K-Pop Agency Expands Investments
The K-Pop SM Entertainment agency has acquired an additional 11.42% of FAN Platform Operator Dear Co. for 135.6 billion won ($92 million). This acquisition adds to the growing list of South Korean entertainment firms focusing on direct and superfan platforms.
Known for representing K-POP groups like Girls’ Generation, Red Velvet, Aespa, NCT, and RIIZE, the company announced the transaction on the Korean Exchange innings on Friday (March 28).
According to the application, SM purchased 2,711,351 shares at 50,000 won ($34) each from JYP Entertainment, the general director of Dearu, Jung-oh An, and two other investors on March 24.
Strategic Acquisition Details
The purchase price reflects a 25% discount from the closing price of KRW 39,900 ($27) on March 24.
This transaction increases SM’s stake in Dearu to 45.1%, as SM previously held a 33.7% share in the company through its subsidiaries SM Studios, SM Japan, and All Japan prior to this latest transaction.
Established in July 2017, All Dearu operates the Bubble subscription-based platform, allowing fans to pay a monthly fee of KRW 4500 to exchange private messages with K-POP artists and watch live broadcasts. Launched in February 2020, the platform reportedly gained 2.3 million subscribers by the second half of 2023.
In addition to Bubble, Dearu also manages the mobile karaoke app All Field.
Future Outlook for Superfan Platforms
As Bubble continues to thrive, Dearu has acquired Universe, a mobile fan platform developed by the video game company NCSOFT that was launched in January 2021. Following the acquisition in 2023, Dearu migrated Universe users to Bubble.
In 2024, profits fell to 25.4 billion won from 28.6 billion won in 2023, with a revenue decline to 74.9 billion won compared to 75.7 billion won the previous year.
This significant transaction highlights how major Korean entertainment firms are focusing on engaging fans, alongside their traditional artist management strategies.
Kakao Entertainment, alongside its parent company Kakao Corp., holds 40.28% of SM Entertainment and has recently entered this market with the launch of a new application called Berriz Field.
This application is touted as an “advanced global fan platform designed to revolutionize user experience,” catering not only to music artists and creators but also to fans of dramas, films, webtoons, and musicals.
Meanwhile, one of the dominant superfan platforms in Korea, Weverse, operated by Hybe, holds 9.38% of SM Entertainment as of June 30, 2024. Weverse has helped boost revenues for the “Artist Activation” segment at Hybe by 14.5% year-on-year, reaching KRW 809.29 billion ($593.56 million) in 2024.
As of the end of 2024, Weverse boasts 9.4 million monthly active users and has reached the milestone of 150 million cumulative global downloads, with the number of artist communities on the platform growing by 30% to 162 from the previous year. Weverse previously reported that around 90% of artists on the platform are from labels other than Hybe.
In July 2023, Goldman Sachs assessed the market opportunities for superfan monetization at $4.2 billion, revising its estimate to $4.5 billion in 2024.
SM Entertainment buys additional 11.4% stake in Bubble superfan app operator DearU in $92m deal
