K-Pop’s Quest to Rule the World Slows With Concert Venues Dark
(Bloomberg) -- April was supposed to mark the start of the 2020 Map of the Soul world tour for BTS, the South Korean boy band that sold 1.3 million tickets last year.
The band continues to boost its profile with appearances on U.S. television, including James Corden’s “The Late Late Show,” and chart-topping albums. But as is true for all entertainers cut off from fans by the coronavirus pandemic, BTS and other groups at the vanguard of the K-Pop craze will have to make do without live audiences for the foreseeable future.
“Concerts should be a main revenue source and now there’s almost zero profit from them,” said Lee Ki-hun, an analyst at Hana Financial Investment in Seoul. “It’s also hard to tell for sure when concerts and tours will be resumed.”
The cancellations are a big blow for Big Hit Entertainment Co., which manages the seven-member group that was expanding its global reach with record-breaking hits and sold-out shows. The band has become one of the world’s top live draws, grossing $170.3 million last year and ranking it fifth, just behind Elton John, according to concert trade publication Pollstar. The outbreak also interrupted John’s final world tour.
Big Hit posted revenue of 587.2 billion won ($475 million) last year, the closely held company disclosed in a financial statement, using a new accounting standard. Bang Si-hyuk, the producer behind BTS, also moved a step closer to becoming a billionaire with an estimated net worth of $770 million, according to estimates by the Bloomberg Billionaires Index.
The company declined to comment on the pandemic’s impact on tour revenue.
“We tried to find Big Hit’s own winning formula,” Bang, nicknamed the “Hitman,” said at a corporate briefing in February. “When it becomes the de facto standard of the industry, fans can be treated fairly as customers and artists can happily follow their dreams and talents.”
This year will require a different formula. In its financial statement last month, Big Hit said it’s hard to predict how the pandemic will affect the company.
Another K-pop powerhouse, SM Entertainment Co., is also reeling. Shares of the firm, which posted 657.8 billion won in revenue last year, tumbled 35% this year. Entry restrictions and the suspension of the visa waiver program in Japan, which account for about 20% of the company’s revenue, will hurt 2020 results, Eugene Investment & Securities analyst Han Sang-woung wrote in a March research note.
Shares of JYP Entertainment Corp. have dropped 18% as concerts scheduled for Japan and Southeast Asian countries have been delayed or canceled.
Even though concert venues are shuttered, album sales are growing for some of the most popular groups, driven by global promotions before the outbreak, according to Hana Financial’s Lee.
Earlier this month, BTS went online with a free show, streaming previous concerts and offering virtual fan meet-ups. The band’s fans, known as the Army, could connect their light sticks via Bluetooth, allowing the color to change with the songs, just as they would at a live concert.
The two-day event generated more than 50.5 million views, with 2.24 million people tuning in at the peak.
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