South Korea’s leading entertainment companies are forecast to post weaker financial results for 2024, as the absence of mega stars like BTS and BLACKPINK performing as full groups has led to a slowdown in album sales. Analysts, however, predict a recovery in the latter half of 2025 as these iconic artists return to the stage.
According to financial data provider FnGuide, HYBE, which surpassed 2 trillion won ($1.6 billion) in annual revenue for the first time in 2023, is projected to set a new record of 2.1961 trillion won in revenue for 2024, reflecting a modest 0.8% increase. However, its operating profit is expected to drop sharply by 31%, falling to 2.037 trillion won from 2.956 trillion won the previous year.
SM Entertainment is also forecast to see its revenue increase slightly by 1.6% to 976 billion won. However, its operating profit is estimated to plummet 33.4% to 75.6 billion won. Similarly, JYP Entertainment is projected to maintain stable revenue at 564.8 billion won, though its operating profit is expected to decline 24.5% to 127.9 billion won.
YG Entertainment, grappling with the absence of BLACKPINK, is expected to fare the worst among the major players. Its revenue is forecast to fall to 368.3 billion won, down from 569.2 billion won in 2023, effectively returning to 2022 levels. Additionally, the company is projected to post an operating loss of 22.6 billion won.
A significant factor behind the downturn is the decline in album sales, driven in part by China’s restrictions on large-scale fan fundraising campaigns, which have curbed bulk purchases of K-pop albums. HYBE has also faced internal challenges, including reported tensions between CEO Min Hee-jin and the company’s management over NewJeans, which may have impacted overall performance.
According to the Korea Music Content Association’s Circle Chart, physical album sales for K-pop dropped 17.7% in 2024 to 98.9 million units, down from 120.2 million units in 2023. SEVENTEEN’s album sales suffered a significant decline, falling nearly 50% from 16 million units to 8.96 million. Meanwhile, the number of artists selling over 3 million albums decreased from 11 to seven, with no group exceeding 5 million units.
Increased investments in rookie groups have further strained profit margins. YG launched BabyMonster, a multinational girl group; SM debuted Dear Alice, a U.K.-based boy group; and HYBE introduced KATSEYE, a U.S.-based group developed under the K-pop system. While these efforts aim to secure future growth, they have added to short-term financial pressures.
Despite these challenges, experts expect the industry to recover later in the year, buoyed by the anticipated return of BTS and BLACKPINK as full groups. Rookie groups like ILLIT, TWS, and NCT Wish, which debuted between 2023 and 2024, are also projected to contribute to revenue growth.
Securities firms predict combined revenue for the four major agencies to increase by 16.4% in 2025, reaching 4.8 trillion won, with operating profit surging 60.6% to 661.3 billion won. Hyundai Motor Securities anticipates that music-related sales, including albums, streaming, and concerts, will hit 1.87 trillion won by the first quarter of 2026, with HYBE’s operating profit potentially soaring 80% year-on-year.
YG Entertainment, the only major company forecast to post losses in 2024, has announced plans to exit the actor management business. Its 24 actors are expected to depart upon the expiration of their contracts. The company has also sold a 60% stake in the drama production firm Studio Plex and shut down its dance management label, YGX.
The restructuring aims to refocus YG’s efforts on music and restore profitability by 2025.
Experts warn that K-pop’s long-term growth hinges on innovation and regulatory reforms. “K-pop needs new and groundbreaking talent to thrive,” said Lee Jang-woo, a professor of business administration at Kyungpook National University. “The rising costs of nurturing rookie groups and regulatory limits on contract lengths have made it harder to recoup investments. Regulatory reforms and incentives are urgently needed to empower smaller agencies, like HYBE once was, to create global stars.”
