by Recently, entertainment companies are expanding their feet in new markets such as metaverse and non-fungible tokens (NFTs). It is cooperating with companies with related technologies and making strategic investments worth billions of dollars. Regarding this trend of entertainment companies, some critics say they have ‘caught two rabbits at once,’ such as synergy in new business and increased equity value.
On the 25th, Korea Investment & Securities issued a report titled ‘Let’s pay attention to the investment flow of entertainment companies’ and said, “In the past, entertainment companies focused only on nurturing their idols, but that has changed. Recently, the popularity of K-pop has spread all over the world. It is necessary to efficiently respond to the rapidly growing target market,” he said.
This month, Hive signed a primary contract with, an artificial intelligence (AI)-based content solution company, and invested 4 billion won. In addition, it secured a 2.48% stake at 500 billion won through an equity swap with Dunamu. In the case of YG, its grand subsidiary, YG Investment, recorded an operating profit of 8 billion won in the third quarter of this year through the sale of a stake in the augmented reality (AR) company Max (69,700 -3.33%).
JYP (47,400 -5.01%) established a joint venture between SM (70,000 -5.66%) and BLC, an online concert company, in August last year and has invested in Naver Jet. Dear You (74,500 -3.50%), and Forby Four. In the case of Dear You, which invested 21.4 billion won, its current equity value is about 325.6 billion won (21.2% stake) thanks to its booming stock market debut.
Last year, Hive, JYP, and YG, all three entertainment companies, invested in Naverjet. Naver Jet is rapidly growing in size as the operator of ZEPETO, Korea’s representative metaverse platform. Hive’s investment amount is 7 billion won (4.26% stake), the highest among the three companies.
Park Ha-Kyung, a researcher at Korea Investment & Securities, said, “As the global K-pop fandom is rapidly expanding, entertainment companies are seeking efficient business expansion through cooperation based on the strategic investment. Investors also need to pay attention,” he said.
