K-pop giant HYBE’s superfan platform Weverse is launching a set of new higher-priced membership tiers for users on December 1.
Current Weverse subscribers pay around USD $24 per year for benefits including exclusive content and announcements from their favorite artists.
According to The Korea Herald, the new Weverse launch – dubbed “digital membership” – will upsell fans into new tiers with prices ranging from $2 to $4 per month, which will offer additional benefits such as offline access to music and ad-free video streaming.
There is, though, a catch for HYBE’s fellow music rightsholders.
According to a source speaking to the Herald, HYBE has told partner labels who use Weverse that it will be keeping between 30% and 60% of revenues from the new membership plan, depending on the tier. (The partner labels would then receive between 40% and 70% of the money.)
Some 130 partner labels were told in an email dated September 26 of the new subscription plan and concomitant terms.
The Herald reports that they were also told that the terms were mandatory.
Weverse is seen by many in the music industry as one of the leading efforts to monetize superfans, that segment of the music audience that is willing to pay more for access to exclusive content and a closer relationship with their favorite artists.
In the five years since its launch, the platform has grown to have some 10 million monthly active users (MAUs), and recently HYBE has been busily expanding the platform beyond its base in Korean pop music. Ariana Grande and The Kid LAROI are among the Western artists who have joined the platform in recent months.
Interest in the platform was further sparked by the news earlier this year that Universal Music Group would be taking a stake in Weverse.
In August, Weverse announced that it would be introducing subscription-based memberships for artists.
This membership service, to be launched in Q4 of this year, will be separate from existing fanclub memberships on the platform and will offer “enhanced features for fans to enjoy Weverse in a more convenient environment, along with the integration of certain fanclub features.”
HYBE’s proposed mandatory terms for Weverse’s new subscription tiers has led to some criticism of the platform, including from politicians such as Rep. Lee Jung-mun of South Korea’s Democratic Party.
“Weverse, operated by Hybe, has been criticized as an irreplaceable, monopolistic platform in the K-pop industry, controlling everything from live content and merchandise sales to fan community management,” Rep. Lee said, as quoted by the Herald.
While it would be a stretch to say that Weverse is “monopolistic” in a global context, it may be easier to make that argument within the South Korean context, where it is far and away the largest superfan platform, with five times as many MAUs as its nearest rival, SM Entertainment’s Bubble, which has 2 million MAUs.
Of the 152 artist teams hosted on Weverse, 137 are not affiliated with HYBE labels, the Herald reports.
“Labels have become so dependent on Weverse that they can no longer conduct fan marketing without it,” Rep. Lee said. “The Fair Trade Commission needs to thoroughly investigate these new forms of monopolistic practices and determine whether unfair treatment is occurring against affiliated companies using the platform.”
“Labels have become so dependent on Weverse that they can no longer conduct fan marketing without it.”
Rep. Lee Jung-mun, Democratic Party of Korea
The Herald reports that, while larger South Korean record companies like SM Entertainment will be able to handle Weverse’s revenue-sharing split, given their large fan bases, it could prove to be more of a problem for smaller labels.
One small label reportedly told Rep. Lee that Weverse’s membership scheme could harm artists’ reputations “by appearing to exploit fans for money.”
Some fans are also unimpressed with the paid membership offer, saying that it provides little additional value. The new paid membership tier will offer features such as ad-free and higher-quality video streaming, as well as offline access.
The Herald suggested the fact Weverse is making membership mandatory for labels could be a sign that HYBE fears many labels wouldn’t sign up voluntarily.
HYBE has also been the target of other consumer complaints. The company received the most demands for damage relief from consumers among all K-pop companies between January 2020 and August of this year, Korea JoongAng Daily reported last month.
In response to a request from Rep. Lee, the Korean Consumer Agency (KCA) told parliament that the five largest K-pop companies – HYBE, Kakao Entertainment, SM Entertainment, JYP Entertainment and YG Entertainment – received 240 consumer damage relief requests during this period, and 66% of them were against HYBE.
The requests were related to complaints such as defective K-pop merchandise, delivery delays, and violations of refund policies.
Weverse was among four e-commerce platforms linked to K-pop firms to have been fined for violating consumers’ rights by altering their refund windows, the KCA said.
The controversies over Weverse come amid a period when HYBE, like other K-pop companies, has seen its share price slide. It was down 20.5% year-to-date as of Thursday (October 17), trading at KRW 192,100 (USD $140.20) per share.
That decline in market value prompted holders of a series of HYBE’s convertible bonds to demand early repayment, forcing HYBE to rapidly refinance $293 million in debt. Company CEO Jaesang Lee has reportedly told staff that the company has adequate cash holdings, and HYBE is financially “very healthy.”
The company has reported inconsistent revenue growth this year, which it attributed primarily to the hiatus of BTS, its largest K-pop act, whose members are serving mandatory military service.Music Business Worldwide
