K-pop has grown into a $5 billion business with an international fanbase over the past five years. Now a major Korean music label said it wants to use blockchain technology to help its stable of K-pop superstars get closer to their fans.
At the Upbit Developer Conference 2019 in Inchon, Korea on September 4, SM Entertainment announced plans to launch a blockchain connecting its artists to fans. This might include a cryptocurrency utility token that could be used to let fans support favorite singers and also allow the bands to reward fans, said Sang-Sik Joo, the head of the company’s technology division CT-AI Labs.
SM Entertainment’s roster includes leading bands such as Red Velvet and EXO. Leveraging a K-pop band’s global popularity can be quite lucrative since the genre’s fans are known for their exuberance. Top boy band BTS (which is with a different label) had two No. 1 albums on the Billboard 200 in 2018, and one of its songs racked up 35 million views in 24 hours, beating out Taylor Swift’s hit, “Look What You Made Me Do.”
While details were sparse, Joo said that SM Entertainment intended to build its own mainnet blockchain, according to the Chosun Ilbo, a Korean news outlet.
K-pop stars are hardly the first entertainers to use blockchain platforms and cryptocurrencies to connect with fans.
On September 1, boxing great Manny Pacquiao launched his own cryptocurrency, the Pac token, which fans can use to buy merchandise and interact with him on social media, The Guardian reported. Pacquiao, who is also a singer and Philippine senator, announced the plans at a free concert in Manila.
The Pac token is listed on Singapore-based Global Crypto Offering Exchange (GCOX). The decentralized exchange (DEX) has its own blockchain, Acclaim, which is a platform for celebrities who want to use cryptocurrencies to build, rebuild, and monetize their fans.
GCOX already counts celebrities like singer Jason Derulo, English footballer Michael Owen, and tennis star Caroline Wozniacki as clients with their own GCOX tokens, according to Reuters. In August, GCOX added LaLiga, Spain’s top football league and home of FC Barcelona and Real Madrid, as a client. The league intends to offer merchandise, tourism packages, and experiential events including player interactions in the Middle East and Asia, according to The Economic Times, an Indian media outlet.
Not all of these cryptocurrency deals have gone well. Boxer Floyd Mayweather and musician DJ Khaled were fined a combined $767.,000 in late 2018 by the U.S. Securities and Exchange Commission (SEC) after failing to disclose fees earned for promoting an allegedly fraudulent initial coin offering (ICO) from Centra Tech on social media. Mayweather predicted big returns from cryptocurrencies, tweeting “You can call me Floyd Crypto Mayweather from now on,” according to the SEC.
On April 2, 2018, the SEC charged Centra Tech’s co-founders with fraud for raising $32 million in an ICO for its CTR Token, which the agency claimed was an exit scam. The U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Sohrab “Sam” Sharma and Robert Farkas on the same day.