Earnings of the "Big 4" entertainment companies in K-pop - YG Entertainment, Big Hit Music (under HYBE), JYP Entertainment, and SM Entertainment - are predicted to see a rise from the second quarter of 2021, according to Hana Financial Investment.
On April 15, a researcher at Hana Financial Investment shared how much the "Big 4" labels could earn from the following months of this year, starting from the second quarter which is from April to June. They also unveiled the possible factors for the growth in earnings.
Earnings of the "Big 4" - YG, JYP, SM, Big Hit - to Possibly Increase from Second Quarter of 2021
Lee Ki-hoon, the researcher at Hana Financial Investment, told JoyNews24 that the operating profit consensus of the "Big 4" companies - Big Hit Music, YG, JYP, and SM - will largely increase by 2022.
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In the case of HYBE, where Big Hit Music is under, the agency recently acquired Scooter Braun's media company Ithaca Holdings through their subsidiary Big Hit America. Ithaca Holdings manages some of the biggest stars in the United States such as Justin Bieber, Ariana Grande, Demi Lovato, Florida Georgia Line, and many more.
This merger of two well-known labels is expected to be a huge factor in the increase in earnings of Big Hit Music, and HYBE overall.
As for JYP Entertainment, the rise in sales in China and the immense growth of popularity of NiziU could be some of the main factors for the company's gain this 2021, according to the researcher.
READ MORE: JYP Entertainment's Earnings Predicted to Increase This 2021 with Full Lineup of Comebacks of Artists, from TWICE to NiziU
Lee Ki-hoon went on to say that the growth in global sales and profit of YG Entertainment will expand through the cooperation of Big Hit Music and Universal Music Group. These three agencies, along with Kiswe, teamed up to launch a new digital live streaming platform called "VenewLive," where artists can hold online concerts.
The researcher then predicted that if these expectations would take place as early as possible, earnings of the "Big 4" entertainment companies will improve from the second quarter of 2021. The growth in earnings is expected to reflect in the agencies' stock prices.
Hana Financial Investment's Lee Ki-hoon also revealed that the earnings of the Big Hit Music, SM Entertainment, JYP Entertainment, and YG Entertainment for the first quarter of this year were lower than the consensus except for SM.
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The overall operating profit of HYBE was 10.4 billion won, JYP had six billion won, YG earned 2.9 billion won, and SM gained 5.8 billion won.
Other Possible Factors for the Increase in Earnings of the "Big 4" Entertainment Agencies
Apart from the predictions above, the researcher also said that concerts and comebacks will be huge contributors to the labels' total earnings. Lee added that concerts may be available from the third quarter of 2021.
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"If the major artists of these agencies (BTS/SEVENTEEN/BLACKPINK/TWICE/NCT, etc.) would be making a comeback in the second quarter, the results in the first quarter will be lower than the consensus," Lee Ki-hoon stated.
Furthermore, Lee said that the improvement in earnings of Big Hit Music, and HYBE overall, owing to its acquisition of Ithaca Holdings, will be reflected from May.
Concerning JYP Entertainment, NiziU's growing fame is much faster than expected, and the profits are predicted to be around six billion won even if no one made a comeback in the first quarter.
With regard to YG Entertainment, Lee stated that the subsidiary, YG Plus, started the distribution of Big Hit's albums and originals in the second quarter, and from the second of this 2021, high synergy is expected through major artists entering Weverse.
Lastly, SM Entertainment was analyzed to possibly have an operating profit of approximately 75 billion won in 2022 due to the growth of its subsidiary KeyEast Entertainment.
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Written by Mhaliya Scott
