However, thanks to goods and content, cumulative sales exceeded KRW 1.5 trillion.
“Achieving annual sales of 2 trillion won for two consecutive years”
Activities of artists belonging to BTS, including Jin and Seventeen
Weverse monthly subscription membership begins in the 4th quarter
Hive, Korea’s largest entertainment agency, both saw a decline in sales and operating profit in the third quarter of this year.
Hive announced on the 5th that its consolidated operating profit in the third quarter of this year was provisionally calculated to be KRW 54.2 billion, a 25.4% decrease from the same period last year. Sales were KRW 527.8 billion, a 1.9% decrease from the same period last year, and net profit was KRW 1.4 billion, a 98.6% decrease.
Among the sales during this period, direct participation sales, which include albums, performances, and advertisements, amounted to KRW 323 billion, down 18.8% from the same period last year. In particular, there was a significant decline in albums and music (18.8%) and performances (14.8%).
Hive explained, “Despite the global event called the Olympics, we performed well thanks to the growth in album sales of Enhyphen and Boy Next Door, New Genes’ Japanese debut single reaching a million-seller, and BTS’s Jimin and Le Seraphim’s good digital music performance.”
Indirect participation-type sales such as merchandise products (MD), licensing, content, and fan clubs were totaled at 204.9 billion won. This is an increase of 31.8% compared to the same period last year. Among these, the content sector, where sales increased by 64%, showed the highest increase.
As Hive achieved cumulative sales of KRW 1.5292 trillion as of the third quarter of this year, it is expected to achieve annual sales of KRW 2 trillion for the second year in a row.
He also said that the operating profit margin is rapidly rising to 4% in the first quarter, 7.9% in the second quarter, and 10.3% in the third quarter, and is recovering as the initial infrastructure construction work for new business development is nearing completion.
In addition, the company announced that it will begin to improve profits in earnest by launching a monthly subscription-type membership for Weverse, a global fan community platform that is contributing significantly to indirect sales.
Weverse’s MAU (average monthly active users) was 9.7 million, an increase of approximately 100,000 compared to the previous quarter, but a decrease of approximately 900,000 compared to the same period last year.
Accordingly, through a major reorganization, Hive integrated Weverse Shop, which was operated separately, and strengthened personalized services such as content recommendations, setting favorite communities, and upgrading new and language translation functions.
Jae-sang Lee, CEO of Hive, said in a conference call, “Weverse began broadcasting external advertisements on the main screen last September, and began improving the user environment (UI) and user experience (UX) in October,” adding, “Monthly subscription membership during the fourth quarter. “We expect profits to improve in earnest along with this,” he said.
Hive also emphasized that its artists, including BTS’s Jin, will begin activities in the fourth quarter.
Jin will release his first solo album ‘HAPPY’ on the 15th. Seventeen, who made a comeback after half a year with their twelfth mini album ‘SPILL THE FEELS’ last month, will hold a world tour until early next year.
Tomorrow by Together is leaving the encore concert of their third world tour and will continue their activities with their seventh mini album, ‘The Chapter of Stars: SANCTUARY’, released on the 4th.
The performance of girl groups is also raising expectations. ‘Le Seraphim’, which entered the US Bill Mode ‘Hot 100’ for two consecutive weeks with its fourth mini album title song ‘CRAZY’, will release a Japanese single in December.
‘Illit’, which made a comeback with its 2nd mini album, has also surpassed 1 million album sales in cumulative album sales just 7 months after its debut, and is showing its growing presence by ranking 2nd in Japan’s Oricon weekly album rankings and 1st in overseas album rankings.
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Interview Between Time.news Editor and an Industry Expert on Hive’s Recent Performance
Time.news Editor (TNE): Welcome! Today, we’re diving into some exciting developments in the entertainment industry, particularly involving Hive. Sales exceeded KRW 1.5 trillion through various avenues, and they are projecting annual sales of KRW 2 trillion for the second consecutive year. What do you make of these numbers?
Expert (E): Thank you for having me! Indeed, Hive’s performance is remarkable, especially considering their cumulative sales exceeded KRW 1.5 trillion already. Achieving KRW 2 trillion in annual sales highlights their growth in both direct and indirect participation sales. It’s a testament to their strategic planning and the global popularity of their artists.
TNE: It’s clear that BTS and other groups under Hive have made significant impacts. The presence of artists like Jin and groups such as Seventeen seems pivotal. Can you elaborate on how their activities have shaped Hive’s financial success?
E: Absolutely. BTS has an enormous global fanbase, and the activities of its members, including Jin, significantly influence sales. For example, during the third quarter, despite a decline in direct participation sales like albums and live performances, the indirect sales stemming from merchandise and content surged. This reflects the strong brand loyalty of their fans, who continue to support their idols through various channels.
TNE: Interestingly, Hive saw a steep drop in both sales and operating profit for the third quarter. What factors contributed to this decline, and how does it fit into their larger trend?
E: The decrease in sales and operating profit—by 1.9% and 25.4% respectively—can be attributed mainly to the decline in album and performance sales. However, it is also important to note that there were extraordinary events like the Olympics, which shifted market dynamics. Nonetheless, Hive’s successful album launches for new groups like ENHYPEN and New Jeans have bolstered their numbers over the long term. Also, their strategy of focusing on indirect sales has mitigated the impact of these declines somewhat.
TNE: That’s a great point. Now, let’s talk about the launch of the Weverse monthly subscription membership. How might this initiative influence Hive’s revenue streams moving forward?
E: The launch of a subscription-based model for Weverse could significantly enhance Hive’s revenue from indirect sales. Given that Weverse is currently growing in user engagement—despite a slight year-over-year drop in active users—this new approach could help stabilize and potentially increase revenue from avid fans who seek exclusive content and experiences. It reflects a shift toward a more sustainable business model by leveraging their existing community.
TNE: Hive’s operating profit margin has shown steady improvement. What does this trend indicate about their operational efficiency and future prospects?
E: The rising operating profit margin suggests improved operational efficiency as Hive responds to internal and external market pressures. Their efforts to integrate different platforms, like the Weverse Shop, are aimed at streamlining operations and enhancing user experience. With an average annual growth rate of over 30% in sections like sales, Hive is positioning itself strongly for sustained growth, especially if they continue on this trajectory.
TNE: It sounds like Hive is on a promising path despite some bumps along the road. What should we be looking for in the near future regarding their strategies and market performance?
E: Definitely keep an eye on the upcoming content from their artists and the performance of their new membership model. They also have plans for reorganization within their platforms to enhance user experience and drive engagement further. All these factors combined should reflect positively in their upcoming quarterly reports. Investors and fans alike will be watching closely to see how these initiatives pan out!
TNE: Thank you for your insights! This discussion provides a clearer picture of Hive’s strategic positioning and the factors influencing its impressive growth.
E: Thank you for having me! I’m excited to see where Hive heads next in this rapidly evolving entertainment landscape.