SM Entertainment Reports Revenue Decline On Lower Music Sales, Concert Revenue
The K-pop label said it had fewer major releases in the quarter "as our major artists focused on expanding their overseas activities."
SM Entertainment's stock fell more than 7% on Wednesday after the label, which houses K-pop sensations aespa and NCT, announced a loss-making quarter. The company revealed a 9% drop in total revenue, driven by declining music and concert sales. SM Entertainment generated 291.1 billion Korean won ($205.2 million) in revenue and 35.5 billion Korean won ($25 million) in operating profit, a 26% decrease compared to the previous year's quarter.
Net losses reached 1.1 billion Korean won ($775,000), down from a 44.7 billion Korean won ($31.5 million) profit the year before. The main reason for the decline was foreign exchange losses due to the Korean won's appreciation, according to Jeongmin Jang, SM Entertainment's CIO. The NCT 127 singer group's album sales plummeted by approximately 70% year-over-year, with total album sales slipping 51% to 47.1 billion KRW ($33.21 million).
Jang explained that the major artists shifted their focus towards expanding overseas activities. Physical and digital music sales fell by 51% to 47.1 billion KRW ($33.21 million), with only 1.67 million copies sold, mostly driven by NCT 127’s album BLINGY. However, there were positive aspects to SM Entertainment's earnings. The company's share of major artists' album releases and global concert activities, as well as revenue from IP licensing collaborations, rose by 23.5% year-over-year to 62.1 billion Korean won ($43.78 million).
Artist appearances at international award shows, music festivals, and advertising also contributed to a 21.3% increase in revenue to 29.2 billion Korean won ($20.6 million).
Written by urgent.news from Billboard's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
