superfans
For two decades, the price of a music streaming service was frozen at $9.99 per month. Prices only began rising in 2022, leading to improved economics for both streaming companies and rights holders. Now, streaming platforms are closer to taking another leap forward in monetization.
The next phase of the music business, Spotify CEO Daniel Ek said during the company’s earnings call on Wednesday (Feb. 5), is tailoring experiences to “different subgroups” such as lucrative superfans. In fact, Spotify has already developed something for these subscribers, and Ek is currently testing the unnamed product. “I’m personally super excited about this one, and this is a product I’ve been waiting on for quite some time as a super fan of music,” he said. “And I’m playing around with it now, and it’s really exciting.”
Targeting superfans is part of Spotify’s current focus on launching new products. Ek called 2025 “the year of accelerated execution,” meaning the company “can pick up the pace dramatically when it comes to our product velocity.” Exactly how these new products will be monetized and ultimately impact artists and rights holders is unknown. But Alex Norström, Spotify’s co-president/chief business officer, hinted at both higher price points and an a la carte approach when he told analysts that “future tiering” and “selling add-ons to our existing subscribers” are two of the ways Spotify thinks about increasing average revenue per user.
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Recently updated licensing agreements with Universal Music Group (UMG) and Warner Music Group (WMG) also hint at the pending arrival of superfan products and additional pricing tiers. In announcing renewed deals with Spotify, both UMG and WMG cited their agreements’ ability to enable new paid subscription tiers and exclusive content bundles.
Sony Music and independent distributors and publishers have not announced a similar renewed agreement, however, and new licensing agreements with all of them would be necessary for the kind of product Spotify has described, says Vickie Nauman of digital music advisory and consultancy CrossBorderWorks. “If there is a superfan layer that is built around sound recordings, then it’s going to require licensing with revenue share between platform, publishers, labels and PROs,” she says.
Exactly what Spotify’s superfan product will look like and require from artists remains to be seen. Nauman hopes Spotify will learn from past mistakes. “I’m not sure what the killer features for a superfan might look like, but whether niche apps or DSPs, this cannot require the artist to do much if anything,” she says. “We have a long history of failure of initiatives requiring artists to post on social, port their fans to a new app and deliver custom content, and this simply doesn’t work. Artists want to be artists.”
New licensing deals also open the way for a more expensive, high-resolution audio tier which Spotify first began teasing in 2021. “Of course, the success of launching with a limited content pool depends on what’s on offer with the new service, but there’s not a big downside to launching a new service that has limited hi-res music, where the selection of music is highly likely to increase over time,” says digital music veteran Dick Huey of consultancy Toolshed. “I doubt that adding hi-res music to Spotify will be particularly controversial, in particular because they’ll bring an upsell to labels, that of higher subscription costs. Also, because other services already offer hi-res music.”
Whatever the final product, streaming services’ targeting of superfans — if history is any precedent, competitors will follow Spotify’s lead — will produce incremental revenue for Spotify and more royalties for creators and rights owners. The new additions could also help reduce artists and songwriters’ frustrations about the economics of streaming music that have plagued Spotify. As for subscribers who opt into the new offerings, they’ll get more features and artist access in return for higher fees. In short, these new iterations of Spotify should create a win-win-win for all parties in the equation.
Artists such as Ariana Grande, Dua Lipa, Megan Thee Stallion and Conan Gray helped Weverse, HYBE’s social media/fandom platform, grow its users by 16% in both the U.S. and Canada in 2024, the company announced Wednesday (Jan. 22). Weverse users also saw strong growth elsewhere, rising 21% in Brazil, 14% in Mexico, 22% in Japan and 54% in Taiwan. Originally a platform for K-pop groups, the platform has grown along with HYBE’s global expansion and posted 19% user growth across all territories.
Those statistics and more come from the new 2024 Weverse Fandom Trend Report, a recap of the platform’s tremendous growth and a testament to fans’ interest in their favorite artists. Joon Choi, president of Weverse Company, called 2024 “a transformative year” that expanded the platform’s artist communities, fan engagement and commerce activities. “Weverse remains committed to innovating its services to meet the evolving needs of artists and fans, solidifying its position as the center of global fandom culture,” he said in a statement.
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As much of the music industry begins to focus on better serving superfans, Weverse has already established itself as a money-making destination for fans of a select group of artists. The platform launched in 2019 and last year introduced a subscription tier that provides ad-free viewing, video downloads for offline access, high-quality streaming and language translation. “Digital membership, we believe, is the very first cornerstone of the future evolution [of Weverse],” Choi told Billboard in December.
Like a typical social network, Weverse allows artists to publish messages and content and gives fans an opportunity to leave comments. In 2024, Weverse Artists on the Weverse platform shared approximately 206,000 posts and fans generated 370 million posts. SEVENTEEN had the highest number of posts while ENHYPEN had the most comments. The platform also allows fans to send direct messages to artists — a perk for subscribers. Last year, artists sent 698,000 direct messages to fans and fans sent 96.36 million messages to artists. More than half (55%) of artists on Weverse send direct messages to fans at least every two days. Fans also sent 4.88 million personally decorated digital letters. Jung Kook received the most fan letters while LEEHAN of BOYNEXTDOOR responded to the most fan letters.
Weverse also hosted 5,787 live broadcasts on Weverse Live, the platform’s live streaming feature, totaling 4,779 hours of content in 2024 (artists don’t only live stream concert performances on Weverse Live and in fact usually opt for casual interactions and Q&A sessions with fans). Weverse Live videos were viewed 426 million times by 11.25 million unique Weverse users in 2024, while the top live stream of the year was “Missed You a Lot” by Jung Kook, which amassed 23 million real-time views.
