Big Hit Achieves Record Sales Without Concerts... "Will Strengthen Weverse Platform Competitiveness"

[Asia Economy Reporter Minji Lee] Big Hit Entertainment (hereafter Big Hit) posted record-breaking results in its first annual earnings report since going public. According to Big Hit Entertainment on the 23rd, last year's revenue reached 796.3 billion KRW, and operating profit was 142.4 billion KRW, marking increases of 36% and 44% respectively compared to the previous year. Although concert revenue sharply declined due to COVID-19, the strong performance of its proprietary platform ‘Weverse’ and increased album sales are analyzed to have positively influenced the favorable results.

Last year, payment amounts on the Weverse platform significantly increased to account for 41% of total revenue. Payments for MD content through Weverse alone approached 328 billion KRW. Since launching the service in 2019, consolidating the consumer base of fandoms through the Weverse platform and integrating content distribution and commerce functions appear to have positively impacted profits.

Quarterly Trend of Payment Amounts via Weverse in 2020 (Source=Big Hit)

Album sales by artists totaled 13.22 million copies, with sales revenue reaching 320.6 billion KRW, a 196% increase compared to the previous year. The strong performance of BTS and the groups ‘Seventeen’ and ‘Enhypen’ under Pledis, which was acquired last year, contributed to this growth. A Big Hit representative explained, “The effect of diversifying the artist lineup through mergers and acquisitions of other labels and establishing joint labels is reflected. Seventeen sold over one million copies last year, and Enhypen recorded the highest album sales among rookie artists who debuted last year.”

Although concert income decreased due to the spread of COVID-19, revenues from online concerts, official merchandise (MD), and fan club-related sales showed an upward trend. Last year, content revenue (including artists’ online concerts, documentaries, and variety shows) increased by 71% compared to the previous year, and MD and licensing revenue rose by 53%. Big Hit expects additional revenue growth once offline concerts become possible. Considering that artists held more than 60 world tour concerts last year, there is potential for increased content, MD, and licensing revenue generated additionally.

Going forward, Big Hit is expected to strengthen the Weverse platform through collaboration with Naver. As artist IPs currently on Naver’s V Live are absorbed into Weverse, a stable revenue-generating environment is anticipated. Furthermore, with UMG and YG joining ‘Venue Live,’ a digital live streaming service launched by Big Hit and Kiswe, platform competitiveness is expected to improve.

Park Ji-won, CEO of Big Hit HQ, stated at the IR conference held that day, “We will enhance Weverse and expand the ecosystem through various collaborations with external companies to continuously grow the platform sector. Through Weverse, the creative works produced by Big Hit will flow seamlessly to fans.”

Meanwhile, Big Hit’s stock price has surged about 42% this year, reflecting expectations for strong earnings. Securities firms predict an upward trend considering BTS’s influence, the growth of Seventeen and TxT, and the increasing sales of the Weverse platform. Hwang Hyun-joon, a researcher at DB Financial Investment, said, “As the largest domestic music and concert sales company, and considering the expanding proportion of artist indirect participation sales through Weverse, further price increases are expected at the current stock price level.”