Read on Twitter
my guess is BH aren’t so much into “saving” the industry but rather taking the opportunity to dominate & to reshape large parts of it.BangPD explained (years ago) that he founded BH & has been driven forward by “rage”. While there wasn’t a big strategic plan in the beginning + https://twitter.com/agent_snark/status/1354465643182092289
he said he cld see & cldn’t stand the unfairness of the music industry that treated artists & ppl working in the industry so poorly. BH/BTS focused on music & fans (content) and, he said, on improving lives for artists AND for ppl/staff in the industry - was his happiness/goal +
I previously said (yrs ago) that BH was setting up to revolutionize the industry. BH didn’t like the “playing field” so took steps to divorce themselves & build their own. They did. Just Weverse exposed how crucial BH (still primarily just BTS) are to parts of the existing system
Now that they hv power (info, infrastructure & artists everyone else wants) plus serious leverage (remember: VLive began losing $ when BH/BTS left & ran into the red in the 4Q of 2020; BH’s operating profits greater than the Medium 3 combined, etc) they can buy in or partner up +
w established companies that had/have parts of the infrastructure ‘playing field’ BH doesn’t yet do itself
Live-streaming was obvs going to be their first target acquisition bc BH has aimed for years now to expand into a content platform co (platform focused on musicians & fans)
Live-streaming was obvs going to be their first target acquisition bc BH has aimed for years now to expand into a content platform co (platform focused on musicians & fans)
I (and many others) half expected BH to outright takeover (or JV w) a specific company using (in part) the capital (ie $) they raised in the IPO. Rmbr: BH went public (for $) for a REASON.
That co didn’t happen (rumour: weren’t interested). But (recently money losing) VLive was.
That co didn’t happen (rumour: weren’t interested). But (recently money losing) VLive was.
BH moving BTS content away from VLive kept content control + $ in-house. It cost BH a lot to build WV frm ground up but they no longer had to share any $ w VLive. Reasonable guess that, since BH/BTS had long used Vlive services the contract terms for profit split of paid content+
likely heavily favoured VLive and diminished how much BH (and, in turn, how much BTS personally) earned from that content.
Weverse eliminated that “leakage” by cutting out the 3rd party platform.
Weverse eliminated that “leakage” by cutting out the 3rd party platform.
But Weverse is still new & even working around the clock they don’t have all the resources or infrastructure to host livestreams or concerts. VLive & Naver do: staff, and resources.
Now, however, instead of VLive holding balance of power in negotiations (which it did back in 2015-ish when Vapp launched bcoz artists NEED a platform, there weren’t many options, and well, its Naver) & therefore being able to set terms most favorable to it, BH is at least equal.
What this means is BH’s power is to redefine industry terms associated with platform use. Reasonable bet? They will. It doesn’t seem likely that it’ll be more of the same terms (esp for BH artists) as in the past w the established k-music infrastructure.
But it’s just a guess rn.
But it’s just a guess rn.
In addition, the share swap with VLive means BH still, at least partially, stops that 3rd party profit leakage. Both companies have an interest in maximizing the returns of each other.
BH/BTS cld hv continued on using 3rd party platforms. The fact they didn’t & only “partnered up” after their divorce shifted the balance of power in their favour & it couldn’t be denied it NEEDED them strongly suggests to me BH has little interest in “saving established industry”
They worked, started from the ground up, and built a platform of power.
Then they came in with their terms. They mean to CHANGE things in the established industry not save it.
What they’ve done is remarkable & rly smart.
It’s pretty f-ing cool (and as I’ve said, revolutionary)
Then they came in with their terms. They mean to CHANGE things in the established industry not save it.
What they’ve done is remarkable & rly smart.
It’s pretty f-ing cool (and as I’ve said, revolutionary)
So the surprise side deal investment in YGPlus
One of BH’s next steps was likely gonna be related to merch/manufacture. Even tho some design is inhouse merch & albms were contracted out to 3rd parties. Less power imbalance in those deals as essentially theyre service contracts
One of BH’s next steps was likely gonna be related to merch/manufacture. Even tho some design is inhouse merch & albms were contracted out to 3rd parties. Less power imbalance in those deals as essentially theyre service contracts
YGPlus' main business is merch planning, manufacturing and distribution and advertising.