E-commerce separates Weverse from a typical social network. Through Weverse Shop, Weverse sold 20.6 million pieces, a 13% increase from 2023. Physical merchandise such as albums and collectibles improved 10%, while Weverse Shop also sold 3.4 million pieces of digital merchandise, including artist memberships and online content, a 24% increase. Other than Weverse’s home market of South Korea, the United States and Japan were the top markets for merchandise. The top-selling digital items were artist memberships: BTS ARMY memberships were most popular in Oceania, Latin America and Europe while SEVENTEEN’s CARAT memberships were most popular in North America.
For all the value derived from social media, artists and labels have yet to generate revenue directly from their activity on Facebook, Instagram and other platforms. In contrast, Weverse, a social media and e-commerce platform owned by South Korean company HYBE, changes up the typical social media dynamic by generating direct revenue from the fandom it facilitates.
This month, in an effort to generate even more revenue from superfans, Weverse introduced a digital membership tier that offers additional perks such as ad-free viewing, video downloads for offline access, high-quality streaming and language translation. The paid digital membership is separate from the fan clubs offered on the platform and Weverse’s own direct messaging feature that allows users — for a fee — to message their favorite artists.
“Digital membership, we believe, is the very first cornerstone of the future evolution” of the music business,” Weverse CEO Joon Choi tells Billboard. He adds that in the first two weeks that digital memberships were made available on the platform, 79 artists (out of 162 active artist communities on Weverse) have given fans the option of signing up for them.
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Weverse is an anomaly in social media: a platform with a small number of high-demand musicians rather than a large number of mostly unpopular artists. Launched in 2019, Weverse had 9.7 million monthly active users (MAUs) as of Sept. 30, according to HYBE’s latest financial results, down from 10.6 million a year earlier. The platform is a Swiss Army knife of a promotional vehicle. Artists not only post media content and updates but also conduct live-streams and respond — for a fee — to fans’ direct messages, while the platform additionally sells concert live streams, music and merchandise. And HYBE’s most popular artists can rack up amazing numbers on the platform: Earlier this week, BTS member Jung Kook set a Weverse record with 20.2 million real-time views of a 2.5-hour live broadcast in which he spoke to fans during a break from his military duty.
In recent months, Weverse expanded beyond K-pop artists by welcoming such Western, English-language stars as Ariana Grande and The Kid Laroi, hinting at possibilities that have record labels salivating. Goldman Sachs analysts have estimated that improved monetization of superfans — including new digital platforms, greater emphasis on vinyl buyers and higher-priced music subscription plans — could result in $3.3 billion of incremental revenue globally by 2030. Given the potential, it wasn’t surprising to hear both Warner Music Group CEO Robert Kyncl and Universal Music Group CEO Lucian Grainge express their interest in superfan products and experiences earlier this year. In September, UMG CFO Boyd Muir said the company was in “advanced talks” with Spotify about a high-priced superfan tier — something Chinese music streaming company Tencent Music Entertainment already launched with early success.
In the early days of its membership tier, Weverse is still figuring things out. “We are pioneering this field, so we see a lot of unknowns,” says Choi. For example, he says Weverse has heard from many labels that it should bundle the digital membership tier with fan clubs already offered by artists into something like a premium membership tier (of the 162 active artist communities on Weverse, 72 currently offer fan clubs). He adds that Weverse would not make the decision independently but is discussing it with labels. “Combining them together in the future, I think it’ll be stronger than what we offer right now,” says Choi.
The rollout of the membership tier hasn’t been without controversy, though. In October, an article at The Korea Herald quoted an email from Weverse to its partner record labels in which the company said participation in the membership tier is “mandatory for all artist communities hosted on Weverse.” The article also quoted a South Korean lawmaker who called on the country’s Fair Trade Commission to investigate Weverse’s “new forms of monopolistic practices and determine whether unfair treatment is occurring against affiliated companies using the platform.” Weverse says it has not been contacted or investigated by regulators.
Choi pushes back against the assertions in The Korea Herald, saying artists on the platform are not required to offer a subscription tier, in contrast with the email quoted by the newspaper. “That’s not mandatory,” he insists. In a separate statement to Billboard, Weverse said it “aims to roll out digital membership to all communities” but that the decision “is the choice of labels and artists” and, in any event, fans will still be able to use many existing Weverse services for free. Despite Weverse playing an integral role in the marketing and promotion of K-pop artists, Choi argues it doesn’t have enough market power to make such demands: “We are not in a dominant place where we can just present the policy and dictate our policy to the artist or labels however we want.”
Weverse has also received criticism for its revenue-sharing splits with labels, with The Korea Herald additionally citing an anonymous source as saying the company proposed a “disproportionate” share of the revenue ranging from 30% to 60%, leaving the artist and label with anywhere from 40% to 70%. Choi declined to comment on the business arrangements that determine how much subscription revenue Weverse keeps but noted the platform is investing money into the subscription tier to create features valuable to artists and their fans.
The pushback encountered by Weverse foreshadows the challenges platforms and labels will face as superfan platforms proliferate and the stakeholders wrangle over how the money will be shared. Labels and publishers have spent decades trying to get more value from streaming services, and short-form video apps like TikTok necessitated new conversations about how to compensate creators for the value they bring to the platform. As Choi says, “What we’re doing is basically creating a new value by connecting the artist and super fans in the same place.” In the process, HYBE has pioneered a new model that could become standard practice for artists and labels in the music business of the future.
