HYBE Grew 42% in 2022, Eyes New Markets in 2023 Through SM Entertainment Investment

South Korean music company HYBE isn’t just about major artists BTS taking a hiatus and its members pursuing solo projects and preparing for military service. His HYBE revenue in 2022 increased by 41.6% to reach 1.78 trillion won ($1.41 billion at the exchange rate on Dec. 31, 2022), the company said Tuesday. (February 21).

Adjusted profit before interest, tax, depreciation and amortization increased 23.9% to KRW 328.8 billion ($260.5 million). However, the profit margin is thinner than the previous year. Last year’s operating margin (as a percentage of revenue) declined from 15.1% in 2021 and 18.3% in 2020 to 13.4%.

HYBE divides revenue into two main categories: direct artist involvement and indirect artist involvement. Direct involvement income includes recorded music, tours, management, and more. Recorded music sales rose 47% to 553.9 billion won ($438.9 million), making it the largest single revenue stream. Concert revenue rose 470.1% to his 258.2 billion won ($204.6 million) as the artist returned to touring after curtailing performances during the pandemic.

BTS may be taking a break, but in album-loving South Korea, HYBE is still the sales leader. Four HYBE artists made it into the top 10 of Korea’s year-end album tally: BTS No. 1 with 5.75 million, Seventeen No. 3 with 5.56 million, Tomorrow X Together No. 5 with 2.78 million, ENHYPEN 8th place with 2.64 million units. Le Sserafim was his 15th artist with 1.29 million units.For reference, last year’s US top album, Taylor Swift’s midnightEquivalent to 1.8 million units sold.

Revenue from indirect artist involvement increased only 9.7% in the calendar year. Merchandising and licensing increased by 24.8% to KRW 395.6 billion ($313.5 million), while fan club revenue increased by 47.1% to KRW 67.1 billion ($53.2 million).

In Q4 2022, HYBE’s revenue increased by 16.9% to KRW 535.3 billion ($424.2 million). Recorded music revenue increased by 76.4% to 149.1 billion won ($118.2 million), making it the largest single source of revenue.

BTS’ global success has allowed HYBE to diversify themselves and become less dependent on K-pop supergroups. In 2017, South Korea accounted for his 72% of his HYBE revenue, while Japan was his 14% and North America was 9%. In 2022, HYBE will grow 19x from his 2017, with an almost evenly balanced business across its three major markets: South Korea (33% of revenue), North America (32%) and Japan (28%). Expanded. Rest of the World contributed just 7% of HYBE’s 2022 earnings, but that could change if the company’s latest investment performs as expected.

HYBE’s recent acquisition of a major stake in rival K-pop company SM Entertainment presents an opportunity to grow in a market that currently has little presence. CEO Park Jiwon explained on Tuesday’s earnings call that HYBE’s artists will benefit from SM Entertainment’s strong network and infrastructure in China and Southeast Asia. Similarly, HYBE believes he can help SM Entertainment in the North American market.

HYBE’s latest acquisition had no impact on 2022 results, but will help expand its presence outside South Korea in 2023. Migos and Lil Baby, $300 million. Quality control will be under the leadership of HYBE America and, in 2021, Scooter Braun, his CEO with whom HYBE acquired Ithaca Projects.

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