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BTS entry: HYBE reportedly has a plan to survive the company with its largest source of income

May 17, 2022

With South Korean entertainment companies’ share prices plummeting, HYBE could suffer a massive profit hit if BTS members have to start their mandatory military service. To avoid this, the music label reportedly has a plan if Suga, J-Hope, RM, Jimin, V and Jungkook ever join the military.

HYBE has already announced its first quarter results and underperformed the market’s expectations, which were judged to be overestimated. So what would happen to the company if BTS were included in the list?

Since K-pop idols are the company’s biggest source of revenue, uncertainty about their military enlistment is impacting its first-quarter results. In an interview with Invest Chosun A label representative revealed that they have already prepared a plan in case the group has to go into military service.

The government of new South Korean President Yoon Seok-Yeol has issued statements on the matter, and one official said it was difficult to predict whether the group would be drafted into military service because no one is actively involved in passing the relevant law.

Given this uncertainty, the publication noted that the company shouldn’t obsess about recruiting. Sure, the global hitmakers are the current hype, but it needs to take its next step.

Someone familiar with HYBE revealed that the company has already prepared a plan for the scenario in which the BTS members will be included. Some insiders believe it’s better to end recruiting as soon as possible than to move on with uncertainty.

Although joint drafting is being considered so that they will all be released at once, that may not be the case just yet. Rumor has it that Jungkook is gearing up for his solo endeavors in the US and HYBE has followed the iron rule of group activity since BTS debuted.

Although he has a song for each group member, he has not yet done any solo activities like other idols. Now may be his time.

To make up for the potential loss, HYBE launched a game metaverse division, HYBE IM, and set up its own subsidiary, reports AllKpop. The company has reportedly recruited several employees from gaming companies, including former Nexon director Jung Woo-Young.

However, since HYBE CEO Park Ji-Won used to be Nexon CEO, it’s widely believed that the label is now entering the gaming industry.

A financial investment industry official said it is a turbulent time as entertainment companies need to break away from the old profit structure that relies mostly on artist sales.

So they had to find a way to survive in new environments like Web 3.0 and the Metaverse. While this isn’t the first time this has happened, it remains to be seen if this can prove to be a long-term revenue stream.