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| Big Hit Entertainment's corporate image / Courtesy of Big Hit Entertainment |
By Kim Jae-heun
Big Hit Entertainment has officially confirmed its stock trading deal with local IT giant Naver and investment in YG PLUS, YG Entertainment's advertising subsidiary. Unlike its show business management business which has already reached its peak, the partnership deal with Naver and YG PLUS is expected to improve Big Hit's platform business and help lower its reliance on superstar boy band BTS.
According to the talent agency's regulatory filing, Monday, sales coming from its platform business showed steep growth. It reached 72.4 billion won in the first half of last year, which is close to 73.2 billion won in revenue for all of 2018, from hosting online concerts and fan meetings as well as selling goods related to BTS.
Its growth is expected to have picked up speed in the second half of last year as local security firms estimate Big Hit to have profited 120 billion won from its platform business. Compared to the 13.8 billion won it generated in the platform business in 2018, the amount has increased by nearly nine times in two years.
Meanwhile, its show business management activity has stagnated since early 2020 due to the effects of the COVID-19 pandemic. Revenue created from selling music and hosting world tour concerts in 2019 stood at 460.2 billion won. However, the number took a nosedive to 165.8 billion won in the first half of last year as its K-pop groups including BTS were not able to perform in front of fans.
The latest results offer a chance for Big Hit to lower its reliance on BTS, which accounted for 95 percent of the company's revenue in 2018 and 86 percent in 2019. BTS was the key factor that contributed to boosting Big Hit's high enterprise value once, but it was also, at the same time, the main culprit behind the company's stock price halving after it went public. Investors were worried that BTS' appeal will eventually wane, resulting in the decline of Big Hit's sales.
To settle investors' concerns, Big Hit last June launched Weverse, a fan-based online community where the talent agency hopes to seek profit continuously with BTS-related content even if the boy band stops performing after its members start their mandatory military service. Over 19.2 million fans joined the online community platform last year.
