As K-pop continues to devour the world, the record label and management company that developed BTS — one of the first K-pop groups to reach global superstardom in the streaming era — is looking to expand even further. Big Hit Entertainment first filed for its IPO in May, but on Friday, South Korean stock exchange company Korea Exchange gave Big Hit its first green light to move forward, declaring that it “fulfills the requirements to go public.”
According to Variety, which first reported the news, Big Hit’s next steps will include filing a securities registration statement with the Financial Services Commission. That’s supposed to happen within the next six months. Big Hit, however, has not yet revealed any concrete details surrounding the date, structure, or size of the share sale — but, as Reuters has pointed out, JP Morgan, NH Investment & Securities, and Korea Investment & Securities have already signed on as underwriters.
BTS, Big Hit’s crown jewel, earned more from touring than any other musical group on the road in 2019, generating more than $196 million from less than 50 shows and outgrossing even The Rolling Stones. Though demand for BTS reaches new heights each week, Big Hit is still a relatively small company — it doesn’t live within a major corporate entity like Universal, Sony, or Warner, at least not on a worldwide scale. By opening itself up to investments, the company could generate enough revenue to build offices in other countries and hire more executives, for example.
Around the time of its initial filing, Big Hit disclosed that the company made $85.4 million of operating profits from revenues of $508 million in 2019. That’s also when Big Hit became the biggest shareholder in fellow South Korean company Pledis Entertainment, growing the multi-label structure it pivoted to in 2019 with its acquisitions of label Source Music and game developer Superb Corp.
Universal and Sony, in particular, should be paying close attention here, considering that both companies have dug their claws into the K-Pop movement over the last two years, signing the likes of BLACKPINK (Interscope/Universal), SuperM (Caroline/Capitol/Universal), NCT 127 (Caroline/Capitol/Universal), TOMORROW X TOGETHER (Republic/Universal), Twice (Republic/Universal), Monsta X (Epic/Sony), and ATEEZ (RCA/Sony). While BTS distributes music their music in the U.S. through Columbia, and therefore Sony, the group is not signed to Columbia, and isn’t technically included on the American label’s roster. Will Big Hit cut out the middle man following its eventual expansion? Pass the popcorn.