Andrew Batey is best known to the music industry as the founder of streaming fraud prevention company Beatdapp. But for the last six years, Batey has been simultaneously building up a venture capital firm called Side Door Ventures. “I always wanted to just be viewed as a founder, but Beatdapp is probably my last company,” says Batey, a serial entrepreneur, who has also built companies in the restaurant and digital marketing industries. “I started thinking about where I want to transition to eventually, and I believe it’s investing.”
For the last 15 years, Batey says he’s mentored hundreds of companies at different accelerators, which is where he got the itch to start stepping into the investor role. After years of angel investing to check his aptitude, he realized, “I feel like I’m really good at picking the right companies.”
Side Door quietly launched in 2018 and comprises 14 different smaller funds covering a wide array of disciplines — space travel, blockchain, manufacturing and more. Investors are also interested in music and entertainment, too, though Batey says it needs to be something he believes he can grow “by 100x” and “there are not that many” entertainment startups that fit that bill. To date, he’s made investments in companies like SpaceX, Pipe, Plaid, Varda and EtherFi, as well as music-related startups like JKBX and the now-defunct superfans app Renaissance, which he felt particularly passionate about.
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In total, Batey says Side Door has averaged 61% gross internal rate of return across all funds since its launch and has over 100 companies in its portfolio.
Now that Beatdapp has established itself as an industry leader with partnerships with Universal Music Group, the Mechanical Licensing Collective, Beatport, SoundExchange and more, Batey is ready to talk about Side Door Ventures for the first time.
Why are you making your press debut, six years into Side Door Ventures?
To talk about it too early seemed like a giant, “Look at me! Look at me!” And that’s not really what a founder needs — a founder needs help. I’ve always just felt comfortable being the neck that moves the head, but I’ve lost my ability to be stealthily leading this, the more checks we’ve written.
In the beginning, a lot of startups just thought I was a founder. As soon as we had that founder-to-founder rapport, the person would just start sharing all these things that he wouldn’t have shared with an investor. But none of them were deal breakers. I found the transparency actually really great. There was a strength in meeting a founder at their level, without them knowing you’re the investor.
I named the fund Side Door Ventures because they never saw it coming when I would meet with the founder. They just thought I was mentoring them, and then I would suddenly be like, “I’d like to write a half million dollar check.”
It really favored us well because I wasn’t convincing them why they needed our money. I gave them advice and mentorship first, and then told them I wanted to write the check and that’s the exact thing they want. Many want someone that’s going to be helpful, and not someone just writing a check. In really tight funding rounds where people get pushed out, we often got into them early on when we should never have been.
But the cat’s out of the bag, and I’m ready to just own it.
What makes Side Door Ventures different from others in the field?
Fundamentally, the way we’ve been billed as a fund is entirely different than everyone else. We intentionally started with small funds that are $10 million to $30 million each. We have 14 funds overall.
When I started the fund, I had a big family that offered to give me $100 million to get started, and they wanted to know what my strategy would be. I always felt that big funds are really hard to return. So my strategy was, Why don’t we make a bunch of smaller funds of higher return multiples that traditionally perform better?
When I started talking to fund managers, though, they thought it was crazy. They’re like, “Institutions won’t bankroll that — a pension fund wants to have a check size of at least $10 million.” If you’re building a fund to please people covering their ass, you’re not building a fund for optimal returns. And if I was building a fund for optimizing returns, and if this was my money, I would go the opposite way and make a bunch of small funds. So my customer investor is totally different than most. My customers are high net worth individuals and families who care more about the returns, and less about whether I check a box.
For every small fund we have a slightly different iteration. We have one with the state of Michigan which is just focusing on manufacturing, advanced materials and mobility — things that the state of Michigan has talent resources for. We have a web3 fund which focuses on blockchain. We have a seed fund which is focused on seed investing. We have a European fund focused on European college students, specifically. I don’t know any other funds doing it like this.
Most Billboard readers know you as the founder of Beatdapp. Given that background, do you have interest in investing in companies that are complementary to what Beatdapp does?
Because of Beatdapp, I have views on where the industry could still use a lot of help, and I probably have some unique data insights about where there’s juice to squeeze. But I view Side Door and Beatdapp as entirely separate. We don’t have any of the same investors, so I don’t take money in one entity and then bring it to the other. It’s a fully firewall situation where we have different investors, different teams, different everything.
If there is anything that I’m too privy to because of my work outside of Side Door — let’s say that I have a relationship with founders of a company — I generally sit out of the investment committee and let the rest of the committee decide so that there’s no bias going into the decision making.
I love music and entertainment. It’s a big part of my background, so I obviously want to invest in things that are in that sector. But the majority of all music companies exit for under $15 million. The reality is that music is not the best venture-backable investment, which means that there are very few companies that meet the sort of the requirements to warrant a venture capital investment from us.
We have a bunch of funds, but they’re all basically investing in things we think could [provide] 100x [returns]. So if you’re a music startup valued at $20 million, how many companies have exited that are over $2 billion? The answer is probably only a handful — like Spotify.
That means one of two things. I either have to catch you way earlier, like in your first round, or you need to be such an outlier that I believe the market will move in your direction. For example, we invested in JKBX. Why? If you think about JKBX as a trading entity and the fact that it’s more of a fintech play than it is a music play, you could see a platform getting traction. Now, will they make it or not? Only time will tell. But they have the profile to potentially be worth billions of dollars if they can build that habit formation and become another asset type.
You have mentioned before that you learned a lot from investing in a superfan company, Renaissance, which ultimately went bust. Monetizing the superfan is such a hot topic in the music business right now. What did that experience teach you about the viability of superfan-related startups?
We see 7,000-8,000 deals a year, and I cannot think of another case where I saw a consumer-facing application that was as sticky with their fans as Renaissance. They had a million downloads — all organic, no marketing. They had 47% day-90 retention, meaning 47% of all users stuck with it after 90 days, which is insanely good. I think the average user launched the app 21 times per day — that’s like Instagram level.
