SCMP Editorial

Editorial | The soft power of BTS carries financial clout

The IPO of the management company behind the South Korean boy band has it valued at almost US$8.5bn.

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Members of South Korean boy band BTS. Photo: Reuters

SCMP Editorial

Published: 11:33pm, 17 Oct 2020Updated: 11:33pm, 17 Oct 2020

John Lennon once said the Beatles were more famous than Jesus Christ. That might have been so, but Korea’s BTS is more valuable by market capitalisation than any pop group ever.

It is truly a sign of the times. The seven-member boy band is often cited as an example of the Asian nation’s phenomenal soft power, which ranges from consumer electronics to cinema and figure skating. But in terms of monetising the whole K-pop industry with cookie-cutter idols, nothing quite compares with BTS and their savvy managers.

Even before the stellar initial public offering (IPO) of their management company, Big Hit Entertainment, government economists reportedly had to factor in the group’s earnings and other revenues tied to their commercial activities when calculating South Korea’s gross domestic product. Big Hit’s shares doubled on their first day of trading in the Korean market and its IPO was the biggest in three years. The group with a massive following around the world accounts for 87.7 per cent of the label’s revenue last year.

Koreans often praise the band’s candid lyrics, which touch on sensitive social issues such as mental health. Many foreign fans, though, have no idea what they are singing in Korean. For them, their music is truly a universal language, accompanied by unmatched, synchronised choreography, characteristic of many K-pop groups and reminiscent of the late Michael Jackson and his dancers.

Canto-pop and J-pop (Japanese) long predated K-pop. In China, there is Mandopop, which desperately tries to replicate K-pop in Mandarin, and features Chinese matinee and television idols modelled after their Korean counterparts. It is quite difficult for the tightly controlled mainland entertainment industry to capture a free market’s secret formula of “cool”, which allows South Korea to punch way above its weight in global pop culture and politics.

Big Hit is now worth almost 10 trillion won (US$8.5bn), an enormous valuation that has been ridiculed by some stock analysts. The shares were further boosted by news reports that group members and other celebrities may be exempted from the country’s mandatory military service. But whatever soft power BTS has achieved for South Korea, nothing quite beats the colour of money, especially for their managers and their early investors.