K-pop agencies back in business with booming results in third quarter

Industry

Published: 14 Nov. 2022, 17:49 Updated: 14 Nov. 2022, 20:09

K-pop agencies back in business with booming results in third quarter

Boy band Stray Kids [JYP ENTERTAINMENT]

K-pop agencies had a blow-out third quarter with new albums and the resumption of offline concerts.

JYP Entertainment, the second largest K-pop agency trailing only behind HYBE and home to K-pop groups Twice and Stray Kids, reported a 35.8 percent increase in net profit in the July-to-September period year-on-year.

Its net profit came in at 22.5 billion won ($17 million), beating a 21-billion-won market consensus compiled by FnGuide. Revenue rose 66.2 percent to 95.1 billion won in the third quarter, also beating the analyst forecast of 85.8 billion won.

Increased revenue from concerts, totaling 7 billion won, led to higher merchandise sales, which soared by 469 percent compared to the same period last year, according to JYP Entertainment.

JYP artists have been actively performing and releasing music this year, including girl groups Twice, ITZY and NiziU. Stray Kids has been on its second world tour since last April, and most recently finished a concert in Jakarta on Sunday. The band will set off again next February starting in Bangkok and travel to Singapore, Australia and the United States.

Four new acts are to debut next year in Korea, China, the United States and Japan.

SM Entertainment artists at the ″SMTOWN Live 2022: SMCU Express @Suwon″ concert held on Aug. 20 in Suwon, Gyeonggi [SM ENTERTAINMENT]

SM Entertainment’s net profit skyrocketed by 129.5 percent during the July-to-September period compared to the previous year, with increased music consumption thanks to loosened social distancing rules. The company is home to bands aespa, Red Velvet, NCT and Exo.

Its net profit came in at 29.2 billion won ($22.1 million) in the third quarter, beating analyst expectations of 18.7 billion won.

Revenue also surpassed analyst forecasts, standing at 238.1 billion won — 65.4 percent higher than the third quarter of 2021.

Concert revenue jumped by 1,315.3 percent from July to September last year to 10.9 billion won this year. Album and music revenue also increased by 14.5 percent on-year to 72 billion won this year.

SM Entertainment held an offline concert with its artists titled “SMTown Live 2022: SMCU Express @Human City_Suwon” on Aug. 20, the first of the SMTown series since 2017. Some acts also held solo concerts, such as boy band NCT Dream and singer Onew.

New releases in the fourth quarter include those from singers Seulgi, Chen and BoA. Girl group Red Velvet will drop its eighth EP “The ReVe Festival 2022 – Birthday” on Nov. 28.

Girl group Blackpink welcomes the audience during a concert held at the American Airlines Center in Dallas, Texas, in October. [YG ENTERTAINMENT]

YG Entertainment, home to girl group Blackpink and boy band Big Bang, reported that its net profit soared 2,633 percent in the third quarter compared to the same period a year prior, coming in at 15.4 billion won.

Revenue came in lower than the 120.4-billion-won market consensus at 114.7 billion won, which was 33.4 percent higher than the year before. Of the total, 19.4 percent were from albums and 18.3 percent were from digital content.

No concert income was calculated despite its boy band Winner holding six performances in Japan in July, because it usually takes a quarter or two to balance overseas accounts, according to YG Entertainment.

Analysts cited the same reason for its expectations of higher revenue in the fourth quarter, because the income from Blackpink’s latest album, released on Sept. 16, is likely to be accounted for by the end of the year.

But analyst Park Ha-kyung from Korea Investment & Securities warned that the company’s dependence on the girl group could be a potential risk. The company did not give a breakdown of revenue, but around 61 percent is expected to have come from Blackpink.

“Blackpink took up 92 percent of YG Entertainment’s third-quarter album sales, and boy band Treasure showed reverse growth in album sales, going from 540,000 for its last release to 400,000,” Park said.

“The company was given a high valuation in the past due to its dominance in the North American market, but that seems to be limited to only Blackpink at the moment. Treasure’s growth and the success of the newly-debuting girl group will be the deciding factor of the company’s stock prices.”

The new girl group Park referred to, tentatively named Baby Monster, is set to debut next year, though a date was not given.

Last week, HYBE reported a consensus-beating 91 percent on-year surge in net profit during the third quarter this year. The company’s July-to-September net came in at 94.9 billion won, beating the 47.2 billion won forecast.

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