The problem is that I don’t think they knew how to fully monetize it. Artists didn’t want to pay for it, labels didn’t want to pay for it. There wasn’t a big enough venture-backable business there. It was more of a $10 million to $15 million business, but how do you make that a $100 million business? They were struggling to figure out what could be scaled.
If this company who had the viral, organic growth and absolutely crushed it couldn’t figure out how to get those customers to pay, and couldn’t figure out how to get artists to pay, and couldn’t figure out how to get labels to pay, then how are any of these other fan apps going to make money?
The only way I think you can build a successful “superfan” business is by owning the merch pipeline itself — basically, you need to be the one that’s vertically integrated. You need to be integrating and selling the actual goods yourself so that you can build enough margins in there to support the business. If you were just a third party marketplace for all these other goods and services — like posters and tickets and merch — I don’t think there’s enough money there. I don’t believe that’s scalable.
This summer, the major labels filed a lawsuit against two AI music startups, Suno and Udio, and in early September, it was revealed that the use of AI music was instrumental in the scam alleged in the $10 million streaming fraud lawsuit. Do you see this affecting people’s confidence in AI music startups?
It could affect consumer confidence, but I do not think it will dissuade investors. The reality is, investors aren’t afraid of breaking things. Where a lot of people are mad because the status quo is changing, a lot of investors see that as a positive — as they say, “Volatility breeds profitability.”
However, what will succeed here is whoever comes up with a business model where everyone wins and it’s convenient for consumers, and they enjoy the experience. I haven’t seen one that wins yet. I haven’t seen a business model where consumers actually like it.
Look at the Drake–Weeknd guy [anonymous TikTok user Ghostwriter and his song “Heart On My Sleeve,” which used AI to deepfake Drake and the Weeknd]. His song was listened to millions of times, but it also had a pretty equal number of listeners. What that means is people were only listening to it one time or so and then leaving. It was a novelty. It wasn’t something that people saw longterm value in. Until there’s a product that people see longterm value, it’s not going to work.
Universal Music Group and Spotify are in “advanced talks” over a high-priced, superfan tier of the streaming service that offers a better user experience than the standard subscription plan. The status of the negotiations were revealed by UMG CFO Boyd Muir on Tuesday during the company’s Capital Markets Day presentation in London. That a Spotify […]
Universal Music Group opened up about how the company plans to keep growing in amid an evolving streaming landscape on Tuesday at the company’s capital markets day. Held in the storied Abbey Road studios in London, UMG’s c-suite and various executives from Republic, Interscope, Virgin Music Group and more described how they build a world around superstars like Taylor Swift, The Weeknd and Olivia Rodrigo, and how they’ve launched new acts like the Afrobeats star Rema.
The crowd of mostly financial industry analysts and investors also got an overview of the collectibles UMG hopes superfans will open their wallets for, its talks with Spotify about higher-priced premium subscription plans, and it’s new strategy to keep streaming revenues growing by an 8-10% compound average growth rate until fiscal year 2028.
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Streaming 2.0
Despite industry reports that new streaming subscribers are hard to find in developed markets and that streaming growth rates in smaller music markets like Brazil, Italy and Germany are besting major markets like the U.S., UMG Chairman and Chief Executive Officer Lucian Grainge gave an overview of UMG’s new strategy — dubbed Streaming 2.0 — to get more revenue out of streaming.
“The addressable market — in both established markets and fast-growing high potential music markets — is massive,” Grainge said, referring to streaming subscriptions. “We expect more than a billion subscribers by the end of the decade, and we constantly ask ourselves, ‘How long could it take us to get to 2 billion?’”
“While streaming has delivered robust growth to UMG for over a decade, Streaming 2.0 will deliver a new age of innovation, consumer segmentation, geographic expansion and greater value through both subscriber and [average revenue per user] growth,” Grainge said.
The strategy relies in part on increasing the number of streaming subscriptions in developing markets where UMG says subscribers meaningfully contribute to monthly trade average revenue per user. Less than half of people in established markets have streaming subscriptions, with less than 25% of the population in Japan holding subscriptions, UMG chief financial officer Boyd Muir said.
UMG said it also expects a new wave of subscribers in these markets to come from a second cohort of older listeners starting up subscriptions and younger, digitally native music fans getting older and spending more on their streaming subscriptions. They also expect to target audiobook listeners and satellite radio subscribers for music streaming subscriptions.
Super premium streaming subscriptions
UMG’s Streaming 2.0 strategy also relies on innovation in streaming, possibly like the development of high definition streaming plans like the one Spotify‘sDanielEk hinted in June is on the horizon. Ek said that “delux” subscription could cost around $17-$18 per month for a single account.
UMG is in advanced talks to partner with Spotify on the development of that higher-priced subscription plan, Muir said Tuesday. During his presentation, UMG chief digital officer Michael Nash compared it to “another exciting” example of higher priced subscription plans — Tencent Music Entertainment’s super VIP tier, which costs five times as much as the standard tier.
Muir said “a double digit percentage” of TME’s subscriber base signed up for the super VIP plan. UMG’s own research tells it that 23% of current streaming subscribers would pay more for a “better music experience.”
Monetizing superfans
UMG execs spoke admiringly of the good old days when superfans lined up outside stores to spend gobs of money on Michael Jackson and Shania Twain CDs. The reason why? Devotees of artists in prior decades spent more per capita on music, merchandise, concert tickets and collectibles than streaming-era fans.
