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Friday, December 1, 2023

BTS agency HYBE reaches 1 trillion won revenue landmark

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HYBE's headquarters in Yongsan District, central Seoul [NEWS1]
HYBE’s headquarters in Yongsan District, central Seoul [NEWS1]

HYBE, the entertainment agency behind K-pop acts BTS and Seventeen, has reached the milestone of 1 trillion won ($761 million) in revenue in the first half of this year, backed by strong album sales and the resumption of in-person concerts.

In the second quarter alone, revenue rose 21.2 percent to 621 billion won, surpassing the market consensus of 595.1 billion won compiled by FnGuide. Revenue for the first quarter was 410.6 billion won.

However, quarterly operating profit for the April-June period sunk 7.9 percent to 81.3 billion won, but was still above the market estimate of 70.4 billion won.

Net profit jumped 18.7 percent on year to 117.4 billion won.

Revenue generated from the direct participation of its artists, such as album sales, concerts and advertisements, jumped 33.9 percent on year to 436.4 billion won, which constitutes 70 percent of the quarterly revenue.

The total number of album sales from January to June this year was 22.7 million copies, already exceeding the 22.2 million copies sold in 2022.

Its artists such as Suga, Tomorrow X Together, Seventeen, Le Sserafim and Enhypen have hosted, or will host, a total of 111 concerts in 27 cities this year.

Revenue generated from the indirect participation of its artists, such as from content featuring artists, merchandise and fan clubs, slightly dipped by 1 percent to 184.5 billion won.

However, quarterly operating profit dipped below 7.9 percent on year due to expenses related to BTS’s 10-year anniversary event, Festa, which lasted from June 12 to 25.

“BTS’s 10-year Festa was necessary as it is the group which made HYBE the company it is today, and [was also necessary] for ARMY [BTS fans],” said HYBE CEO Park Ji-won at an online conference call Tuesday. “We generously spent on the events’ technology and stages to fully immerse fans in the Festa experience.”

In June the agency’s fan community, Weverse, exceeded 100 million in accumulated app downloads since its launch in June 2019. In July alone, monthly active users exceeded 10 million. The agency is currently preparing to launch a subscription-based paid membership service by next year.

The agency is also outlining the global strategies of the American labels it has obtained through HYBE America.

A girl group debut targeting the North American market is imminent with HYBE forecasting various events planned to introduce the members’ identities in the third quarter. The girl group is co-produced by HYBE and Geffen Records, a subsidiary of Universal Music Group.

Revenue generated from Atlanta-based hip-hop label QC Media Holdings, which HYBE America acquired in March, started to be reflected in HYBE’s earnings from the second quarter as a consolidated subsidiary. Details of how much revenue from QC Media Holdings was reflected in HYBE’s earnings were not disclosed. One of its well-known artists, Lil Baby, embarked on a North American tour in July, which will be reflected in HYBE’s third-quarter earnings.

The K-pop agency said it is open to taking more independent labels under its wing.

“The line which defines what is K-pop and what is not is merging,” said Chief Financial Officer Lee Kyung-jun. “The concept of the K-pop genre in the global industry is ever-changing and infiltrating other music genres and in turn, I believe HYBE will not be merely defined as a K-pop agency in the future. So yes, we are open to acquiring new labels that will help HYBE expand its entertainment business.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]