Growth in music and concert revenue pushed K-pop company SM Entertainment’s consolidated revenue to 231.4 billion KRW ($159 million), up 5.2% from the prior-year period. Operating profit of 32.6 billion KRW ($22 million) was up 109.6% while operating margin improved to 32.6% from 15.5%.
SM’s concert revenue grew 58.0% to 39 billion KRW ($27 million) on the strength of tours by NCT 127, aespa, TVXQ and Minho. Merchandise and licensing rose 9.4% and appearances slipped 12.3%.
Recorded music revenue increased 23.1% despite fewer big releases than in the prior-year period. Hearts2Hearts’ debut single, “The Chase,” was released on February 24 and sold 420,000 copies in its first week.
Revenue at SM Entertainment’s subsidiaries fell 16.8% to 104.5 billion KRW ($72 million). Stream Media Corporation, which manages SM-affiliated artists in Japan, fell 23.9% due to fewer concerts in the country. SM Culture & Contents declined 26.1% from a continued decline in advertising revenue. Management agency KeyEast sank 82.3% due to fewer dramas being aired. The lone increase came from live events company Dream Maker Entertainment, which credited an expansion of concerts, including SMTOWN LIVE, for its 78.1% jump in revenue.
As K-pop returns to China after nearly a decade of restrictions, DearU, a messaging platform that connects artists and fans, recently signed a strategic partnership with China’s Tencent Music Entertainment and will soon launch its Bubble platform in the country. During the earnings call, CEO Cheol-hyuk Jang called it “a critical turning point in expanding K-pop artist fan experiences” within one of K-pop’s largest markets. Additionally, SM artists made forays into China in the second quarter: NCT Ten performed a solo show in Macau, and WayV appeared at the Strawberry Music Festival.
SM released a mini-album by NCT WISH in April and, looking ahead, it’s set to release a full album by RIIZE in the second quarter. Full albums by BoA, Super Junior and NCT Dream and mini-albums by aespa, NCT Wish and Hearts2Hearts are slated for the third quarter.