“Superfans, the most avid 20-30% of all music listeners, once drove over 70% of recorded music spending,” Muir said. “Streaming monetizes them, but not nearly as well in the past. This is an enormous opportunity. We are seeing dramatic growth in revenues that are complimentary to spending.”
He was referring to premium music — vinyl, collectible CDs and cassettes — and merchandise collectibles. UMG has seen its revenues from products sold directly to consumers through some 1,300 odd online stores grow at a 33% compound annual growth rate in recent years.
When something like a $55-Olivia Rodrigo Stanley Cup gets sold, UMG collects as much information as it can, and the purchaser becomes one of the 100 million fans in what Muir referred to as “our owned audience.”
Townsend Music, a U.K.-based distributor and direct-to-consumer retailer, has been acquired by Artone, a Dutch business with a portfolio of companies that caters to the physical music marketplace. Terms of the deal were not disclosed.
Townsend Music founder Steve Bamber called the acquisition “a clear opportunity to push its European expansion strategy forward quickly, with Artone’s well established sales, distribution and manufacturing facilities already in place.”
Artone can quickly scale up and meets its goal of becoming a global D2C company, according to sales director Bruce McKenzie. “Artone’s suite of services from vinyl manufacturing, EU physical distribution, and label services gives us perfect synergy to offer both our D2C clients and super-fan customers a super charged service,” he said in a statement.
Artone was formed in 2022 from the merger of Bertus Distribution and Record Industry, a vinyl pressing plant based in Haarlem, Netherlands. The portfolio of companies also includes Sound Factory, which provides artists and labels with solutions to sell exclusive content directly to consumers; two labels that release music in physical formats, Music on Vinyl and Music on CD; and V2 Benelux, which provides label services in the Netherlands, Belgium, France and Germany.
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“The acquisition is another welcome step for Artone’s continued expansion of its service portfolio and gives us presence in the UK market,” CEO Jan Willem Kaasschieter said in a statement. “This acquisition strengthens our position as a global leader in physical music distribution. We’re excited about the opportunities this will bring and look forward to driving the future of physical music together, developing further global reach and innovative solutions for the benefit of the music industry.”
Physical music sales continue to show strong growth as streaming takes a larger portion of the global market. In the United Kingdom, vinyl sales grew 13.5% and CD sales improved 3.2% in the first half of 2024, according to the Entertainment Retailers’ Association.
With vinyl sales continuing to rise and streaming growth slowing, the music industry is putting increased focused on reaching “superfans” willing to pay more for premium experiences and tangible products. The unmet opportunity to monetize superfans was a key talking point in Universal Music Group’s Capital Markets Day presentation on Tuesday (Sept. 17). “We’re creating and monetizing new ways to meet the superfans pent up demand for products, experiences and access that brings them closer to the music and to the artists that they love,” said CEO Lucian Grainge.
Warner Music Group CEO Robert Kyncl has also made superfans a priority during his tenure. “One of the most important things is to figure out a direct relationship with the most valuable fans,” Kyncl said at the Morgan Stanley Technology, Media and Telecom Conference on March 6. “Because it’s not only important to monetization and new revenue stream, but it’s also important to launching new music, which is the core of what we do.”
Effectively reaching superfans could be a lucrative endeavor for record labels. In its latest “Music in the Air” report, Goldman Sachs analysts put the global superfan addressable market at $4.5 billion—nearly 16% of the $28.6 billion recorded music market in 2023, according to the IFPI. Much of that revenue could come from music subscription services’ high-priced, high-value offerings that go beyond the current premium subscription tier.
Physical goods are a proven way to connect with superfans. Market research firm MusicWatch found that 20% of U.S. music fans are superfans for their favorite artists who go to concerts, buy merchandise and albums and would be wiling to spend more for VIP experiences from the artist. At the same time, more superfan sales are coming from the types of direct-to-consumer stores offered by Townsend. In the first half of 2023, U.S. direct-to-consumer sales tracked by Luminate increased 20% year-over-year.
Last week, HYBE — the Korean label and music company behind BTS, among others — announced that Jason Jaesung Lee would become its new CEO, replacing Jiwon Park, as part of what it dubbed its “HYBE 2.0” strategy. Today (Aug. 1), the company unveiled more specifics as to what that will start to look like.
HYBE says the strategy kicked off at the top of the year, and will see the company lean into its superfandom platform, Weverse, around the world, while also partnering with other companies globally “to adapt to the fast-evolving market landscape,” the company said in a press release.
The priorities the company laid out will reorganize the company — which had previously been structured as Label, Solution and Platform — into a broader Music, Platform and “Tech-driven future growth initiatives” framework. As part of that, the company laid out four new initiatives and several executive-level appointments with new leaders atop its reformed division.
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The first is the formation of HYBE Music Group APAC, which will encompass the company’s labels in Korea and Japan, which will focus on doubling down on the company’s strengths and strategies in that region and exporting them around the globe. The current president of BIGHIT Music, Young Jae Shin, who has helped oversee the success of BTS and Tomorrow X Together, will now take on the role of president of HYBE APAC and lead the Korean and Japanese labels’ global growth.
The second is a doubling-down on what the company calls its “multi-home, multi-genre” strategy in the U.S., Japan and Latin America. That will mean a new label service launched under HYBE America — which is led by Scooter Braun — that will bring in a management element to its current label operations, in a bid to “bring the K-pop methodology to the American pop scene.” As part of that, HYBE America says it signed a new U.S.-based group, KATSEYE, through its continued partnership with Geffen Records. The company also said that its HYBE Latin America division — whose CEO Jonghyun “JH” Kah recently spoke to Billboard about their plans — will ramp up beginning in 2025, while HYBE Japan will continue to roll out new artists as well under newly-appointed chairman Youngmin Kim, who until now had served as general manager of SM Entertainment.
