[Asia Economy Reporter Jang Hyowon] Cube Entertainment announced on the 21st that it has signed an advance distribution contract for albums and content with Kakao Entertainment, the largest comprehensive content company in Korea affiliated with Kakao.
The total contract amount is 80 billion KRW, which exceeds Cube Entertainment's sales of 72 billion KRW last year and corresponds to more than 430% of last year's album and music sales of approximately 15 billion KRW. Through this contract, Cube Entertainment will secure 50 billion KRW by January next year, and an additional 30 billion KRW will be advanced depending on sales performance thereafter.
A Cube Entertainment representative stated, "This large-scale contract with Kakao Entertainment has significantly elevated Cube Entertainment's status in the market. Although the actual contract period is five years, we expect record-high performance in the album and music sectors this year due to the activities of our artists, including (G)I-DLE, so internally we believe there is no problem offsetting all the advance payments against sales early. Furthermore, the cash inflow from this contract has secured liquidity and enabled us to explore additional investment opportunities."
They also added, "Based on the secured funds, we have established a foundation to flexibly respond to the rapidly changing industry environment, coinciding with recent signs of the lifting of the Hanban ban and China's reopening. We now have sufficient capacity to invest in and support not only existing artists but also new artists. Additionally, through this contract, we expect synergies from further collaboration between Cube Entertainment and Kakao Entertainment, the largest content distribution platform in Korea."
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