function.

Going forward, Weverse will continue to add more artists from Japan, the U.S., and other countries to grow into a platform that connects more artists and fans. As Weverse is used by a range of fans around the world and the potential K-pop fanbase is expanding, we will continue to evolve the way we provide content and services to meet the changing lifestyles and individual needs of our fans. We are diversifying our content and services both quantitatively and qualitatively so that even fans who are simply attracted to the app can gradually become superfans as they explore our services.

If we spoke about the evolution of the corporate operating system as a supplier, the platform is an area that must be studied and expanded for the evolution of the fan experience. As the global market is paying attention, I hope Korean music companies will lead the process of developing from simply listening to and viewing content to experiencing, producing, and interacting with users.

[Final Thoughts: K-pop's Biggest Advantage is Its People]

So far, we've been thinking about the sustainability of K-pop and how we can grow both qualitatively and quantitatively. There is one last thing I'd like to add. It is about the 'people.'

I have always said at every opportunity that the most important competitive advantage in the entertainment industry is people, and that hasn't changed. We had a lot on the agenda today, including the state of the overseas market, the importance of economies of scale, the need for a multi-label structure, and the importance of platforms. K-pop, which will survive through these efforts, is ultimately created by people and aimed at entertaining people, so "people" are the most crucial part. As it is so evident, I don't want companies that center around IP and artists to miss out on this fact.

There are still some things that happen because some people think that entertainment companies can bend their artists to their will. As someone who has worked in this industry for most of my life, and as someone who currently runs an entertainment company, I want to make sure this impression changes. Companies need to respect the will of their artists as much as possible, both as human beings and as artists. The essence of 'management' in the entertainment industry is that the company and the artist work to create synergy in a partnership, and the company is there to represent the artist, not to make unilateral decisions.

This change in perception needs to happen at a company level, but since our industry is part of the 'popular culture,' and as a company that spreads and influences the mass culture, we hope to make this message resonate with society at large.

The same goes for the process of developing artists. An artist development system that prioritizes respect and growth should be the competitive advantage for K-pop. In the case of HYBE, we have a Training & Development organization that specializes in artist development. In simpler terms, it is an organization that trains trainees before they debut as artists, and with HYBE's philosophical ideology, it is an organization that helps them find reasons to choose this work as a career and love it, not just to become an entertainer.

Just as the time we spend thinking and experiencing things on our own gives us the strength to solve problems out in the world, I believe that the process of becoming an artist is no different. It's important to avoid the process of simply going back and forth between the practice room and home and help trainees grow into well-rounded people during their time in training.

It is also increasingly important to provide an environment where artists and trainees can receive sufficient psychological care. A certain level of economies of scale is needed for this care to become part of the infrastructure of K-pop companies.

Finally, you need to consider the people working in this business.

There was a time when working for an entertainment company was considered a "3D job," and of course, I feel that society's view of it has improved a lot since then. However, I would like the industry not to set limits based on the past entertainment industry when talking about the treatment of employees, such as salary and working conditions. I would like the industry to set more challenging goals so that it can be comparable to industries that are considered promising in the future, and to work together to improve the treatment of employees as the status of K-pop increases.

As of the end of 2021, there were 640,000 workers in the entertainment industry in Korea (*about 66,000 in the music industry alone). As K-pop-based entertainment companies expand their presence and influence in the global music market, I believe that their contribution to scale and diversity of employment will increase. This is because, in addition to creative professions such as music production/sound engineering/choreography/styling/art/design, many talented people are needed in various other areas to run a successful company. The industry's spectrum will grow, and the influx of talented people with different professional backgrounds will also increase in the entertainment field. We also need to be open to the influx of talent from beyond regional and cultural boundaries, as we need to expand our business on a global scale, and this will allow us to take on more challenging projects without resting on our laurels or methodologies.

In order to do so, as I mentioned earlier, efforts to improve the treatment of workers, including salaries and working conditions, are fundamental, and we must not forget that we need to continue to develop the industry into one that attracts talent, has healthy synergies, and rewards meaningful challenges and hard work.

[Closing Remarks: Challenges Beyond K-pop]

As someone who started HYBE in order to continue making music, I sincerely hope that the Korean music industry will continue to thrive. K-pop is a valuable asset and growth engine for our country, with economic and cultural implications beyond what many people realize.

In the current era of convergence, K-pop is at a point where it must continue to break the existing boundaries and establish itself as a part of global popular culture. I would like to emphasize once again the importance of looking outside the box and having influence in the global market as a 'company that represents Korea,' building a system that produces super IPs in the global market for the long term, and securing a sustainable growth engine for the company itself.

HYBE is also looking beyond K-pop and will continue to think harder and challenge itself to become a leading player in the global entertainment industry. We have shown physical and genre expansion with the acquisition of Ithaca Holdings and QC Media Holdings, but this is just the beginning. We will expand our multi-label structure as a system that is always open to welcoming labels of different colors. Based on this, we will continue to strengthen our content and platform competitiveness in a way only possible for a company that started from K-pop and pursue convergence with various other genres and IPs in terms of global production systems.

We will also attempt to discover a new spectrum of fan experiences that can be created by the convergence of music and technology, centered on platforms such as Weverse.

I'm sure we'll encounter more of life's ironies in this endeavor, but I also believe, expect, and hope that they will lead to more "good surprises." I hope you will support David's challenge to stand shoulder-to-shoulder with Goliath based on the global capabilities that artists, industry workers, and fandom have grown together over the past decade. And starting with me, I will work responsibly to ensure that the world enjoys the music and content we create for as long as possible.