Greetings! Thank you for joining us for HYBE's third quarter earnings call. This is Kim Su-Kyung, Head of the IR team. I'll be moderating today's call, which will proceed through consecutive interpretation. Today, our CEO is on an overseas business trip, so COO Kim Tae-ho will present business highlights for the third quarter and future plans, and CFO Lee Kyung Joon will present the financial highlights, followed by the Q&A session. Please be advised that today's earnings call is based on preliminary consolidated estimates under KIFRS, and thus subject to change during an external audit. Now I will hand over to COO Kim Tae-ho.
안녕하세요. COO 김태호입니다. 저희 하이브가 유가증권 시장에 상장한 지 어느덧 3년이라는 시간이 흘렀습니다. 2020년 10월, 엔터테인먼트 업종 최초로 코스피 상장에 성공한 하이브는 멀티 레이블 전략을 바탕으로 한 유기적인 성장과 M&A를 통한 비유기적 성장을 병행하며, 아티스트 포트폴리오 다변화 및 K-POP을 넘어서는 장르 확장을 통해 특정 아티스트의 성공 여부에 의해 실적 때의 등락이 좌우되던 기존 엔터 산업의 틀을 바꾸며 혁신과 성장을 지속해 오고 있습니다. 여기에 음악과 테크의 융합, 아티스트 IP를 바탕으로 한 다양한 사업을 진행하며, 엔터테인먼트업의 범위에 대한 기존의 고정관념을 깨고 지속적으로 영역을 확대해 왔습니다. 그 결과, 지난 3년간 매출 기준 연평균 성장률 49%를 달성하면서 빠른 성장을 지속해 오고 있습니다.
Good morning, this is COO Kim Tae-ho. It's been already three years since HYBE was listed on the stock exchange. As the first entertainment company to get listed on KOSPI in October 2020, HYBE has consistently pursued both organic growth centered on a multi-label strategy and inorganic growth through M&As, to diversify the artist portfolio and expand these genres beyond K-pop, which enabled the company to achieve sustained growth and innovation by changing the traditional dynamics of the entertainment industry, where earnings were heavily dependent on the success of a few artists. Furthermore, we have pursued convergence between music and technology, and carried out diverse projects using artist IP to disrupt existing notions around the scope of the entertainment business and expand our business horizon continuously. As a result, HYBE has been enjoying rapid growth with the annual revenue growth of 49% for the past three years.
지난 9월, 하이브가 이렇게 성장할 수 있었던 원동력이었으며, 하이브의 미래 핵심이기도 한 방탄소년단 멤버 전원이 전속계약 재계약을 완료하며, 앞으로도 하이브와 빅히트 뮤직 가족으로서 함께 하게 되었다는 기쁜 소식을 알려드렸습니다. 이번 재계약을 통해 많은 팬분들이 기다리시는 2025년 방탄소년단의 완전체 활동 또한 함께 준비할 수 있게 되었습니다. 2025년에는 방탄소년단과 아미 모두에게 가장 의미 있는 앨범이었던 화양연화의 10주년 기념 프로젝트를 진행할 예정이니 많은 기대 부탁드립니다.
In September, we announced good news that all the members of BTS, a key driver of HYBE's growth and a core of HYBE's future, renew their exclusive contracts with us to stay with HYBE and Big Hit Music. With this contract renewal, we are now able to prepare for a much-anticipated comeback of BTS in 2025. Also, in 2025, we will carry out a special project to celebrate the tenth anniversary of The Most Beautiful Moment in Life, which is the most meaningful album for both BTS and the Army. So we ask for your interest.
이번 분기에도 방탄소년단은 다양한 콘텐츠로 팬분들과 함께했습니다. 7월 15일 발매된 방탄소년단의 데뷔 후 10년간의 이야기를 담은 오피셜 북, Beyond the Story는 한국 저자 도서 최초로 뉴욕타임즈 베스트셀러 1위를 기록하였고, 발간 당일에는 미국, 영국, 브라질, 호주, 일본 등 여러 국가에서 아마존 베스트셀러 1위에 오르는 돌풍을 일으켰습니다. 또한, 12월 해당 책의 영상 버전이라고 할 수 있는 다큐멘터리 BTS Monuments: Beyond the Star을 디즈니 플러스를 통해 공개할 예정입니다. 이와 같이 하이브는 방탄소년단이 직접 그룹 활동을 하지 못하는 상황이더라도 팬분들을 위해 준비했던 다양한 콘텐츠들을 계속해서 선보일 예정입니다.
