HYBE, the publicly-traded music giant behind superstars BTS, is in ‘diversification mode‘ to become less financially reliant on its flagship act.
Moves hinting at a broadening of HYBE’s strategy in recent times include the expansion of its games business, and its $1 billion acquisition of Scooter Braun’s Ithaca Holdings.
HYBE has also announced new high-priority artists in 2022, including NewJeans and Japanese boy band &TEAM.
The South Korean company even launched a global audition in June “for a boy group that will lead the next generation of K-pop”.
Could a major push into artificial intelligence be next on the agenda?
Last February, HYBE invested USD $3.6 million into a Korea-based AI sound company called Supertone.
Now, HYBE has reportedly upped its investment in the startup, by fully acquiring it for 45 billion South Korea Won (approx $31.75m at current exchange rates).
That’s according to Korea-based news publication Pulse News, the online home of South Korea’s largest domestic business newspaper, Maeil Business Newspaper.
Pulse reports that HYBE’s original investment saw it acquire an 18% stake in Supertone – and that HYBE has now acquired the remaining 82% interest in the company.
At the time of publication, HYBE had not responded to MBW’s request for comment.
Founded in 2020, Supertone claims to be able to create “a hyper-realistic and expressive voice that [is not] distinguishable from real humans”.
The startup generated global media attention in January 2021 with its so-called Singing Voice Synthesis (SVS) technology.
You might remember that the company used this tech to “resurrect” the voice of South Korean folk superstar Kim Kwang-seok, with the subsequent AI-generated voice debuted on Korean television show Competition of the Century: AI vs Human (see above).
Speaking last year, Supertone COO, Choi Hee-doo, explained to CNN that the company’s technology learned 100 songs by 20 singers to refine its style, and then learned 10 specific songs by Kim Kwang-seok.
Choi Hee-doo also claimed at the time that Supertone’s tech is capable of mimicking the artist’s voice well enough to pass off as the real thing.
He explained further that Supertone’s tech can be used for content creation for living artists, too, and the hypothetical example he gave last year might just offer an insight into why HYBE has reportedly acquired his company for millions of dollars.
“For example, BTS is really busy these days, and it’d be unfortunate if they can’t participate in content due to lack of time,” Choi Hee-doo explained to CNN last year.
He added: “So, if BTS uses our technology when making games or audiobooks or dubbing an animation, for instance, they wouldn’t necessarily have to record [that audio live] in person.”
When HYBE (then Big Hit Entertainment) originally invested in Supertone, we asked if it could soon create “hyper-realistic and expressive” clone voices for BTS members themselves, allowing HYBE to release BTS music (or at least BTS content), even without the band actively contributing vocals to that music?
This question is even more relevant today following the news from this summer that BTS would be taking a break to pursue solo projects.
We made the purely speculative suggestion at the time that it’s not completely out of the realm of possibility in today’s entertainment business, especially considering music streaming giant Spotify recently acquired a startup that created an AI audio model based on Val Kilmer’s voice for Top Gun Maverick.
It’s worth noting here that HYBE’s “Indirect Artist Involvement” – revenue-generating projects that use an artist’s brand/likeness, without the actual artist needing to be involved – became the company’s primary revenue driver in 2020 in the absence of live shows during the pandemic.
In FY 2021, a year in which HYBE revenues surpassed $1 billion in revenues for the first time, the company’s biggest organic revenue driver was, once gain, its “Artist Indirect” business, accounting for more than 60% of the company’s revenues.
These “Artist Indirect” business activities generated 733 billion KRW ($640m) last year – up 72.8% YoY (see below).
This ‘Artist Indirect-Involvement’ business was HYBE’s main revenue driver in every quarter of 2021, including Q1 (ending March 31), Q2 (the three months to the end of June), Q3 (the three months to the end of September) and Q4 (ending December 31).
It was only overtaken by the company’s ‘Artist Direct Involvement’ business line in Q1 2022.Music Business Worldwide
