The music industry is sharpening its focus on segmenting subscription offerings to boost revenues from music streaming.
As evidenced by comments from Universal Music Group‘s leadership team on recent earnings calls, superfans willing to pay more for exclusive content from their favorite artists will play a big role in what UMG calls the ‘Streaming 2.0’ era. Spotify is working on incorporating superfan content into its looming pricier Super Premium tier.
There’s already a lot to be learned, however, from existing dedicated superfan apps like HYBE’s dominant Weverse platform, which drive substantial revenues for artists and labels through exclusive content, merchandise, live events, and more.
Now, Kakao Entertainment, a prominent player in the Korean entertainment industry, and a rival to HYBE, has officially entered this space.
Kakao has launched a new app called Berriz, described as “a cutting-edge global fan platform designed to revolutionize the user experience.” The move from Kakao places it in direct competition with Weverse.
Kakao, together with its parent Kakao Corp., holds a 40.28% stake in K-Pop company SM Entertainment (see below). It also owns South Korean Music streaming service Melon.
Notably, in 2023, Kakao and HYBE engaged in a months-long corporate battle to take control of SM Entertainment.
As of June 30 2024, HYBE owned a 9.38% stake in SM Entertainment.
Superfan platforms generate revenue through multiple channels, including exclusive content subscriptions, merchandise sales, livestreams, and direct artist interactions.
In December, HYBE’s Weverse launched a Digital Membership subscription service that offers even more features — for an additional fee — like real-time translation in 18 languages, plus offline saving options, AI-powered video quality enhancement, and exclusive benefits for subscribers.
According to HYBE’s CFO, Kyung-Jun Lee, speaking on the company’s Q4 earnings call, while the Digital Membership service is “in the beginning stage,” its profits “are expected to increase gradually,” with revenue recognition starting from January 2025 following a month’s free trial for users.
The company’s “artist-indirect” segment, which includes merchandising, licensing, and the Weverse superfan platform, saw revenues jump 14.5% YoY to KRW 809.29 billion ($593.56 million) in 2024.
Weverse counted 9.4 million monthly active users as of the end of 2024 (see below).
As of the end of 2024, HYBE’s Weverse also hit the milestone of 150 million cumulative global downloads, with the number of artist communities on the platform growing 30% YoY to 162 last year. Weverse has previously said that around 90% of the artists on the platform are signed to labels other than HYBE.
In 2023, 13 artists under SM joined Weverse, including SNSD, Red Velvet, Vespa, TVXQ!, Super Junior, SHINee, EXO, NCT 127, NCT Dream, Way V, and Riize, along with soloists Kangta and BoA.
Amid Weverse’s appeal and popularity, the platform has attracted international stars to its platform, including Ariana Grande, Dua Lipa, Megan Thee Stallion, and Conan Gray.
In addition to music artists and creators, Kakao’s Berriz will also cater to fans of drama, film, webtoons and musicals. The name “Berriz” is a wordplay on “berries,” according to Kakao.
“Despite having different sizes and shapes, berries become sweeter when they are put together,” Kakao said. “Like berries, Berriz will establish its presence as a playground where K-culture fandoms worldwide can communicate and discover joy together beyond genres and scopes.”
The announcement from Kakao confirms earlier reports about the company’s potential plans to enter the superfan market. In January, Korea JoongAng Daily reported that Kakao filed trademarks for “BERRIZ” and “BERRYUS,” suggesting potential names for the upcoming platform.
Kakao explained that Berriz is more than just a communication tool. The platform integrates multiple AI, commerce, and livestreaming features. The platform lets IP holders and fans choose designs and services and modify the service and structure of the fan communities.
“Simply put, Berriz aims to set up an optimized community environment ― not a standardized service ― where fans can communicate and entertain without any limits,” Kakao said.
Early adopters of the platform include K-pop group KiiiKiii, which started engaging with fans on Sunday (March 24), the same day their debut EP UNCUT GEM came out.
“Berriz aims to set up an optimized community environment ― not a standardized service ― where fans can communicate and entertain without any limits.”
Kakao Entertainment
South Korean singer Jung Seung-hwan also opened an exclusive space for ‘US’, his official fan club.
Next month, Berriz will see the launch of a fan community for the upcoming MBC drama Crushology 101, based on a Kakao Webtoon with 170 million accumulated views.
Kakao said it will employ its experience managing multiple digital platforms, including Kakao Page, Melon, and 1theK, “to create a new fandom culture in collaboration with fans.”
Berriz is now available on the web and mobile devices, in 18 languages.
SM Entertainment also operates a fan app called Bubble via its DearU subsidiary.
Kakao isn’t the only entertainment platform to venture into the superfan market. Last year, Spotify CEO Daniel EK said the company will be launching a new “deluxe” tier that could include access to “superfan clubs.”
Tencent Music Entertainment, China’s largest music streaming company, is also banking on superfans to grow its business. The company recently reported a significant surge in its paying user base and improved average revenue per paying user (ARPPU), which was partly boosted by its ‘Super VIP’ (SVIP) tier.
Earlier this month, TME said its SVIP tier gathered more traction after it rolled out enhanced audio quality and effects including AI-powered audio effects and voice extraction, an expanded digital album library, and the rollout of more perks for online concerts, such as high-definition modes for some shows.
Last month, Live Nation President and CEO Michael Rapino confirmed that the company is in talks with Spotify, Apple, and Amazon around presale ticket access for super-premium tier subscribers.
Music industry giants Universal Music Group and Warner Music Group have also signaled their plans to focus on superfans.
“Superfans, the most avid 20% to 30% of all music listeners, once drove more than 70% of recorded music spending,” UMG’s Executive Vice President, Chief Financial Officer and President of Operations, Boyd Muir, said in September.
Last year, WMG CEO Robert Kyncl announced the company is working on its own “superfan app.”
In July 2023, Goldman Sachs estimated the addressable market opportunity for superfan monetization at $4.2 billion. The bank upgraded its estimate to $4.5 billion in 2024.
Music Business Worldwide
