NFTs and cryptocurrency draw K-pop labels behind BTS and Blackpink as they seek new ways to persuade fans to part with their money

Like Facebook, K-pop-focused entertainment companies based in South Korea are jumping on popular digital trends.

These include creating their own metaverses and crafting virtual stars. At the heart of many of these initiatives is the rise of cryptocurrencies and non-fungible-tokens (NFTs).

Cryptocurrencies such as bitcoin and Dogecoin have been popularised as an alternative to traditional monetary formats, providing lucrative opportunities for tech-savvy investors.

With the rise of NFTs this year, especially in the entertainment and art fields, as a way to sell transferable, blockchain-based digital records of ownership for pieces of digital artwork, it was only a matter of time before K-pop bought into the trend.

Following rumours of companies such as BTS’ management Hybe Corp launching NFTs, and Hybe denouncing efforts to persuade the group’s fans to invest in cryptocurrency using the band’s brand without permission, November has seen major K-pop labels announce plans to embrace these very technologies.

On Nov 4, Hybe said it was partnering with the largest cryptocurrency operator in South Korea, Dunamu, which hosts the popular cryptocurrency exchange Upbit, to launch a joint venture focused on creating and marketing NFTs tied to Hybe’s roster of artists.

These include not only K-pop stars such as BTS but also Justin Bieber, Ariana Grande and many others.

The same day, Korean media reported that YG Entertainment, the label of superstar K-pop girl group Blackpink, was investing in a soon-to-launch NFT business venture funded by several entertainment and business entities.

And on Nov 9, SM Entertainment, the label of K-pop groups including NCT and Aespa, announced it would create content, tied into its SMCU metaverse, that would be sold via NFTs in collaboration with the prominent blockchain platform Solana.

While these entertainment giants are the latest, and most prominent, adopters of NFTs in South Korea, other Korean music companies made similar announcements earlier this year.

In July, JYP Entertainment, the label of K-pop groups Twice and Stray Kids, also said it would be working with Dunamu, and smaller entertainment companies announced digital technology ventures around the same time.

Although entertainment companies and investors are involved in NFTs, metaverses, and cryptocurrencies, it’s unclear how valuable all of these fads will prove to be, as they are very tech-oriented and have received a mixed response from those unfamiliar with the concepts.

NFTs especially have raised concerns about the environmental impact of the blockchain technology used to validate the ownership and sale information of each NFT. Some blockchain applications, such as bitcoin, require heavy computer power to “mine” new units.

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Encouraging fans to adopt these new technologies has sparked a backlash.

Following announcements by music labels for boy bands including BTS and A.C.E of their plans to launch NFTs, fans questioned why these corporations would rally behind a burgeoning industry with a potentially negative impact on the world, at a time when many K-pop acts, including BTS, are rallying around climate action.

Many fans have also questioned the worth of digital ownership of content already available, be it video clips or artworks, given that fans already share supposedly “exclusive” digital content with one another that is often superior to the equivalent items available to them via official channels.

Some NFTs are more than mere digital collectibles, and entertainment companies and investors expect that this is what will ultimately attract fans, regardless of their concerns now.

Just as K-pop album sales often lead to access to fan signs in which small groups of fans meet their idols and ask them questions, labels are preparing to market NFTs as a means for fans to interact with their favourite stars.

One such NFT will be launched this month. The South Korean platform Featured, which operates on the Binance smart chain, will unveil a K-pop NFT line on Nov 23 in collaboration with the start-up KStarLive.

Fans will be able to buy “The Show FanBox NFT Collection”, a set of short clips of K-pop stars appearing on The Show, a weekly music programme on South Korean channel SBS.

The collection will be focused on K-pop acts Wei, Woo!Ah!, Kim Jae-hwan, B.I. G, and Pink Fantasy. Fans who invest in higher-priced items will gain access to The Show’s live performances.

This article was first published in South China Morning Post.