The stock prices of entertainment companies have been rising since BLACKPINK announced their contract renewal
The prices of entertainment company stocks were previously on a decline due to concerns over the hiatuses of prominent artists in the K-pop scene, such as BLACKPINK and BTS, as well as the series of drug scandals. However, expectations for growth in the entertainment market are increasing
On December 6th, YG Entertainment’s stock price soared 25.6% to 60,300 won. It went down 3% on the 7th but rebounded on the 8th. Stock analysts believe that the news of BLACKPINK’s contract renewal has improved investors in the stock market. On the 6th, YG announced that they already completed the resolution of the board of directors on signing new exclusive contracts for all 4 members of BLACKPINK.
It is said that BLACKPINK’s contract renewal has stabilized YG’s stock performance. Thanks to this, stocks of other entertainment companies also gained momentum. HYBE increased 7% within two days, on the 6th and 7th, while SM and JYP also witnessed rises of 3-5% in stock prices.
In the second half of this year, the stocks in the entertainment industry showed an unstable trend. There were both major and minor external forces that affected the stock performance, such as drug-related controversies and suspicions of SM’s stock price manipulation. There were also concerns over the decrease in Chinese fans’ collective purchases. According to Daol Securities, K-pop’s music exports to China from January to October this year were about $28 million, which is half the record of the same period last year ($48 million).
However, experts suggest that we should pay attention to the US market, which is growing rapidly and is about to surpass traditional K-pop markets such as China and Japan. Top 100 K-pop groups attracted 9.2 billion streams (as of October) in the US this year, showing an increase of 39% year-on-year. The share of K-pop album exports to the US also surged from 12% (2019) to 22% this year.
Selecting HYBE and JYP as the most promising entertainment agencies, Hana Securities analyst Lee Ki-hoon said, “If 8 rookie groups, including their US groups, debut in the first half of next year, they will be able to gain growth and their stock price can also recover to reach new peaks”.
Kyobo Securities analyst Park Sung-guk also stated, “The keyword for entertainment companies in 2024 will be ‘the US’”, adding “The US has always been the No.1 market that occupies a remarkable share of 41% in the global music market. It has a great influence on raising artists’ popularity and reputation around the world”.