SM Entertainment Sees Double-Digit Revenue Increase in Q2
K-pop player SM Entertainment has posted its Q2 2023 financials – and the news is good. The company brought in $183.37 million in the quarter, including $106.40 million from its core music operations. That's a 25 percent YoY gain.
Why it matters: With acts like Aespa, EXO and many more, SM Entertainment is like a factory of K-pop talent – and their success shows the genre continuing to build commercial momentum.
The numbers: SM’s revenue from its music operation breaks down like this:
$41.65 million from albums and digital
$32.39 million from merchandise and licensing
$15.85 million from appearances (television, advertising and non-concert events)
$15.31 million from concerts
$1.15 million from other sources
Album sales were up 1.5 million units to 3.6 million overall – although album revenue actually declined 8.7 percent. Meanwhile, concert revenue and merch sales boomed rising over 250% and almost almost 75 percent YoY, respectively.
The company controls dozens of K-pop acts and is looking to strike while the iron is hot with plans to put their decentralized hit-making system to use in a big way. SM’s unique business model features five physical production centers (and one virtual), each one taking music pumped out by publishing subsidiary Kreation Music Rights and independently pairing it with artists they control on their own. Upcoming releases include work by Aespa, Super Junior’s Yesung, Riize and more.
What they're saying: Kreation "will supply high-quality music to the multi-production center," explained SM CEO Jang Cheol Hyuk, "and the multi-production center will produce music for the artists, which will lead to strengthen SM’s business model sustainably."