K-pop group BTS to launch NFT: What’s it all about?
HYBE, the music agency that manages Korean pop (K-pop) megastars BTS – creators of hit track ‘Butter’ – has signed a joint venture (JV) with South Korean fintech company Dunamu to launch non-fungible tokens (NFTs) featuring the popular band, as well as other artists.
HYBE will acquire a 2.5% stake in Dunamu for KRW500bn ($421.6m, £313.3bn, €365.6m), while Dunamu will pay KRW700bn for a 5.6% stake in HYBE, according to a regulatory filing with the Korea Stock Exchange on 4 November.
The agreement states that the companies will establish a long-term partnership and will jointly promote new businesses – including NFTs – through their JV corporation.
K-pop band BTS arrives for the KIIS FM's iHeartRadio Jingle Ball at the Forum Los Angeles in Inglewood, California on 6 December 2019 – Photo: ShutterstockK-pop band BTS to launch NFT
Dunamu, which operates via the Upbit cryptocurrency exchange, will work with HYBE to release NFTs related to Korean band BTS through HYBE’s fan-communication app, Weverse.
Bang Si-hyuk, chairman of HYBE (formerly Big Hit Entertainment), said in a corporate briefing on YouTube:
BTS is one of the biggest names to join the NFT space, which is increasingly attracting artists, musicians, actors, sports personalities and teams to launch collectibles for their fans.
The BTS K-pop band, which launched in 2013, was named the best-selling recording act in the world in 2020 by the International Federation of the Phonographic Industry (IFPI). The band is the first Korean act to win the award, and the first winners to perform primarily in a language other than English.
Song Chi-Hyung, chairman of Dunamu, said in the briefing: “The hot topic of this year’s fintech industry is definitely NFTs, or non-fungible tokens. I think the word ‘irreplaceable’ was used in one of BTS’ songs. Irreplaceable – meaning something that is unique and one-of-a-kind.
“You can think of an NFT as an irreplaceable digital asset that can be safely and reliably verified so that anyone can trust that there is only one in the world. Such digital assets are created when specific digital content or products are given a unique value through blockchain technology.
Popular BTS merchandise includes the Jungkook photo card, which gives fans images of each of the seven-member boy band – Photo: ShutterstockLimited-edition photo cards
The JV will start by launching BTS-themed NFTs featuring limited-edition photo cards, which fans currently collect and trade in their physical forms.
Bang said: “Many fans explore ways to keep them [photo cards] for a long time, and since they are released in limited quantities, they are sometimes exchanged among fans.
“We are working with Dunamu to create a way to expand the fan experience more diversely and more securely, such as digitally authenticating the uniqueness of these photo cards and making them permanent, but also allowing them to be collected, exchanged and displayed in a global fan community platform like Weverse.
“Instead of a single-frame photo, it can be turned into a digital photo card with moving images and sound.”
Dunamu will “concentrate on developing a complete service so that the convergence of Dunamu’s fintech technology, and HYBE can bring another extended fan experience of value sharing and value exchange for fans around the world,” Song said.
As well as introducing NFTs, HYBE plans to launch a BTS video game co-produced with the band in 2022, and a webtoon and web-novel business featuring original stories based on its K-pop artists, including the BTS team.
The move to create a BTS group NFT collection comes as a result of the fact NFTs have taken off massively in popularity over this year. Several high-profile sales of artwork have brought the weekly NFT sales value above $1.6bn in August, while the number of active wallets that have bought or sold an NFT climbed to an all-time high of close to 100,000 on a weekly basis in October, according to data from NonFungible.com.
The music industry sees the potential for NFTs to create additional revenue streams from digitising assets and new ways of interacting with fans, while at the same time protecting artists’ intellectual property.
South Korea’s JYP Entertainment plans to partner with Dunamu to create further NFTs – Photo: Shutterstock Other K-pop crypto connections
Last week, HYBE issued a statement warning that a cryptocurrency called “Army Coin” that has launched on the Singapore-based exchange Bitget is not connected to the Korean group BTS, despite using images of the band to promote the coin. The name Army Coin is a reference to BTS ARMY, which stands for Adorable Representative MC for Youth – the name for the band’s fandom.
HYBE said: “We are examining the specific legal violations perpetrated by the issuers of this coin including the unauthorised use of our artist imagery, and we will mount all possible legal responses for such infringement and violations.
HYBE is not alone among South Korea’s largest entertainment companies in moving into the cryptocurrency space. In July, Dunamu invested KRW36.5bn to acquire a 2.5% stake in entertainment firm JYP Entertainment from producer Park Jin-young (aka JY Park), its largest shareholder. Dunamu will also work with JYP to jointly promote a K-pop NFT platform.
Dunamu’s Upbit is one of only four South Korean cryptocurrency exchanges permitted to offer won-based trading service following a government crackdown on the country’s cryptocurrency market in September.
Note that this article does not constitute financial or investment advice. Before investing in any NFT, always do your own research and remember that your decision should be based on your attitude to risk, your expertise in this market, the spread of your portfolio and how comfortable you feel about losing money. Never invest more than you can afford to lose.