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BTS’ military service leads to revenue decline for HYBE; CEO Lee Jae-sang anticipates group’s return in 2025
HYBE sees profit decline amid BTS' military service; CEO unveils plans for Weverse, gaming, and global expansion while gearing up for the group's highly anticipated 2025 return. Read more!
HYBE, the entertainment giant behind global K-pop phenomenon BTS, has acknowledged the financial struggles brought on by the group’s mandatory military enlistment. During the company’s annual general shareholders' meeting on March 31, CEO Lee Jae Sang addressed the impact of BTS’ temporary hiatus on HYBE’s earnings and outlined strategic measures to counteract these challenges. Despite setbacks, the company remains optimistic about the future, particularly with the group’s highly anticipated return in 2025.
Since BTS members began enlisting in the military, HYBE has faced noticeable disruptions in its revenue flow. While the company still managed to generate substantial earnings in 2024 through concert tours by other artists under its label, its overall operating profit saw a decline. Lee pointed to the shift in revenue distribution, ongoing investments in new business ventures, and, most notably, the absence of BTS as key factors behind the drop.
In previous years, BTS had been a dominant force in HYBE’s financial success, driving record-breaking album sales, sold-out world tours, and massive merchandise revenues. Their temporary hiatus has left a gap that the company has been working to fill through the development of new artists, global expansion, and diversified business strategies.
Acknowledging the financial challenges, HYBE is now actively implementing a recovery strategy. Lee emphasized that the company is prioritizing profitability by strengthening its digital services, particularly its global fan platform, Weverse. The platform has become a crucial asset in maintaining artist-fan engagement, with steady growth in user activity and content monetization. In addition to Weverse, HYBE is betting on its entry into the gaming industry, an area with immense growth potential. The company’s investment in gaming is expected to generate a new, sustainable revenue stream outside of music and live performances.
Another key element of HYBE’s strategy is its continued expansion into international markets. Japan has been a particularly lucrative region for the company, with revenue from HYBE’s Japanese operations reaching between 600 billion and 700 billion KRW last year. This success has positioned HYBE as the third-largest entertainment company in Japan, and it is now preparing to launch an audition program to debut another idol group in the country. The move aligns with HYBE’s long-term plan to establish itself as a dominant player across multiple regional markets.
Beyond Japan, HYBE is reinforcing its multi-home, multi-genre strategy, which focuses on diversifying music styles, artist management, and market operations. This approach aims to create a more resilient business model that can sustain the company through industry shifts and unforeseen disruptions, such as BTS’ temporary hiatus.
While HYBE is actively working on financial stability through various initiatives, there is no denying that BTS’ eventual return will play a crucial role in revitalizing the company’s profits. The group’s reunion is expected to spark a surge in album sales, digital streaming numbers, merchandise purchases, and ticket sales for their long-awaited comeback performances.
Lee reassured shareholders that despite current difficulties, HYBE is well-positioned for long-term growth. The company is not only preparing for BTS’ return but also strengthening its global presence and diversifying its business model to ensure financial stability beyond the group's activities. With a strong strategic vision in place, HYBE is determined to manage the current period of uncertainty and emerge even stronger when BTS resumes full-group activities in 2025.