This quarter, again, BTS entertained their fans with diverse content. Released on July 15th, BTS official book, titled Beyond the Story, which contained their stories for the past ten years since debut, became the first book authored by Koreans to be ranked number one on the New York Times best seller list. On the first day of release, the book was also ranked number one on Amazon Best Seller list in many countries, including the U.S., the U.K., Brazil, Australia, and Japan. In addition, a documentary film titled BTS Monument: Beyond the Star, a video edition of the book, will be released in December this year on Disney Plus. Like this, HYBE will continue to offer diverse content related to BTS for their fans, while BTS members are not able to appear as a group.
멤버들의 개인 활동 또한 활발히 이어지고 있습니다. 뷔는 지난 9월 발매한 앨범 Layover를 통해 초동 판매 210만 장을 기록하면서 국내 최초로 초동 200만 장을 넘긴 솔로 아티스트가 되었습니다. 이 앨범은 빌보드 200에 2위로 진입했으며, 수록곡 전곡이 스포티파이 글로벌 주간 차트에 차트인하는 기록을 세웠습니다. 정국은 디지털 싱글 Seven으로 13주 연속 핫 100에 이름을 올린 것에 이어, 이후 공개한 디지털 싱글 3D로 핫 100 5위를 기록하였습니다. 오는 11월 3일에는 팬분들의 뜨거운 반응을 얻은 두 음원을 포함한 첫 솔로 정규 앨범, Golden을 발매할 예정입니다. 이번 앨범은 Seven의 프로듀서, Andrew Watt와 Cirkut이 타이틀곡 Standing Next to You를 프로듀싱했습니다.
그 외에도 Ed Sheeran, Shawn Mendes와 같은 글로벌 팝스타들이 대거 참여하여 앨범 제작에 심혈을 기울인 만큼 많은 기대 부탁드립니다. BTS members' individual activities are well underway. V released Layover in September, which sold 2.1 million copies in the first week, making him the first Korean solo artist with the first week sales of more than 2 million copies. This album ranked second on the Billboard 200, and all the tracks entered the global weekly chart on Spotify. Jungkook's digital single, Seven, stayed on the Hot 100 chart for 13 weeks in a row, and his digital single, 3D, ranked number five on Hot 100. On November 3rd, he will release his first solo regular album titled Golden, including the two single tracks that received much love from fans. For this album, Andrew Watt and Cirkut, the producers of Seven, produced a lead song, Standing Next to You, and the other global musicians, such as Ed Sheeran and Shawn Mendes, participated in the album production. So we ask for your continued interest and support.
올해 눈부신 성장을 보이고 있는 Seventeen은 Circle 차트 기준, 올해 1월부터 9월까지 1,100만 장이 넘는 앨범을 판매한 것에 이어, 지난 10월에 발매한 미니 11집 Seventeen's Heaven이 초동 판매 509만 장을 돌파하며 K-pop 역대 초동 1위를 달성했습니다. 발매에 앞서 진행된 오프라인 이벤트, Seventeen Street에는 6일간 10만 명이 넘는 팬들이 방문했으며, 이외에도 올해 진행된 Seventeen 카페와 백화점 팝업 등 다양한 오프라인 이벤트가 모두 역대 최고 방문객 기록을 갱신하고 있습니다. 이는 코로나 이후 Seventeen의 팬덤이 앨범과 콘서트뿐만 아닌 다양한 방식으로 아티스트들을 만나며 콘텐츠들을 즐기고 있다는 것을 확인할 수 있습니다. Seventeen은 8월 첫 일본 베스트 앨범, Always Yours를 발매, 누적 출하량 75만 장을 기록하며 골든디스크 트리플 플래티넘 인증을 받는 등 일본에서도 기록적인 앨범 판매량을 보이고 있습니다. 이어서 Seventeen은 9월 도쿄를 시작으로 일본 돔 투어를 진행해 총 50만 명 이상의 팬을 만날 예정이며, 도시형 콘서트 플레이 파크인 더 시티 프로젝트를 일본 4개 도시에서 진행해 팬분들께 더 다양한 볼거리와 즐길거리를 제공할 예정입니다. 또한 방콕, 불라칸, 마카오 3개 도시에서 사회의 추가 공연을 진행하여, 내년 1월까지 총 9개 도시에서 18회의 공연에 걸쳐 이번 해외 투어 Follow를 마무리하게 될 예정입니다.
