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Monday, April 15, 2024

Cube Entertainment signs $62 million deal with Kakao Entertainment

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Cube Entertainment signed an 80-billion-won ($62 million) music distribution deal with Kakao Entertainment, the agency said Wednesday.

Over the next five years, the Kakao subsidiary will get exclusive distribution rights for music from Cube Entertainment, which is home to girl group (G)I-DLE and boy band BTOB. Kakao Entertainment owns Melon, the largest domestic music service and second in terms of market share following YouTube music.

Cube Entertainment will use the proceeds from the deal for album production and related development. Kakao will pay 50 billion won at the outset and then the rest after Cube Entertainment generates revenue above an agreed-upon benchmark.

The agency and distributor will split revenue 70-30 for music downloaded and 65-35 for music streamed.

Cube Entertainment’s revenue has been growing steadily since 2019, a year after girl group (G)I-DLE debuted. Last year, it made 72 billion won in revenue, a 92-percent rise compared to the previous year.

(G)I-DLE is the most popular band from the agency. The group released two albums this year — “I NEVER DIE” in March and “I love” in October. The lead tracks from the albums, “Tomboy” and “Nxde,” topped major local charts and music programs in Korea and iTunes charts in multiple regions.

“This deal is evidence of the higher value that Cube Entertainment is being assessed at in the market,” a Cube Entertainment spokesperson said.

“We believe it will not be difficult to pull off the revenue target, as (G)I-DLE has been achieving its biggest success yet. The amount has given us the room to react better to the fast-changing market conditions.”

Kosdaq-listed Cube Entertainment fell more than 10 percent in trading Wednesday after news of the deal was announced.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]