(This August 13 story corrects to show that 2019 and 2020 H1 results are based on different accounting standards in paragraph 3, changes percentage change to profit figure in paragraph 1)
SEOUL (Reuters) - Big Hit Entertainment, the management label of hugely popular South Korean K-Pop group BTS, saw 49.7 billion won ($41.9 million) in half-year profits as its online concert and merchandise sales more than offset event cancellations during the COVID-19 pandemic.
Earlier this month, Big Hit received preliminary approval for its planned initial public offering (IPO), with a listing expected later this year. Some analysts have forecast the IPO could value the company at 4 trillion won ($3.4 billion) or more.
Big Hit on Thursday posted 49.7 billion won in operating profit on 294 billion won in revenue in the first half of 2020. This compares to about 39.1 billion won operating profit and 201 billion won in revenue during the first half of 2019, based on a different accounting standard.
“Big Hit responded well in the face of an unexpected global crisis,” global business CEO Lenzo Yoon said in an online presentation.
BTS, a seven-member boy band with a message of self-confidence, became the first group since the Beatles to score three No. 1 albums in a year on the Billboard 200 charts in 2019.
Although BTS’ planned tour of more than 20 concerts in the United States, Europe and Asia was cancelled, some 756,000 people globally paid to watch BTS’ online concert in June simultaneously, an audience size equal to about 15 stadium concerts, Yoon said.
About 746,000 merchandise items for the online concert were sold within a week on its Weverse dedicated app.
Big Hit also sells secondary content including artist-based characters, illustrated books of lyrics, textbooks, games and licensing including BTS edition of Samsung Electronics smartphones and Starbucks products, which company officials said had helped it prosper despite the COVID-19 pandemic.
Big Hit acquired two K-Pop labels and established a third as a joint venture since last year, chairman and CEO Bang Si-hyuk said, addressing market concerns that Big Hit needs to diversify its revenue streams beyond BTS.
Signings include boyband Seventeen, which sold 1.45 million albums last year.
Reporting by Joyce Lee; Editing by Lincoln Feast and William Mallard
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