Fernanda Ramirez

ECON 2010: Microeconomics

04/22/21

An Analysis of “HYBE”
 Company Profile

The company is named, “HYBE”. Under the company lies 6 music labels as well

as 6 other businesses, and also one content service, which they are all collectively known

as HYBE’s subsidiaries. HYBE was originally named “BigHit Entertainment” and only

had themselves, but they slowly bought other labels and grew larger and larger and

became HYBE (the korea herald). HYBE is mainly a South Korean music industry that

also has business in Japan and the USA. Bang Si-Hyuk is the company’s chairman and

CEO. He founded BigHit Entertainment (now HYBE) in 2005. Lenzo Yoon is the

company’s CEO in the Global and Business side, and Jiwon Park is the CEO of the

company’s HQ and management (HYBE).

 Consumer Demand

With the company being founded in 2005, they only had 3 music artists at the

time. Now in 2021, with HYBE having 6 different music labels, they have 14 music

artists under them, BTS included. BTS has been their biggest and most successful music

artist under former BigHit Music label, and with their huge success, Bang Si-Hyuk (the

chairman) slowly bought more subsidiaries to HYBE, including Ithaca Holdings from the

USA (Mamo, Heran), and became what they are now. Elasticity of demand with this

company honestly depends on the businesses within HYBE company. We will focus on

BigHit Music for now. BigHit Music label includes BTS, TXT, and Lee Hyun. BigHit

Music’s elasticity of demand looks pretty elastic. BTS and TXT are both kpop groups,

and with the amount of different merchandise and albums they sell whether the prices rise

up or down, the fans keep buying them, and demand actually keeps rising within the

years (Liu, Marian).

 Cost Structure

This company’s costs honestly seem like a lot, but they definitely also seem to

have the revenue for everything. A few fixed costs they have include the building they

own, salary for the employees. Other than those two, variable costs are what seem to be

the biggest costs for the company. These variable costs include, funding for the different

music acts within the company, supplies/clothing/stage production for the music artists.

With BTS being its biggest music group in the company, making about 90% of the

company's revenue in the first half of 2020 (bloomberg), it continuously keeps growing

from there as the company gets bigger and bigger. A reason why variable costs seem to

be the biggest costs for the company is because there are always different goals the

company has, and they all won’t cost the same at the same time.
 Market Structure

The market structure for this company is an oligopoly. Because the music industry

is an oligopoly and this company's biggest part is music entertainment, this is an

oligopoly. In South Korea, although there are quite a few music agencies you can join, it

is dominated by HYBE, and after them are called “The Big 3”. The big 3 are the biggest

kpop agencies after HYBE, and control a lot of the kpop industry. The big 3 used to

control over half of the kpop industry, but now HYBE is the agency that gains the most

revenue and has their superpower, BTS. There is a possibility that this company could

become a different type of market structure, but unless their biggest part of the company

are its music artists, it will stay an oligopoly for a long while.
 Citations

Herald, The Korea. “[Newsmaker] Big Hit Entertainment to Change Name to Hybe.” The Korea

Herald, 19 Mar. 2021, www.koreaherald.com/view.php?ud=20210319000808.

HYBE, hybecorp.com/eng/company/info.

Mamo, Heran. “Watch Justin Bieber, BTS & More Celebrate Joining Forces in HYBE & Ithaca

Holdings Deal.” Billboard, 6 Apr. 2021,

www.billboard.com/articles/news/international/9551706/bts-justin-bieber-j-balvin-celebrate-hyb

e-ithaca-holdings-deal.

Liu, Marian. “The Branding Genius of K-Pop Band BTS.” The Washington Post, WP Company,

3 Feb. 2020, www.washingtonpost.com/business/2020/01/30/bts-kpop-bighitentertainment/.

Bloomberg. (n.d.). Bloomberg.com.

https://www.bloomberg.com/news/articles/2020-10-15/bts-band-members-make-millions-as-big-

hit-shares-surge-in-ipo.
Fernanda Ramirez

04/22/21

A Reflection on Microeconomics: Econ 2010

One of the general outcomes I achieved while taking this course is I have developed the

knowledge and skills to work with others in a professional and constructive manner. While

taking this course, honestly all of the written assignments I have done have helped understand

the information about each module in this class. Yes I had to watch videos and read texts about

the certain module, but doing the written assignments helped me understand exactly how it is and

how because my brain is really thinking about it. I know to keep this knowledge I have to

practice it in my daily life, and with that it will help me in the future. Another general outcome I

achieved while taking this course is thought critically. I say this because while reading the texts

and watching videos, I was able to learn and understand about the certain topics that were

introduced and made me really think about how they are almost constantly used in everyday

business life. In order for me to even think about making a business, I have to think critically

everyday.

Before I took this class, I honestly never exactly knew what microeconomics was. I just

knew it had to do with something in the business world. Now that I have knowledge about

microeconomics because of this class, I was more interested in it than what I actually thought I

would be. I am not really one to enjoy watching videos, especially a lot for a class, but watching

each video for each module really gave me useful and interesting information. I honestly hope to

gain even more knowledge of microeconomics in the future because it really was interesting to

me and with that, I just know it will be useful for me in the future.