YGEnt didn’t create it, it was a publicly traded company named Phoenix Holdings Inc before. YGEnt acquired it by majority/largest shareholder in 2014 and renamed.
YGEnt didn’t create it, it was a publicly traded company named Phoenix Holdings Inc before. YGEnt acquired it by majority/largest shareholder in 2014 and renamed.
The YGPlus deal is NOT reciprocal.
This isn’t a deal of equals like the share swap w VLive.
YGPlus got no part of BH or BeNX. Furthermore YGPlus is NOT YGEnt.
I’d call it a kind of subsidiary or an affiliate in that YGEnt was the largest single holder at ~37% (public owns ~44%)
This isn’t a deal of equals like the share swap w VLive.
YGPlus got no part of BH or BeNX. Furthermore YGPlus is NOT YGEnt.
I’d call it a kind of subsidiary or an affiliate in that YGEnt was the largest single holder at ~37% (public owns ~44%)
BH & BeNX, by investing ~$63M USD, just bought up about 17% of the common shares of YGPlus, to become the second largest shareholder. YGEnt shares in YGPlus drop down to ~27%.
BH’s press release is clear, they want ownership stake in a network of distribution & merch production.
BH’s press release is clear, they want ownership stake in a network of distribution & merch production.
Here’s some
to consider.
Only BH COULD hv invested in YGPlus but it split its total investment w BeNX.
Why?
Bcoz bringing BeNX (platform subsidiary) to the table meant that, in order for YGP to get investment $ frm BH, it cld require YGEnt to contract w BeNX for platform service
to consider.Only BH COULD hv invested in YGPlus but it split its total investment w BeNX.
Why?
Bcoz bringing BeNX (platform subsidiary) to the table meant that, in order for YGP to get investment $ frm BH, it cld require YGEnt to contract w BeNX for platform service
This is ammunition in the platform wars, plus a future revenue stream for BeNX not dependent only on BH artists -> less risk perception by investors.
YGEnt had a BRUTAL 2019. That’s not stan twt, that’s numbers.
It’s spent 2020 digging out.
It’s gotten rid of unprofitable subs
YGEnt had a BRUTAL 2019. That’s not stan twt, that’s numbers.
It’s spent 2020 digging out.
It’s gotten rid of unprofitable subs
in attempts to cut losses.
YGPlus was actually profitable in 2019 (not even slightly close enough to stop that giant YGEnt hole but...) It likely was profitable on its own in 2020 too. But YGEnt, esp since LVMH pulled out, has needed cash injection. Hence the deal.
YGPlus was actually profitable in 2019 (not even slightly close enough to stop that giant YGEnt hole but...) It likely was profitable on its own in 2020 too. But YGEnt, esp since LVMH pulled out, has needed cash injection. Hence the deal.
Is BH “saving” YGPlus/YGEnt?
Not rly.
For BH it’s a ‘cheap’ opportunity to get ownership interest + access to existing merch & album/music manufacture & distribution. BH now get to redefine ALL terms relating to that side of business + end deals w former distributor (ie Dreamus)
Not rly.
For BH it’s a ‘cheap’ opportunity to get ownership interest + access to existing merch & album/music manufacture & distribution. BH now get to redefine ALL terms relating to that side of business + end deals w former distributor (ie Dreamus)
BH don’t have to build their own network etc for manufacture and distribution frm the ground up as they did WV.
BH also, by taking ownership interest, gets returns based on other companies using YGPlus’ services.
It’s a likely win on multiple fronts.
BH also, by taking ownership interest, gets returns based on other companies using YGPlus’ services.
It’s a likely win on multiple fronts.
Shareholdings shift over time too...
Just saying that the ownership percentages that resulted from this singular deal don’t necessarily mean that’s the end game on investment or acquisition.
Just saying that the ownership percentages that resulted from this singular deal don’t necessarily mean that’s the end game on investment or acquisition.
