Blackpink concert brings record profits to management company

With a revenue of more than 260 million USD, Blackpink's concert became the main factor helping YG Entertainment's operating profit reach its highest level in history.

According to the recent consolidated financial report, YG Entertainment (Blackpink's management company) achieved a total revenue of nearly 460 billion won (about 352 million USD) and an operating profit of more than 86 billion won (more than 66 million USD) in the first 9 months of the year. These two indicators increased by 73% and 146% respectively compared to the same period last year. The above results exceeded the figure for the whole year of 2022 and reached the highest level in the company's 27-year history.

YG Entertainment recorded a remarkable growth in its concert business. Cumulative revenue for the first nine months reached 105.1 billion won, up 362% compared to last year's revenue. According to the explanation, domestic concert revenue accounted for nearly 98 billion won, including ticket sales and ancillary revenue. Overseas concert revenue accounted for more than 7 billion won, recorded based on the amount paid by local organizers, with different rates depending on negotiations in each country.

The recovery of concert business activities has had a positive impact on sales of idol-related products (merch). After the performances, the company also released DVDs, photo books, theatrical documentaries, and related items. Thanks to that, the commercial and product revenue increased to 157.5 billion won, a slight increase compared to the whole of 2022.

According to Hyundai Motor Securities, YG Entertainment estimates Blackpink's revenue share in 2023 to be 63-75%, and its operating profit to be more than 85%. The analysis team believes that although YG Entertainment's album sales decreased compared to the same period last year, the number of concert attendees increased significantly thanks to Blackpink's tour, leading to an increase in total revenue.

"Operating profit jumped thanks to an increased proportion of revenue from concerts, which bring in higher profits than albums or music copyrights," Hyundai Motor Securities said.

Blackpink takes a souvenir photo after the end of the show in Hanoi, July 2023. Photo: YG Entertainment — Blackpink took a souvenir photo after the end of the show in Hanoi , July 2023. Photo: *YG Entertainment*

YG Entertainment did not explain in detail, but Korean analysts said that Blackpink and the Born Pink global tour accounted for an overwhelming proportion of the business results. Born Pink World Tour is Blackpink's second tour, starting in mid-October 2022, with a tight schedule in Asia, Europe, North America and Oceania. The group has a total of 66 shows. The total revenue of the tour reached about 260.6 million USD with nearly 1.5 million tickets sold, as of October. On average, the group earned more than 4.65 million USD per show with about 26,500 audiences.

In Asia alone, the group performed 30 nights, selling more than 1 million tickets with a 100% occupancy rate. Total revenue in this market reached nearly 164.5 million USD. Thanks to that, Born Pink World Tour became the highest-grossing tour by a female artist in Asian history. In Vietnam, Blackpink's two concert nights at the end of July at My Dinh National Stadium sold 67,443 tickets, with a 100% occupancy rate. Total revenue brought in nearly 13.7 million USD (equivalent to more than 331 billion VND).

However, recently, Korean media reported that only Rosé renewed her contract with management company YG Entertainment. The remaining three members, Jisoo, Jennie and Lisa, will likely sign with other companies. In the third quarter financial report, the company said that it is in the process of negotiating a contract extension with Blackpink and will announce it after it is completed. Hyundai Motor Securities Company stated that if Blackpink's comeback is canceled, YG Entertainment will have no other scenario other than declining business results.

According to Korea's The Bell , the impact of Blackpink's hiatus has already happened. In the fourth quarter, all Blackpink members were inactive, except for Jennie. YG Entertainment is expected to record 579.1 billion won in revenue and 93 billion won in operating profit next year. Compared to this year's estimated business results, revenue will increase by nearly 3% but operating profit will decrease by about 3.3%. This scenario is in contrast to Hybe Corporation and SM Entertainment - these competitors are expected to continue to achieve double-digit growth in revenue next year with strong profit growth.

Little Gu

Source link