Why This Report Detailing SM, YG, JYP And Big Hit 2019 Profits Surprised Netizens, Big Hit Dominates AGAIN

An online community post on the Qoo detailing the biggest Kpop agencies profits has gained lots of attention and its surprising everybody as well.

The list shows the earnings of South Korea’s biggest labels YG Entertainment, SM Entertainment, JYP Entertainment, and Big Hit Entertainment. Big Hit proving yet again its status as one of the big if not the biggest of them all. Some thought YG is already out of the title ‘Big 3’ when looking at the report, others suggest to re-name the powerful labels ‘the big 4.’

Here are the details:

Sales

SM: 658 billion won (543 million USD)

Big Hit: 588 billion won (485 million USD)

YG: 265 billion won (218 million USD)

JYP: 155 billion won (128 million USD)

Operating Profit

Big Hit: 98 billion won (80.1million USD)

JYP: 43 billion won (35.5 million USD)

SM: 40 billion won (28 million USD)

YG: 2 billion won (1.6 million USD)

Regarding the net profit, Big Hit didn’t share its data since it’s a private company, but they’re expected to have generated the most profit among the labels.

Net Profits

Big Hit: 79 billion won (65.2 million USD) – Profit

JYP: 32 billion won (26.4 million USD) – Profit

SM: 16 billion won (13.2 million USD) – Deficit

YG: 25 billion won (20.6 million USD) – Deficit

Netizens had expected YG to have incurred losses because of the various controversies the label has been a part of in 2019, despite BLACKPINK’s massive success, the girl group wasn’t able to keep the label from turning in a deficit.

The shocking thing about the report is that SM has turned a deficit despite ranking first in sales among the four labels; netizens are questioning why SM turned a deficit despite their massively successful 2019.

It’s not a surprise that yet again Big Hit dominated the profit category by a large margin. It currently has only two boy groups (not counting its subsidiaries) and most of its profit is generated by BTS, and it’s competing with labels that have at least 5 active groups promoting at the same time not to mention the soloists and sub-units.

Despite JYP’s low sales count, their net profit puts them in second place, which means they run their business efficiently.

What do you think of the numbers? Did they shock you?

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My Personal Thoughts

SM lost over $13 million, I am shocked… but I guess looking back at what they did in 2019, it was kinda expected.

First, they spent a lot of money promoting SuperM and creating them, second, they keep spending a lot of money on NCT units and despite each unit finding a certain level of success, its nowhere near how successful EXO or any other previous SM boy group was.

The concept of NCT is not the best in my opinion and it doesn’t work that well with Kpop fans in general, but SM will have to see it to believe it. Kpop fans don’t like rotational groups, I think NCT dream fans are still protesting and want this unit to become fixed. I feel so sorry for every NCT member because of how complicated the entire situation is.

NCT units are successful as I said previously, the issue is, ‘are they as successful as they need to be?’ SM spends a lot to debut their groups and they debut a lot of members in each group, if we roughly estimate that they spend around $1 to $2 million on a member debut, then it’s obvious why they’re losing money.

I also found the way they dealt with EXO releases to be annoying, to say the least; they never once gave any of the members’ solo promotions the attention they deserved.

Onto Big Hit that is a time bomb at this point. When Jin enlists this year (according to military law), they will take a huge hit. I never quite understood the need to focus too much on the brand BTS as a whole for such a long time, I work in business and their decision is flawed in my opinion, and the reasons why it’s flawed will become clear in the coming years.

Unless BTS members decide to enlist in groups of 2 or 3 in the next two years, Big Hit will never fully recover until they are all out of the military. This is why Big hit is acquiring companies left and right, it’s the fastest and safest way to build an empire and cut losses and even then, they still won’t generate as much profit as they once have. I think this will be their biggest year followed by a slip in profit.

Big hit should’ve tested the waters giving attention to each member to see how much money each one of them will be able to generate on their own, if they had, they would have a better idea about how they can handle the upcoming battle and how they can minimize losses.

I’m sure each BTS member will receive lots of love from ARMY but the reality is, BTS is strong as 7 and that’s how Big hit presented them and every endorsement they got was a group endorsement. How successful each member commercially will be known in the coming years as Big hit focus shifts.

If this year YG doesn’t get itself in trouble, I think they will generate good profit. But they will still suffer from 2019 for years to come, just looking at those numbers…. If BIGBANG comes back this year, I think YG will do great. I believe a tour for BIGBANG would really do YG a solid this year (but the situation with the corona is bad), if BIGBANG hadn’t renewed, it would’ve been over for YG.

If YG continues to treat BLACKPINK the way they do, then it’s going to be challenging for them. WINNER members are nearing enlistment and the new boy and girl group will need lots of money to promote. iKON, AKMU and the rest will have to work extra hard for the label to generate profit in 2020. BIGBANG will not be able to save YG alone this year, it will have to be a collective effort and YG will have to let go of their old ways and try hard to promote everyone equally.