K-pop has become a booming global phenomenon, but the K-pop industry has had a rough year.
Nothing shows this more clearly than the latest earnings numbers SM Entertainmentgenerally considered the second largest K-pop agency in South Korea, behind move.
SM revenue declines in third quarter Annual increase of 9.0% arrive 242.2 billion won ($178.6 million on a quarterly average basis), which the company attributed to lower album sales at its parent company and lower sales at its various subsidiaries.
The company reported gross profit of 73.4 trillion won ($54.1 million), down Annual growth of 30.9%while operating profit is 13.3 trillion won ($9.8 million), down Annual increase of 73.6%.
“Operating profit declined year-on-year due to lower album sales, weaker subsidiary profits, and the recognition of production costs related to the premiere episode of ‘Dear Alice,'” SM Entertainment CFO said. Zhang Quanmin said during the company’s earnings call.
Dear Alice It is SM Entertainment’s experiment in introducing the K-pop model into the Western music industry. The five-member British boy group was created by SM and British TV production company moon and return. In typical K-pop fashion, the band’s formation was filmed and turned into a reality show, Made in Korea: A K-Pop Experience. The show goes on bbc one August to September.
The parent company’s profits were particularly dragged down by falling album sales Annual growth of 35.7% arrive 72.9 trillion won ($53.8 million).
Zhang said on the earnings call that the sharp decline was the result of “a high base effect from the previous year.” New album sales drop to 3.6 million Q3 2024, compared to 8.7 million Same period last year.
However, the boom in the concert business offset much of the decline, with concert revenue growing significantly Annual increase of 55.9% arrive 38.2 trillion won ($28.2 million).
Zhang said this is the result of the increasing number of concerts and the internationalization of the concert business.
As an example of this success, CEO Zhang Zhehe Pointing out that SM girl groups are becoming more and more popular EspaAll shows from June to September in Seoul, Japan, Australia and other parts of the Asia-Pacific region are sold out.
Zhang announced that aespa’s tour will hit the United States and Europe in the first quarter of next year.
aespa hosted a total of 25 shows during the quarter; NCT dream Timing 13, Ruize There are 23 fan conferences, super boy 11 performances were held.
Merchandise sales and licensing are another bright spot for SM’s earnings, with revenue continuing to grow Annual increase of 31.1% arrive 37.9 trillion won ($27.9 million), benefiting from growth in concert-related sales.
SM’s subsidiaries have dragged down the company’s overall profits, but not to the same extent as the parent company’s own profits. Subsidiary departments recorded Annual growth of 0.4% Revenue fell to 121.8 trillion won ($89.8 million).
including a Annual increase of 26.9% revenue decline SM C&C (Culture & Content) is a talent agency, television production and travel company, 24.8 trillion won ($18.3 million), which SM attributed to a decline in advertising revenue.
Offsetting some of the decline was the Annual growth of 39.2% Revenue jumps kidongan artist management, marketing/licensing and television production company, 13.3 trillion won ($9.8 million), benefiting from the growth in sales of TV works.
During the earnings call, CEO Jang said the company plans to launch at least one new portfolio every year going forward, with one set to debut in the first quarter of 2025. ’s first girl group.
“We are building a solid lineup of artist IPs [across] K-pop for all generations, from existing artists who have been in the industry for a long time to newly debuted artists,” said Zhang.
“We hope this new girl group can help [strengthen] Our artist lineup is even richer.
“We are building a solid lineup of artist IPs [across] K-pop for all generations, from existing artists who have been in the industry for a long time to those who are just debuting. We hope this new girl group can help [strengthen] Our artist lineup is even richer.
Jang Cheol Hyuk, SM Entertainment
SM’s earnings were released on Tuesday (November 5), the same day as K-pop giant HYBE’s third-quarter earnings, the company reported Annual increase of 1.9% Revenue fell to 527.8 trillion won ($389.2 million).
HYBE blamed part of the decline on the Paris Olympics, which impacted the album’s release schedule this quarter.
Shares of K-pop companies fell amid inconsistent financial performance this year, with SM Entertainment falling by about 20.0% Year to date, as of Monday’s close, it was trading at 74,600 won, while HYBE shares were down about 17.2% So far this year, the transaction price as of Monday was 200,000 won.global music business
