The South Korean business behind K-pop superstar BTS has benefited from online merchandise sales and licensing fees, reporting large quarterly profits despite the coronavirus pandemic that has paralyzed concert ticket revenue.
Haile said Thursday that sales increased 80% year-on-year to KRW 278.6 billion in the first quarter of April-June, and net profit was KRW 20.8 billion, up 10% year-on-year.
The company expects to generate more profits in the second half of the year by increasing sales through the application. Fans use the Hybe app to watch BTS videos, sign up for online services, and shop for merchandise.
Analysts say the long-term prospects for the K-pop industry are bright as it becomes a growing economic force with catch-up rhythms, synchronized dance routines, and a global fascination with social media savvy. The stock price of Hibe, listed in Seoul, has risen 88% this year.
After the earnings announcement, CEO Park Ji-won told analysts, “We expect sales to increase significantly in the second half of the year due to the launch of new products in the second quarter.” “We will continue to explore new business opportunities in all areas of our lifestyle.”
The 7-member boy group BTS, which debuted in 2013, expands its fan base outside of Asia with hit songs such as ‘Butter’ and ‘Permission to Dance’ this year. ‘Butter’ topped the Billboard Hot 100 for nine weeks in a row, ranking based on album sales and airtime.
Hybe has stepped up its efforts to diversify its revenue streams and secure musical talent. In April, it announced it would acquire Ithaca Holdings, the American media group that succeeds Justin Bieber and Ariana Grande, for $1 billion.
Hybe recently signed a $1 billion deal with Ithaca Holdings, the American media group behind Justin Bieber. Photo is from 2016 © Reuters
The company is investing heavily in the Weverse online community, which hosts content from popular artists. South Korea’s most popular girl group Blackpink, run by rival YG Entertainment, joined Weverse this month, with Bieber and Grande expected to join later this year.
DS Investment & Securities analyst Lee Ji-Hyeon predicted that Hibe’s operating profit and sales would increase by nearly 60% this year to 235 billion won and 1.3 trillion won, respectively.
Park Seong-ho, an analyst at Yuanta Securities, said in a recent report, “If major artists from YG and Ithaca Holdings join Weverse, the value of Weverse as a leading entertainment platform will be highlighted.”
Hive said he would continue to be involved in high-level decision-making as chairman even after founder Bang Si-hyuk, who became a billionaire in a $3.9 billion IPO last year, stepped down as CEO in July.
“Hebe’s financial health is continuously improving. [its] An industry official said, “Once offline concerts resume, the growth and situation of the platform business will improve. However, investors should pay attention to whether these groups can continue to produce successful newcomers.”