"Music streaming currently accounts for only about one-third of our total revenue. We aim to diversify our revenue structure around fandom-linked businesses and position ourselves as a company that contributes to artist growth."
Lee Ki-young, CEO of Dreamus Company (060570.KQ), emphasized the need to transform the music platform business model during a recent interview with Seoul Economic Daily at the company's headquarters in Gangnam, Seoul. Dreamus Company, which operates FLO—one of Korea's top three music streaming platforms alongside Melon and Genie—is accelerating its expansion from a streaming-centered model to an integrated fandom-based music business. "Beyond streaming, businesses including music and album distribution, production, marketing, concerts, merchandise (MD), and fandom infrastructure account for two-thirds of our total revenue," Lee said. "Our business structure has already expanded across the entire music value chain, and about 20% of this is generated in the global market."
Lee joined Dreamus Company as CEO last December after serving as co-CEO of bemyfriends. With his experience in the fandom platform business, he is being credited with fully launching a strategy that combines music platforms with fan businesses. He dedicated roughly four months after his appointment to restructuring the business. "In the past, each business was fragmented, but from the artist's perspective, everything from music production to distribution, concerts, and fan activities is one career," he said. "Integrating this entire flow into a single structure has been the key task."
Dreamus Company is now in full swing building a "full value chain" that encompasses music planning, distribution, platform, marketing, concerts, and fandom business. The strategy is to expand its role beyond a simple music streaming platform to become an operator that designs the artist's growth trajectory. The core strategy is the "superfan." "It is important to transform light fans, who simply listen to music, into 'superfans' who also attend concerts and purchase merchandise," Lee said. "We will advance our revenue structure through the expansion of 'fandom commerce' that combines digital and offline experiences."
Recent changes in the ownership structure are aligned with this strategy. Fandom platform bemyfriends acquired Dreamus Company shares from SK Square last November, becoming the largest shareholder with a 31.35% stake. SK Square is the second-largest shareholder with 22.17%, while Neospace and SM Entertainment are also among the major shareholders.
Lee explained the combination of Dreamus Company and bemyfriends using the terms "fan experts" and "music experts." "Music experts" refers to Dreamus Company's music platform and distribution capabilities, while "fan experts" refers to bemyfriends' fan data and community capabilities. "A structure in which the two organizations move as one team and focus on artist growth will become the new standard in the music industry," Lee said.
Dreamus Company is indeed strengthening its fan experience expansion model, including concert fan club recruitment, presale support, and merchandise and commerce integration. In its revenue structure, fan commerce including MD accounts for about half, moving away from a simple streaming-centered structure. Lee said this model has been positively evaluated in recent discussions with global music distributors. "When I explained our business structure, the response was that it is a 'unique and persuasive position,'" he said. "Everyone is already aware of the superfan-centered music market, but few operators have actually implemented it."
Dreamus Company's strategy now goes beyond simple streaming competition to changing the very standards of competition in the music industry. "Going forward, competitiveness will not be determined by how many songs you hold, but by how much you contribute to artist growth," Lee emphasized.