The third is the launch of a subscription membership tier for superfan platform Weverse, which will go live in the fourth quarter of 2024 and be available to all artists who use the platform. That will include ad-free videos, digital membership cards and a private Weverse DM feature, while the main Weverse platform will begin incorporating ads. Weverse president Joon Choi spoke to Billboard two weeks ago (July 19) about the platform’s plans moving forward, as well as the onboarding of Ariana Grande onto the platform, joining many of the Korean artists already in the HYBE stable. (Grande, who cut ties with Braun and HYBE last year, resumed working with them in June.)
Finally, HYBE is planning to “merge content with technology,” which it says will “ensure mid to long-term growth” for the company. That is where HYBE’s investments in gaming, AI, audio and voice technology and integrated online/offline experiences will live moving forward.
“HYBE 2.0 focuses on fostering our future growth businesses centered on music, platform and technology,” newly-announced CEO Lee said in a statement. “HYBE will continue to excel in the music industry, solidify its position as the leading player in the superfan business, and secure long-term growth drivers through tech-driven future growth initiatives.”
As a music journalist, I tend to look at fan armies with only professional interest — what they mean for the industry and how I can make sure they won’t figure out where I live. Last week, however, I suddenly had to face the fact that I’m in one — and I have been for the last 35 years. And I realized that many creators might need to change the way they think about cultivating and keeping superfans.
I went to Stockholm last week to see Bruce Springsteen, one of my favorite artists, for what must be at least the 30th time. I stayed in a hotel close to the venue, which was full of people like me — by which I mean Springsteen fans of a certain age (ahem) who wanted to see the concert enough to travel from all over Northern Europe and, in some cases, the U.S. Many came with spouses or children, and some planned on seeing a few shows — or even a couple of weeks’ worth. One couple said that they were happy Springsteen now gives himself a couple of days off between shows, since it gave them more time for sightseeing during the vacations they organize around concerts.
These people don’t think of themselves as part of a fan army. They don’t have a nickname or collect different versions of the same CD. I don’t, either. In fact, I feel a bit sheepish saying that this concert was one of the highlights of my summer, or that I spent a few hundred dollars to go, but it is and I did, and it was totally worth it. After the show, about two dozen people gathered in the lobby after the show to talk highlights and trade war stories, and some of them gathered again the following night after cancelled flights left them stranded in Stockholm. I feel even more sheepish about how much I enjoyed that.
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Whatever. From a music business perspective, this is just what superfans do. One difference between his and most is that Springsteen built his audience the old-fashioned way — with unforgettable live shows that convinced fans to come back and bring friends (and, these days, kids). The people in my hotel are obviously the exception — I’m talking about a few dozen people in a venue that holds more than 50,000 — but at this point I think Springsteen concerts mostly draw serious fans. (Springsteen opened with “Seeds,” which he only ever released as a live performance on a 1986 box set, so I assume he thinks the same.) And although it’s hard to be sure, I think most of them were won over by his concerts.
These days, music executives focus less on live acts — how live are most pop performances anyway? — and more on hit singles. Fan armies are built online, usually around the shared experience of hoping a song will go to No. 1 or buying extra copies in order to boost it. But how long will that last? The music you love when you’re young tends to remain in your life, but going to concerts might have more appeal over time than trading gossip about chart position online. Cultivating an audience devoted enough to keep coming back year after year can be much harder — but it can also be more effective.
The problem is that this part of the business is hard to see in data. Industry executives often talk about how much superfans are worth in terms of the CDs or tchotchkes they buy, but it’s harder to measure the effect of fans who keep coming back over the course of years. I saw one Springsteen show this year and two last year, which doesn’t really move the needle. The 30-or-so shows I’ve seen would, of course, but those were over a period of 36 years — starting with, if you’re curious, the Tunnel of Love Tour in May 1988. (I was already enough of a fan to attend two of the five shows — and then I was really hooked.)
What keeps me coming back — and I think what keeps most fans coming back — is that Springsteen delivers shows that are both consistently great and fairly different. If he’s had an off night, I haven’t seen it. At the same time, he makes every tour different and varies the set list every night, with moments of genuine magic — in Stockholm he delivered a haunting “Racing in the Street” and pulled a kid up onstage to sing the chorus of “Waitin’ on a Sunny Day.” Others keep going back to hear rare favorites — seeing Springsteen play “Jole Blon” in September 2012 was a profound experience for me, even if most of my friends had absolutely no idea what I was talking about.
You could say a lot of these things about a lot of rock bands — there was a time when playing a different set every night was the rule instead of the exception. And it does seem to draw people in. Fans love a curveball of a cover, and some even appreciate the flubs — there’s so much more at stake without the artificial perfection that comes from a click track. Communities are built from appreciating, comparing and, yes, griping about difference performances. Just read the New Yorker story about Dead & Company to get the idea.
Like any true fan, I’m going to say Springsteen is different. More than any other current artist, he believes — and gets concertgoers to believe, at least for the time he’s onstage — that rock actually matters, that there’s more at stake onstage than entertainment, that this kind of music can actually sustain you. As I get older, with less time to drive down an empty highway for no reason at all, it gets harder to believe that. But I’d like to. Maybe in some way I need to — so much that I’ll be back next year and probably again the year after that.
In a move that highlights her selective engagement with social media, Ariana Grande, who deactivated her Twitter account years ago but remains the seventh-most-followed person on Instagram, is set to join HYBE’s superfan platform, Weverse.
