From BTS to Blackpink, Big Gains Ahead... Entertainment Industry Eyes 1 Trillion Won in Operating Profit

Major Idol Comebacks Lined Up for This Year
Strong World Tours and Merchandise Sales Signal Bright Outlook for Entertainment Companies

As idols with large and loyal fan bases announce their return in force this year, expectations are rising that the earnings of major domestic entertainment companies will expand. Backed by BTS, who are coming back as a full group for the first time in about four years, there are projections that HYBE’s revenue will surpass 4 trillion won this year. SM Entertainment and YG Entertainment are also highly expected to see their results driven by EXO and Big Bang, who are preparing for their comebacks.

BTS. Provided by BigHit Music

According to the industry on the 24th, BTS will release their fifth full-length studio album, "Arirang," on March 20 and will showcase a comeback live performance the following day near Gwanghwamun Square in Seoul. After that, they will embark on a world tour with 82 shows across 34 regions, including Asia, North America, Latin America, Europe, and the Middle East.

Riding the heightened mood created solely by the news of their return, expectations are emerging that HYBE’s earnings this year will surpass last year’s record-high consolidated revenue in the 2 trillion won range. The securities industry forecasts that more than 4.3 million fans will attend the BTS world tour, generating over 1 trillion won in concert revenue. In addition, HYBE is reportedly pushing ahead with plans to launch new girl groups in Korea and North America, prepare the debut of a new boy group, and activate a project targeting the Indian market.

SM, which delivered an earnings surprise in the fourth quarter of last year, is also set to maintain its momentum. In the first quarter of this year, the company plans to successively release new albums, including full-length studio albums from EXO and Irene, as well as new releases from NCT JNJM and Hearts2Hearts. On the concert side, Super Junior’s 20th-anniversary tour, which has been underway since last year, will continue, and EXO’s world tour is scheduled to begin in April. Hearts2Hearts will hold their first U.S. showcase in the second quarter.

Tak Youngjun, Co-CEO of SM, recently stated in an earnings announcement, "Through our Next 3.0 strategy, we will enhance the autonomy and efficiency of our production organization, and by pursuing the cultivation of new intellectual property (IP) and our global expansion strategy in a balanced way, we will strengthen our top-line growth, profitability, and the long-term competitiveness of our IP."

JYP Entertainment is currently conducting tours in North America and Europe with Twice, following Stray Kids last year. However, Park Sungho, a researcher at LS Securities, said, "The key point for this year’s earnings is how the company will fill the revenue gap after the second half of the year." At YG, Blackpink is set to release their third mini album, "Deadline," on the 27th of this month, and Big Bang has also made official their plans to return this year to mark their 20th anniversary.

The securities industry expects the combined operating profit of domestic entertainment companies to reach the 1 trillion won range. The improvement in relations with China is also seen as a positive factor. Before the THAAD-related restrictions on Korean cultural content, Chinese sales accounted for more than 20% of entertainment companies’ revenue; therefore, if cultural exchanges between the two countries become active again, their profits are expected to be maximized.

They also assess that, in addition to album sales and concerts, the merchandise business utilizing the IP of affiliated artists has established itself as a key pillar of entertainment companies’ earnings. The scope of merchandise production, such as light sticks, photo cards, and clothing, is virtually limitless. An industry insider said, "Merchandise continues to generate revenue because it sells even when artists are not actively promoting," adding, "Secondary expansions such as character licensing and webtoon adaptations are also possible, so the share of merchandise in total sales keeps growing."