Hybe, the South Korean company behind BTS, saw its quarterly revenue rise 31% in the three months to September but saw its operating profit fall 8%. Total sales reached KRW 446 billion (US$314 million). Operating profit was reported at KRW 60.6 billion (US$43 million).
Promotions directly involving artists – album sales, concerts, advertising, etc. – generated KRW 206.2 billion in revenue. New releases by artists such as Seventeen, Enhypen, NewJeans and j-hope were valued at KRW 129 billion and accounted for most of the total revenue. The concert revenue for the Seventeen and Tomorrow X Together world tour was KRW 47.2 billion.
The revenue categories excluding artist support – merchandise sales, licensing, content, fan club, etc. – totaled KRW 239 billion. Among these businesses, merchandise sales and licensing accounted for the largest share at KRW 115 billion, while the content business with the BTS DVD “BTS Island: In the SEOM” generated KRW 107.2 billion.
The company blamed the drop in profits on production costs for a new audition program that brought to light promising new artists and in-person concerts.
Hybe anticipates that such investments and larger concerts will naturally increase profitability in the future.
The company said last month that members of the BTS band will be signing up for military service starting in the current quarter, meaning the band may not be operating as a full entity until 2025. While Hybe promotes the idea that it has diversified its operations, investors were spooked by the idea of a BTS hiatus over the summer.
In the latest earnings announcement, Hybe said it was considering buying back some of its listed shares and paying a dividend. Both are signs of a mature company that has left the rapid growth phase behind.
The company said it “provided a blueprint for its corporate strategy and leveraged its multi-label structure in bidding. Hybe plans to roll out this system in Japan and the US, most notably through the successful debut of &TEAM in Japan, and a new global girl group expected to debut through an audition project in the US next year. Hybe uses this structure to discover promising companies related to music IPs by establishing joint ventures or M&A activities.”
https://variety.com/2022/biz/news/hybe-profits-in-third-quarter-1235422010/ Hybe third quarter earnings down