Weverse Company tells Billboard that the chart-topping star will join the platform on Sunday (July 21), adding to a roster that includes BTS, BLACKPINK, JVKE, NCT 127, (G)I-DLE, Lauv, YOASOBI, Conan Gray, AKB48 and thuy. In joining the platform, Grande will have the ability to post messages and content to her own dedicated community, hold livestreams for members, read personalized fan letters, upload exclusive media content, share disappearing messages, and utilize the popular Weverse Shop, which sold more than 18 million pieces of merchandise last year to fans in more than 198 countries.
The announcement marks a significant moment for both Grande and Weverse, opening up a new way for the singer to deepen her connection with fans while showing a commitment to her continued business relationship with HYBE and HYBE America CEO (and Grande’s former manager) Scooter Braun.
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Since opening in June 2019 with Billboard 200 chart-toppers TOMORROW X TOGETHER as its first artist, Weverse now hosts 146 artists from countries including South Korea, Japan and the U.S. Its biggest artist community, for BTS, boasts 26 million members, while the ENHYPEN community has 9.8 million. Today, HYBE reports over 155 million lifetime downloads and an average of 10 million monthly active users across 245 countries and regions, with 90% of its user base now coming from outside Korea. Despite Warner Music Group (WMG) announcing plans for its own superfan app — as well as WMG and Sony investing early in rival superfan platform Fave — Weverse says its start with K-pop artists delivered important insights to entice top Western stars like Grande to join.
“What’s lucky for us has been that K-pop idols are the types of artists that have a very strong core fanbase,” Joon Choi, president of Weverse Company, tells Billboard of the company’s half-decade of growth that now includes investment from Universal Music Group. “As a platform and a business, we had already enjoyed the competitive edge or advantage of being there first and being there early to observe what superfans actually want.”
While artists can use Weverse to access first-party data for content delivery, promotion and to stay connected to international fans, the platform has expanded opportunities in live music with not only event streaming but its Weverse Con Festival and a Weverse by Fans tool through which fans can develop their own merch.
“We were there earlier and we have a long experience of observing the demands of our fans,” Choi adds. “That’s why we were able to create this one-stop fan service that includes merch development, merch selling, communities, videos, live streaming and even magazines…I do see the growth of startups or services that are entering this particular [superfan] market and that’s good. The more competition in the market is actually better for us because being the only player in that particular market sector makes us nervous.”
New competitors or not, Weverse continues to expand; currently, the company boasts a total of 400 employees in South Korea, 60 in Tokyo, and 20 in Santa Monica, Calif. (with the target to grow to 30 this year). And with a major star like Grande, there’s a slew of Arianators that could soon be joining the platform. Still, the executive admits he doesn’t know what to expect from the Eternal Sunshine singer once she officially joins. As he puts it, “It is totally up to the artists.”
Read on for more insights from Joon about Grande’s big move and what lies in store for Weverse’s future.
Weverse is adding new artists all the time, but Ariana Grande is a huge name with a worldwide fanbase. What have the weeks been like leading up to this announcement?
I just traveled a lot; I’ve been a globetrotter. We have offices in Santa Monica and Tokyo, and in each office location our leaders are currently meeting and contacting many artists and labels, so I believe our platform and business are becoming truly international and crossing borders. As we do that, we have opportunities to engage with and work with big artists, but also rising stars, so these opportunities are being created.
In the past, Weverse or artists have held special events or activities to begin their time on the platform. Will Ariana have a welcome party?
My simple answer to that question is that it is totally up to the artists. So, although we do have sessions where we offer guidelines or guidance in terms of how to better utilize the platform to cultivate the superfan culture or fandom, we do not necessarily engage too much [in terms of] planning activities or what’s going on the Weverse platform. I know that this might not be the direct answer that you’re looking for, but we have artists onboarded onto Weverse with a very good understanding of the difference between Weverse and other social media platforms.
What opportunities do you see for Weverse in welcoming Ariana Grade, and what opportunities are now open to Ariana?
Weverse is definitely a distinct platform, different from other social media platforms, so I’m also very curious how it will be utilized by artists like Ariana Grande. It really depends on each artist or label whether they discuss details about how they want to or plan to utilize Weverse. But in this particular case, we don’t know yet — that’s something that I’m closely watching.
But I would like to add that when I look at Weverse from my perspective as the leader of this business, it’s important to have enough resources and big enough clusters of a particular genre, specific country or culture. So, that’s why we’ve been working hard to onboard many artists. During the first half of this year alone, we have onboarded Nightly, thuy, Lauv, Umi, Conan Gray and JVKE. And then we have Ariana Grande. But Gracie Abrams has been very active as well; she’s good. So, when you see Weverse as a platform and in terms of the growth of our platform, it is very important that we have thriving clusters of certain music genres, countries or cultures to generate a network effect as well.
Weverse does a lot of business selling music, albums and merchandise via Weverse Shop, but Ariana isn’t only involved in music: she has R.E.M Beauty and perfumes; she’s in movies and television. Does she give you opportunities to expand into new commerce markets?
I can’t comment on an artist’s existing merchandise lines or albums since there must be agreements or contracts in terms of production and distribution in place. How merchandise is developed and sold through Weverse really varies by each artist. But a feature that we have on Weverse, Weverse by Fans, has been very effective and is gaining a lot of attention from artists because it is based on fan demand. Also, Weverse by Fans doesn’t require a minimum quantity of manufacturing goods for production. So, as soon as there’s enough demand for a certain type of merch, we can immediately produce and sell those.
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On one hand, Ariana Grande is one of the most followed people on Instagram, but she also deactivated her Twitter years ago and takes social media breaks. How were discussions with an artist who might have complex feelings about social media?
