As of Nov. 22, the combined market capitalization of South Korea’s four leading entertainment companies—JYP Entertainment, YG Entertainment, SM Entertainment, and HYBE—reached 14.05 trillion won ($10.5 billion), reflecting a 19% increase from 11 trillion won ($7.8 billion) at the end of October, according to Korea Exchange data released on Nov. 24. Among the four, JYP Entertainment recorded the highest growth, with its market capitalization surging 35% this month, followed by YG Entertainment at 28%, HYBE at 15%, and SM Entertainment at 13%.
Exchange-traded funds (ETFs) tied to entertainment stocks have also been on the rise. The “ACE KPOP Focus” ETF jumped 20.3% this month, while the “HANARO Fn K-POP & Media” and “TIGER Media Contents” ETFs gained 15.3% and 13.4%, respectively. These performances stand out sharply against the broader market, as the KOSPI and KOSDAQ indices fell by 2% and 9%, respectively, during the same period. By comparison, entertainment stocks averaged a robust 23% gain.
Earlier this year, the entertainment sector grappled with challenges, including declining album sales and controversies such as the HYBE-ADOR dispute. However, expectations of strong earnings growth in 2024—driven by the highly anticipated returns of major acts like BTS and BLACKPINK—have reignited investor confidence.
“This year, there were concerns about the sustainability of the entertainment sector’s earnings model and its long-term growth potential, as core revenue sources like album sales slowed, compounded by issues involving HYBE and ADOR,” said Lee Nam-su, a researcher at Kiwoom Securities. “But in 2024, the comeback of super IPs like BTS and BLACKPINK is expected to diversify revenue streams through albums and concerts.”
Entertainment stocks have also emerged as a “tariff-safe zone” amidst uncertainties surrounding U.S. President-elect Donald Trump’s proposed trade policies. “Fandoms can’t be regulated by tariffs,” said Kim Jong-min, a researcher at Samsung Securities. “It’s now common to see K-pop artists on the Billboard charts, and the U.S. share of album exports has grown significantly.”
Ha In-hwan, a researcher at KB Securities, highlighted the sector’s relative insulation from regulatory pressures under Trump’s focus on promoting domestic manufacturing and job creation. “Service industries, which have minimal impact on U.S. employment, are less likely to face regulatory scrutiny. Additionally, it’s unclear whether tariffs would even apply to music streaming or concert ticket sales,” Ha explained.
