Music Earnings
South Korean K-pop giant HYBE said its net profit basically evaporated in the third quarter and total revenue slipped 2% after after the company earned less from concerts and saw reduced music sales, according to results published on Tuesday (Nov. 5).
HYBE’s net profit for the third quarter was 1.444 billion won ($1.05 million), a figure 98.6% lower than the third quarter of 2023 when the company reported of 99,690 billion won ($72.3 million). Total revenue for the third quarter of 527.9 billion won ($382.6 million).
HYBE’s biggest release of the quarter was the debut album, SIS, from KATSEYE, a six-member girl group formed over the summer as part of The Debut: Dream Academy, which spent two weeks on the Billboard 200, the company said.
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HYBE’s direct revenue — which comes from its recorded music business, concerts, and things where artists are directly involved — fell by 15.5% to 323 billion won ($234 million). Revenue from its recorded music division declined by nearly 19% to 214.5 billion won ($155.5 million), while concert revenue fell nearly 15% to 74 billion won ($53.6 million). Revenue from ads and appearances rose by nearly 10% to 34.5 billion won ($25 million).
HYBE’s business lines that operate independently of their artists — like merchandising and sync licensing — performed much better, with revenue from artist-indirect involvement business lines rising by 32% to nearly 205 billion won ($148.5 million). Revenue from merchandise and licensing song rights rose by nearly 16% to 99 billion won ($71.9 million), contents revenue rose 64% to almost 80 billion won ($58 million) and fan club revenue rose by more than 23% to 26 billion won ($18.8 million).
The company’s operating profit margin saw significant improvement — up 4% — from the first quarter this year to 10.3% for the third quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of HYBE’s profit from its operations, fell by 16.4% to 81 billion won ($58.7 million).
HYBE has had an eventful few months. In July, the company appointed Jason Jaesang Lee as its new CEO and announced its “HYBE 2.0” growth strategy, which reorganizes the company, pushes a global expansion and focuses on tech-driven initiatives.
The company has also been embroiled in a dispute with Min Hee-jin, ex-CEO of the company’s label subsidiary ADOR — home to chart-topping girl group NewJeans — regarding HYBE’s claim that Min tried to take control of ADOR and NewJeans.
Boosted by double-digit growth in recorded streaming and helped by major releases from Beyoncé and Future & Metro Boomin, Sony Music said on Tuesday that total revenue grew 23% to 442 billion yen ($2.7 billion) during its fiscal first quarter, which ended June 30.
Sony’s operating income improved 17% to 86 billion yen ($534 million) and adjusted operating income before depreciation and amortization (OIBDA) jumped 30% to 108 billion yen ($671 million). Adjusted OIBDA margin improved to 24.4%.
Both of Sony’s music divisions — recorded music and publishing — posted similarly solid year-over-year gains during the period, resulting in the ninth consecutive year of growth on the recording side and 11th straight year of gains for publishing.
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Recorded music revenue increased 26% to 299 billion yen ($1.8 billion), with subscription and ad-supported streaming up 19% to 197 billion yen ($1.2 billion) and accounting for roughly 66% of that recorded segment tally. Physical revenue sunk 5.6% to 24 billion yen ($150 million), year over year, while Sony’s “other” category — lumping merchandise, live performances and licensing revenue from synch, public performance and broadcast — jumped 81% to 73 billion yen ($453 million).
Sony said some of its top sellers for the fiscal quarter were Beyoncé’s COWBOY CARTER, Future and Metro’s WE DON’T TRUST YOU, Travis Scott’s UTOPIA and SZA’s SOS. Some non-all-capped wins included Luke Combs’ Gettin’ Old, 21 Savage’s american dream and Doja Cat’s Scarlet.
Music publishing revenue rose 28.7% to 97 billion yen ($602 million). Streaming revenue climbed 36% to 56.5 billion yen ($351 million), while publishing’s “other” category grew 19.7% to 40.1 billion yen ($249 million) when compared to the year-ago period. The company disclosed that as of March 31, its publishing division either owned or administered approximately 6.24 million songs, an increase of 14% in the last two years.
Sony Music’s visual media and platform revenue declined 7.1% to 39.7 billion yen ($246 million). The segment includes mobile gaming, software for PCs and game consoles, and software development contracts.
Looking ahead, Sony Music Entertainment raised its forecast for full-year revenue by 3% to 1.7 trillion yen (approximately $11.5 billion) with a projected operating income increase of 5% from the previous forecast in May to 20 billion yen.
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