Hybe, the South Korean company behind BTS, enjoyed a 31% increase in quarterly revenue for the three months to September, but suffered an 8% fall in operating profits. Its top line revenue reached KRW446 billion ($314 million). Operating profits were reported as KRW60.6 billion ($43 million).
Promotions with direct involvement of artists—albums sales, concerts, advertisements, etc.—generated KRW 206.2 billion in revenue. New releases from artists including Seventeen, Enhypen, NewJeans, and j-hope, were worth KRW 129 billion, accounting for the largest part of the total revenue. Concert sales for both Seventeen and Tomorrow X Together’s world tour marked KRW 47.2 billion.
Revenue categories excluding artists’ promotion—merchandise sales, licensing, contents, fan club, etc.—totalled KRW 239 billion. Among these businesses, merchandise sales and licensing delivered the biggest portion, recording KRW 115 billion, while content business involving BTS’ DVD, “BTS Island: In the SEOM”, generated KRW 107.2 billion.
The company blamed the dip in profits on production costs for a new audition program that unearthed promising new artists and for in-person concerts.
Hybe says that it expects such investments and larger scale concerts will naturally enhance profitability in the future.
The company said last month that BTS band members will begin to sign up for their military service from the current quarter, meaning that the band may not operate as complete unit until 2025. While Hybe is promoting the idea that it has diversified its activities investors were spooked in summer by the idea of a BTS hiatus.
In the latest earnings statement, Hybe said that it was considering buying back some of its listed shares and paying out a dividend. Both are signs of a mature enterprise that has moved beyond the fast=growth phase.
The company said that it had “provided a blueprint for its corporate strategy, leveraging its multi-label structure at the call. It plans to instill this system in Japan and the U.S., especially through the successful debut of &TEAM in Japan, and a new global girl group anticipated to debut next year through an audition project in the U.S. Leveraging this structure, Hybe plans to discover promising companies related to music IPs through establishing joint ventures or M&A activities.”
From Variety US