That’s a very good question. Actually, when we meet a lot of artists, we tell the artists to actively use other social media because Weverse is a little different. It’s a place where people who love the artist gather. This isn’t our claim — artists have been saying this particular characteristic makes Weverse a very friendly and safer platform for artists to engage with their fans and the public compared to [other] social media…and that’s not just specific to big-name artists. We have been having opportunities to work with rising rookies as well. We don’t really care whether it’s a big-brand artist or not; what’s more important for us is to seek and discover artists interested in cultivating superfan culture, regardless of how famous or how popular they are, to work with us and use Weverse.
Ariana is the seventh-most-followed person in the world on Instagram. Do you worry that adding an artist with such a wide audience could open Weverse up to trolls or those with bad intentions?
Our product features are already equipped and have the advantage of features like filtering, reporting and in-house moderators to prevent and manage ill-intended activities on Weverse’s platform. I do understand the concern that you raised regarding such potential, and I agree with you. However, such circumstances or ill-intended activities occurred for artists already onboarded on Weverse. So, it would not just be for Ariana Grande that such a thing could happen. But I believe we have about four years’ know-how in operating and managing trolls or activities like that. So, we are not too worried, although we are still being very, very cautious about how to manage that.
I’d add that we always tell artists when onboarded to Weverse that the best use case has been using live broadcasts to communicate with fans directly. K-pop artists have been doing so well in terms of using Weverse as a platform for that, and also through the membership, they can have closer, more direct interactions with their fans as well. So, we’ve been telling artists from the inception, from the moment that they are onboarded to Weverse, that these are some of the ways that are historically proven to be very effective to have a very long-term and sustainable fandom relationship.
What is the onboarding process like? Are you personally meeting top artists?
We’re not a service that allows anyone to sign up, [like] on a website like YouTube or other social media. We don’t know when that’s going to happen, maybe in the far future we will switch to such a model. But so far, we have been doing internal research to discover and identify artists who would have a potential benefit or whose fanbase overlaps with the user base of Weverse. These days we are getting a lot of inbound inquiries from artists or other labels themselves. In the past, we used to do a lot of outreach to discover or find more artists, but since last year, as words such as “superfan” and “Weverse” have become more buzzy in the industry and the market, we have been gaining a lot of attention.
It’s not just me but other teams; we call it a B2B team in Korea, but maybe in the United States, it’s called a customer success management team. We have internal resources that frequently discuss and follow up with labels and artists.
I’m personally curious as someone in media, do you ever imagine a day you might expand the type of people beyond musicians?
Definitely. We already have some actors and actresses onboarded, but this question is really good. We’ve thought about it, but the timeline is very important. The ultimate goal of Weverse is to create a superfan not only for human artists. While I believe Weverse is currently working the best for superfans of a person with a thriving fandom, we’ve already seen an interesting case of the virtual idol group in Korea called PLAVE with a significantly high engagement level within their community on Weverse, which is very, very noteworthy. That’s where we saw the potential of expanding this platform not just for human artists but also for virtual artists. However, we also see the possibility of extending this IP to include other types of artists; this is a fun future that we can imagine at the moment. We still have a lot of room for further growth within the music industry so that’s where we have greater focus.
Since you said this was your personal curiosity, I’m giving you my personal opinion and projection on that potential. [Laughs] My biggest question working at Weverse is, “How many people out of the entire human population would have the ‘superfan’ DNA?” That’s kind of the ultimate thing we are looking for. Someone might be a superfan of a certain sport or sports team — there’s always a superfan of something or someone.
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There’s the Weverse Con Festival, Weverse Magazine, there’s exclusive shows to stream. Why is Weverse developing IP beyond the platform? I imagine a HYBE Festival would be well received.
Weverse is a platform, so neutrality is the greatest value that we really emphasize and prioritize, which has been the case since Chairman Bang [Si-Hyuk] originated this platform. From day one, we really valued neutrality as an important value for us, but also in using such a new business model, we believe that we can lead innovation in the music industry. When you look back on the music industry’s history for the last two or three decades, it started by simply selling albums, then the touring business rose, and since 2000, technology has been disrupting the music industry. Now, it’s time for us to seek the answer to what’s next, right? I think Weverse is a platform and a business that has been most actively conducting experiments in order to answer what’s next for the music industry. If our experiments succeed, we can definitely offer benefits to artists all around the world, and that has been the basic philosophical foundation for our business and platform. We’re very, very, very, very serious about it.
Some people here might not like what I’m just about to say, but considering all the other [types of] content — it can be TV shows, movies, video games, everything — we think music itself, just as a piece of content, is the least compensated compared to all the others. So, we really have to think about that from a business perspective. …There is way more around music, right? There is no doubt that music is the core — and that’s why the mission statement of HYBE is, “We believe in music” — and that’s where we started from. [But] to make it a sustainable business, that’s where we can evolve from.
It was fun to see JYP Entertainment founder J.Y. Park perform with Chairman Bang at Weverse Con Festival last month. JYP is one of the last big K-pop agencies not on Weverse. Was this a hint?
We’ve always wanted all the artists from JYP, no doubt! [Laughs] But this time, it was just about the music. But of course, we’ve always wanted JYP — simple!
Removing yourself from work for a second, who or what are you a superfan of?
I’ve been a very big [music] fan since the ’80s: I listened to Casey Kasem with America’s Top 10, I was a Billboard kid. I think about all the famous songs and artists from the ’80s and ’90s — I’m that old guy [Laughs] — and then I had the recent memorable experience with PLAVE. The DJ JoJo [Wright] from KIIS FM actually visited Weverse Con Festival, held a lot of interviews with artists performing, and mentioned that one of the most impressive interviews he had was with PLAVE. From my perspective, from the ’80s and ’90s to virtual artists on the radio, that’s a very interesting journey to see and experience.