Big Hit cashes in on BTS success

Big Hit Entertainment’s value is estimated to have hit 2.5 trillion won ($2.2 billion) on the back of the success of their most popular group, BTS.

According to a report from Hana Financial Investment released on Tuesday, the agency, which is unlisted on the stock market, is likely to see its revenue surge 149 percent compared to the previous year to 230 billion won and operating profit shoot up 155 percent year-on-year to 83 billion won.

“Record sales are estimated to be around 4.5 million as of August this year, a big increase from last year’s 2.7 million,” said Lee Ki-hoon, an analyst for Hana Financial Investment. “By the end of this year, record sales are expected to reach 5 million.”

The analyst said YG Entertainment, the agency of popular boy band Big Bang, made 264 billion won in revenue in 2017, the year the group held its last performance before some members began their military service. It was their 12th year as a group.

“When considering that Big Bang contributed roughly 80 percent [of YG’s revenue that year], which would amount to 210 billion won, BTS, which is in its sixth year, could easily rake in 450 billion won in revenue in the future,” Lee said.

The analyst noted that overseas sales will likely be larger than local sales as the boy band is currently the most searched musical artist on YouTube in the United States.

“Thanks to [the band’s] rapid ascension on music platforms including YouTube, iTunes and Spotify, related revenue will see a 100 percent increase compared to a year ago,” Lee said. “Next year, due to higher prices and increases in subscriptions, revenue from local music platforms will see a 30 percent increase.”

The report noted that thanks to the large influx of global fans, BTS’s latest album has already reached 1.93 million sales.

“Thanks to the growing global fan base, the agency has been able to improve its gross profit margin with the sharp increase in revenue with very little effort or additional advertising expense,” Lee said.

Next year the operating profit is estimated to be roughly 130 billion won, while net profit should hit 90 billion won.

BTS topped Japan’s Oricon weekly album chart last week. According to Oricon on Tuesday, the Korean boy band’s latest album, “Love Yourself: Answer” was ranked at No. 1 for the week between Sept. 3 and Sept. 9.

This is the fourth time that the boy band has ranked top on the Japanese music chart. The album charted at No. 1 on the Korean music chart Gaon in August and earlier this month ranked No.1 on the Billboard 200 and the Billboard Artist 100 charts.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]