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Side notes before beginning…
Next month I will be in Bulgaria 🇧🇬
TradeInformer is doing a drinks event with Devexperts at their Sofia HQ on Nov 7th. Please let me know if you would like to attend.
Also we have a new video out with TraderEvolution. You can watch it here.
Now on to this week’s post.
Exness and K Pop
The past couple of weeks I had to get planes and when I do that, I often end up buying the New Yorker for in flight reading. This is partly because I’m pretentious but also because it makes for good reading, assuming you avoid any of the articles that are about politics.
Anyway, flying to Cyprus last week, there was a great piece about HYBE. This is the Korean music production and promotion business behind the K Pop band BTS, who I’m sure you are all big fans of. They have been expanding into the US more recently and the article is mainly about how they have achieved this.
Like other New Yorker articles, this is a long piece and I recommend reading the whole thing to get the complete picture. But as my brain is wired to think about CFDs too much, I was struck at how there are some good lessons to learn from the way HYBE does business and parallels with the Exness Team Pro campaign, among other things.
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Creation
A key part of HYBE’s method is effectively to find personas, whether that’s to do with looks, personality, voice, and so on. They then take this person or persons and make them into a band by building a story around them. This is not new – think of the X Factor – but HYBE does it in a much more detailed and ‘21st Century’ way.
One of their most recent ‘inventions’ is the band Katseye. To create the band, they made a reality TV show style contest to figure out which of the singers people actually liked and which were most malleable from the company’s perspective.
The whole thing was done via Weverse, which is an app that HYBE set up. App users can message artists directly, subscribe to them, watch ‘live’ shows on the app, and buy tickets + other band merch.
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There are a couple of interesting points here. One is that there was a clear balance between taking audience feedback and then making sure that the band would ‘work’ for the company. In other words, there is a kind of push and pull between feeding the customers a product and also using them to improve that product. If you think of CFDs, you need to plant the idea of trading in someone’s head but you also need client input to make your product better.
The other striking point is that the whole purpose of the show was to build hype around the band. It gives each band member a story and a more in-depth persona. If you look at HYBE historically, they have always done this. For example, BTS had a YouTube channel before they released any music.
HYBE founder Bang Si-hyuk says in the article that the strategy is to “trying to figure out the most fandom-friendly thing to do and then taking it to the extreme.” Combine this with fan input and you see a lot of parallels with the ‘customer focused’ points that IG Group’s CEO has been making constantly since he joined the company.
Another HYBE executive notes that they are trying to make the band members as ‘real’ as possible to tap into the same mechanism that makes people fall in love. Cynical stuff, eh? But also smart as well.
A major reason that HYBE does this is to build a stronger, deeper brand. And this is where I think the parallel with Exness Team Pro is interesting. It is very easy to find some guy with a popular Instagram account and get them to shill your brokerage.
What Exness did was to take that and (1) make them have a deeper, more professional persona and (2) tie it to their brand. Whatever the Kojo Forex guy does now, for example, he will be tied indelibly to the Exness brand. Exness is like the band, the pro team are its members.
You could argue that tastytrade did something similar. They built up a personality-based media brand, which they then transformed into a brokerage. So much of that business is based on them having created media personas that converted clients. Each persona has a story that you relate to and feel is ‘genuine’.
Much like Katseye, the Exness Team Pro members are also clearly people that are (1) already social media savvy and (2) fit with their target markets. As noted, HYBE claims that Katseye members were audience selected but when you look at how they are all different ethnicities / from different parts of the world, you get the impression it was more about having a band that could have better reach into different geographies. Or maybe I’m just cynical.
App chat
Weverse is another interesting component of how HYBE engages with its audience and I recommend downloading it just to see how it works and what its features are.
It was developed in large part because HYBE wanted more visibility on where listeners were based, what they liked, and so on. Previously other platforms, like Spotify, would steal that information for themselves. It was also a way of removing band members from the toxicity of other social media platforms.
I would argue its success – it has >10m users – fits with a wider trend you see in social media, which is that people like platforms that are more interactive and which let them connect with public figures or companies directly. X, Telegram, Discord, YouTube live streams, Kick, and Twitch are all examples of this, as is Onlyfans, albeit in a more salacious way.
At the same time there is an endless craving for something ‘real’ and ‘genuine’ from companies and public personas. The aforementioned platforms all help to facilitate this for media personalities. For example, today you can hear from Elon Musk directly, unfiltered and instantly, rather than through a newspaper and via a PR person. This has also been the strategy of Zuck from Meta over the last two years or so. He has done less press and more podcasts and other direct media. He comes across more ‘genuine’ and personable by doing so.
Looking solely at the trading industry then Discord is probably the most relevant platform, in terms of being able to facilitate both the desire for interaction and fostering more of an ‘authentic’ persona from the company. Clients can interact with people at the company directly, as well as with other clients on the platform. This is something prop has done extremely well.
HYBE’s approach is more interesting because they actually own the platform, meaning they have a lot more visibility on where clients come from, what their behaviours are, and so on.
Maybe Discord will suffice but it would be interesting to see if a broker could build their own app with some of these sorts of features. The obvious problem here is that it would take a lot of investment and potentially not work, plus you have many more compliance things to think about compared to HYBE artists on Weverse. Nonetheless, I look at that Weverse app and something there feels like it is transferable to the CFD world. Exactly what that is I don’t know. I’ll leave it to all of you to figure that one out.
Fake world
One brief point that is also mentioned in the New Yorker article is the Vtuber concept. This is basically where motion capture technology is used to generate an animated character or it is literally just an anime character. These characters then perform music. These are already popular in Japan and their ‘concerts’ make millions of dollars from streaming.
The most popular one I can see in Japan is called Gawr Gura and has almost 5m YouTube subs. No I’m not making this up. Apparently HYBE is looking at launching these to get more money.
The interesting thing about this concept is that something like this already exists in the CFD industry. If you go on Japanese YouTube and look for high leverage trading, you will get loads of weird anime videos, usually promoting XM or Exness.
For example, here is one YouTube channel which works with XM in Japan. The channel name is something like ‘The Road to Becoming a FX Millionaire’. It has almost 100k subs and some videos have hundreds of thousands of views.
Most of the videos seem to be two anime 10 year old girls, one of whom may be a witch, talking to each other in text-to-speech generated voices. Yes, I am serious.
Of course, if you do this you can also stay anonymous. No comment on why you would want to be doing that. But regardless, it’s interesting to see that you could today just make up a virtual character and then see it grow into something massive. This is presumably only becoming easier to do, given advances in AI-generated video.
Could it work outside of Japan? I personally would not recommend trying that for Europe and the UK for an offshore brand. Nope, no way. No way at all would that work…