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BTS, BLACKPINK's absence causes direct impact on CD sales; ‘Big Four’ affected in 2024 second quarter
HYBE, JYP, YG and SM have seen a decline in second quarter earnings due to the absence of top groups like BTS and BLACKPINK and low international CD sales.
The major K-pop agencies, a.k.a the Big Four—HYBE, YG Entertainment, JYP Entertainment and SM Entertainment—are likely to generate low second-quarter earnings due to a decline in CD sales and the inactivity of leading groups like BTS and BLACKPINK.
BTS, BLACKPINK's absence and CD sales decline creates challenges for K-pop market
The inactivity of leading K-pop groups like BTS and BLACKPINK has led to a major collapse in the K-pop market. Reportedly, the second quarter earnings for the ‘Big Four’ K-pop giants—HYBE, SM Entertainment, YG Entertainment, and JYP Entertainment—are set to decline considerably owing to sluggish CD sales and the absence of top-performing groups like BTS and BLACKPINK.
Consequently, the stock target prices have been lowered for HYBE and YG Entertainment as analysts predict low market performance.
Despite major comebacks from groups like SEVENTEEN, NewJeans, and TXT, several factors like the poor performance of HYBE's gaming subsidiary, ASTRA, promotional and production costs of new groups, along with the ADOR controversy have affected the stock prices of the company.
YG Entertainment's profits too are projected to fall considerably due to the extended absence of its top performing group, BLACKPINK. A recovery, however, is expected with the comeback of the girl group by 2025 along with concert revenue from the company's other major groups.
Furthermore, a significant decline in the number of people attending concerts of its major groups like TWICE, Stray Kids, and ITZY have impacted JYP Entertainment's revenue and profit margins. This pattern is expected to continue for the future concerts too.
SM Entertainment's target stock price remains steady. Revenue returns, however, is expected to be flat with a downward profit trend.
Alongside all this, however, the major factor behind this revenue and profit downfall is reportedly due to the significant decline in CD sales abroad.
The decline in CD exports is quintessential in this matter because K-pop’s growth over the past decade has largely been driven by international sales, making this slump particularly concerning.
To sum up, the inactivity of major groups like BTS and BLACKPINK combined with a worrisome decline in international CD sales have put the Big Four into a tough spot. Whether the expected comeback of the groups by 2025 will put things in order, is yet to be seen.
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