K-pop companies' (JYP, YG, SM) earnings are 'Up&Down' in second quarter

K-pop companies reported mixed second quarter earnings as JYP Entertainment and YG Entertainment fended off economic uncertainties by selling concert tickets and subsidiaries, while SM Entertainment shrunk due to selling a subsidiary last year.

JYP Entertainment's net rose, YG Entertainment turned around from a deficit, and SM Entertainment's net fell compared to the previous year.

JYP Entertainment, second largest K-pop company by market cap and home to girl group Twice, posted a 15.1-billion-won ($11.5 million) net profit during the April-to-June period. It was 214.9 percent higher than the year prior but below the 16-billion-won consensus compiled by FnGuide.

Revenue came in at 67.7 billion won, up 67.1 percent on year and higher than analyst expectations of 65.1 billion won. Operating profit was also higher than the market consensus, standing at 24.2 billion won.

JYP's strong performance was credited to the concert ticket sales from the world tours of girl group Twice and boy band Stray Kids, along with the 600,000 copies of albums sold by Twice member Nayeon’s solo album that was released on June 24.

Girl groups Twice and ITZY will each release a new EP, and boy band Stray Kids will release a digital single in the third quarter. Twice will additionally roll out a Japanese full-length album by the end of September.

YG Entertainment reported a consensus-beating 8.6 billion won in net profit, turning around from the 1.6-billion-won loss from the same period last year.

However, the turnaround was not from its artists but from selling its golf subsidiary Greenworks for 18.8 billion won in April.

The company, agency of K-pop bands Blackpink and Big Bang, had only one newly-released album during the second quarter from its boy band iKON. Revenue decreased by 9.1 percent year-on-year, standing at 76 billion won in the second quarter of this year. Operating profit also fell by 10.7 percent on year to 9.3 billion won.

Analysts forecast a sunnier third quarter with Blackpink making a comeback for the first time in two years on Sept. 16 with the full-length album “Born Pink.” The band will embark on a world tour starting October.

SM Entertainment posted a decrease in revenue, net and operating profit due to a smaller number of artists releasing new titles compared to the previous year.

The company, home to groups aespa and NCT, posted 25.4 billion won in net profit, higher than the 14.8-billion-won consensus but 67.8 percent lower than the second quarter last year. Revenue came in at 184.4 billion won, down 1.1 percent on year, and operating profit at 19.7 billion won, a 28.4 percent decrease on year.

The net decrease was due to a reversed base effect after selling shares of its subsidiary Dear U for 66.2 billion won in April last year, according to SM Entertainment.

Third quarter earnings are likely to improve, as the company released albums from aespa and Super Junior last month and Girls’ Generation on Aug. 8.

“K-pop albums are expected to reach record sales volumes again this year,” said Lee Hwan-wook, analyst at IBK Securities. “Entertainment companies with rich artist portfolios are expected to bounce back in the latter half of the year.”

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

Source: https://koreajoongangdaily.joi…nt/20220816192519372.html

the most important thing I learned was that YG has a golfing subsidiary!!!

Quote from bartkun

* had!

they've sold it lol

now golf fans should say

YG stop spending money you earned thanks to my golf favs

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I wonder if there are any golfing fans on AKP

Quote from bartkun

don't know

but I like what JYP is doing

they just need to debut new boy group

and continue with TWICE solo's, and units

and they will grow in a smart way

I haven't seen the actual numbers but one thing I'm always interested in is how much of each company's revenue is paid out to their artists as "wages"

like does a company making more profit mean it's paying it's artists less thus the company is making more profits or if a company has less profits does that mean it's artists are earning more money etc etc

Quote from bartkun

I don't think it works that way

usually from what multiple people from KPOP world said in interviews

idol signs a contract with agency

and contract says that (for example)

If CD is sold for 10 USD

then 3 USD goes to agency and 7 USD goes to artist

(that's just simple example remember about taxes, and split between group members)

but to sum it up it's from 7:3 to 3:7 ratio

it's like that:
Idol gets 70% and agency gets 30%

Idol gets 60% and agency gets 40%

split is equal

idol gets 40% and agency gets 60%

Idol gets 30% and agency gets 70%

it's all in that very first contract that trainee signs when he/she learns that he/she managed to pass all evaluations and made it to the group and will make a debut so must sign a 7-year long Idol contract

then if agency is good and well known the higher chances are that Idol will earn proper money

but the smaller and lesser known agency the higher chances are that company takes huge amount of money and Idol is paid pennies

one problem is that if you sign that 3:7 contract and group hits daebak then you might be known but you won't really earn any proper money

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true true but that's just for albums though? like generally speaking for CFs and non album related revenue my understanding is that the artist gets more of the cut so to speak???

I would love to know the breakdowns but I don't think kpop companies are that transparent

Quote from call-911

It's literally a contract between the artists & their company. The public has no rights to this matter. The bottom-line is the bigger the group the bigger their negotiation power is. And what % they get in their revenue streams will only be revealed unless artists sued the company like profit disputes or related to money. Just look up TVXQ's contract that was 'leaked' by the court when they sued SM.

of course but what about artists that were disgruntled or even long after their contracts had expired there must be a lot of former idols that could reveal such information no? or maybe they still get along with with said company and choose not to...

Quote from call-911

Contracts have NDA clause. It's not like they can just say anything.

I understand that but also that there's lots of disgruntled former idols and idols who have moved on and whatnot

and NDA clauses generally have time limits or set periods like they don't last forever (to my albeit limited knowledge)

it's just interesting that no idols has come out to publicly say this was in my contract etc etc