Understanding the economic impact of BTS — and its ARMY of fans

South Korean band BTS is currently in the U.S. as part of their first world tour after a four-year hiatus. Their fans, known as ARMY, are extremely loyal, and the concerts are attracting hundreds of thousands of attendees.

Those throngs of fans include Susan Schmidt, portfolio manager at Exchange Capital Resources. A regular contributor to “Marketplace Morning Report,” she just attended two BTS performances in Chicago and joined host Kimberly Adams for more on the band’s broader economic impact. The following is an edited transcript of their conversation.

Kimberly Adams: Susan. How long have you been ARMY?

Susan Schmidt: Several years, and one would say I'm late to the ARMY crowd. So we have devouted followers of BTS within ARMY and fans that have been there since their launch in 2013. So a large influx of ARMY fans joined between 2015 and 2020.

Adams: So, taking off your fan cap for a minute and putting your economist hat on, what kind of economic impact is this tour having in the cities, at least here in the U.S., where BTS is performing?

Schmidt: This is truly an economic phenomenon. I saw it firsthand. I now can see how this really relates to the economy. They did four shows in Las Vegas earlier this year, and the Las Vegas Convention Bureau says that that generated $340 million of economic impact for the city. For their 85 shows across 35 cities worldwide, all of the tickets are already sold out. North America had 31 shows in 12 different cities. It's expected to generate $5.3 billion of economic benefit to the global economy.

Adams: Last month, when it was announced that BTS would be headlining the World Cup, shares of the entertainment agency Hybe, which is associated with the group, jumped 7%. Can you talk about the role K-pop plays in the stock market?

Schmidt: I think K-pop is currently underappreciated in the stock market in terms of the economic impact. Hybe, their management company, is the easiest example because it's a direct impact to them based on BTS's notoriety. BTS is their largest group, and so that has the largest impact on their stock price. The consumer attraction to BTS and to K-pop in general really does have an economic effect on the society. As the fans travel from concert to concert, you get an international influx, because they have an international fan base.

What's interesting about ARMY is that they travel to each concert location. They stay, they buy merchandise, they contribute to the local economy, they explore the cities. Oftentimes, their concert venues are the same over three or four nights. That encourages a lot of tourism activity around the shows, and that's where we're seeing different businesses pick up. That could be a hotel chain, that could be a restaurant, but it does allow for true economic impact to flow through to these parent companies.

Adams: All right, I have to ask, how much do you think you've spent on your BTS and K-pop fandom?

Schmidt: Oh my gosh! I'm embarrassed to admit that. As a finance professional, I should know better that the internal rate of return on this merchandise is not high. In fact, it's negative. Yet, like every ARMY fan, I feel compelled to have some merchandise from each concert. And so I would safely say that most fans spend 100+ dollars in addition, and some well into the hundreds and perhaps $1,000. Merchandise is rampant, and not only directly for the band, but in the secondhand market; many independent shops find ways to do consumer-based merchandise around BTS, featuring the members, the logos, the theme. All of that also provides a microeconomy.