Enjoying exclusive explosive growth this year, Seventeen sold more than eleven million album copies from January to September this year, according to the Circle Chart. Their eleventh mini album, Seventeen's Heaven, released in October, saw the first week sales of more than 5.09 million copies, breaking the first week sales record of the K-pop industry. Before the album release, an offline event called Seventeen Street was held to attract more than one hundred thousand visitors for six weeks, six days, and other offline events, including Seventeen Cafe and department store pop-up event, were visited by the record number of fans. These results show that since the end of the pandemic, Seventeen fans have not only been consuming albums and concerts, but also enjoying various artist content in diverse ways. The group is also enjoying high album sales in Japan, where their first Japan album, best album, Always Yours, released in August, saw the accumulated shipments of seven hundred fifty thousand copies, awarding the group with the Golden Disc Triple Platinum Certification. Starting in Tokyo in September, Seventeen will meet with a total of five hundred thousand fans during their Japan Dome tour, and the City Project, an urban style concert play park, will be carried out in four cities in Japan to offer diverse entertainment content for fans to enjoy. Four additional concerts will be held in Bangkok, Bulacan, and Macau before concluding the overseas tour, titled Follow, that includes eighteen concerts in nine cities in January.
올해 초부터 활발히 활동을 이어간 Tomorrow by Together는 10월 발매한 정규 앨범 '이름의 장: Freefall'로 두 개 앨범 연속 더블 밀리언셀러가 되었습니다. 이번 앨범은 미국에서도 빌보드 200에 3위로 진입하며, 올해 발매한 세 개 앨범 모두를 빌보드 200에 진입시켰습니다. Jonas Brothers, Anitta 등 유명 글로벌 아티스트들과의 협업을 통해 북미 시장에서 빠르게 팬덤 확대를 하며, 지난 8월 미국 시카고에서 K-pop 아티스트 최초로 Lollapalooza 헤드라이너로서 완벽한 퍼포먼스를 보여주는 등 점차 북미 시장에서의 입지를 공고히 하고 있습니다. 또한 지난 7월 일본 정규 2집 발매 후 개최된 교세라 돔 콘서트를 성공적으로 마무리하며, 일본에서의 인기를 증명하기도 했습니다.
Tomorrow by Together has been active since early this year, and their regular album, released in October, titled The Name Chapter: Free Fall, made the group a double million seller. This new album entered the US Billboard 200 as number three, so the three albums they released this year have all entered the Billboard 200. Their fandom in North America is growing rapidly, thanks to the collaborations with global artists such as Jonas Brothers and Anitta. In August, Tomorrow by Together became the first K-pop artist to be the headliner at Lollapalooza, Chicago, and wowed the audience with their perfect performance, and their presence in the North American market is expanding ever further. The group is also gaining popularity in Japan, with a successful concert at Kyocera Dome, held right after the release of the second Japanese regular album in July.
지난 10월 31일, 빌리프랩이 하이브의 100% 자회사로서 인수 완료되었습니다. 빌리프랩 엔하이픈 또한 계속해서 활발하게 활동을 이어가고 있는데요. 지난 6월, 미니 4집 다크 블러드의 활동 이후, 7월 서울을 시작으로 페이트 월드투어를 진행했고, 9월에는 세 번째 일본 싱글 유 판매 50만 장을 넘기며 일본 골드 디스크 더블 플래티넘 인증을 받았습니다. 첫 일본 돔 투어 역시 성공적으로 마무리되었습니다. 10월에는 미국 LA에서 첫 스타디움 투어 공연을 개최했으며, 미국 6개 도시에서 총 8만 5천여 관객을 만났습니다. 또한, 엔하이픈은 하이브 오리지널 스토리 다크문: 달의 제단의 두 번째 OST를 공개하고, 롯데월드와의 협업을 통해 다크문 위드 엔하이픈 인 롯데월드에서 스페셜 공연을 갖는 등 오리지널 스토리 관련 활동도 꾸준히 이어가고 있습니다. 이달 17일에는 미니 5집 오렌지 블러드 앨범 발매를 앞두고 있으니 많은 기대 부탁드립니다.
On October 31st, Belief Lab became a HYBE's wholly-owned subsidiary, and their group ENHYPEN is continuing with diverse projects. After concluding the activities related to the fourth album, Dark Blood, in June, ENHYPEN conducted a world tour titled Fate, starting in Seoul in July, and their third Japanese single, You, sold more than 500,000 copies in September, which brought the group a Japanese golden disc, double platinum certification. Their first dome tour was concluded successfully, and their first US stadium concert was held in LA in October, and they met with a total of 85,000 fans in six cities in the US. The group released a second OST track of HYBE's original story, Dark Moon, and held a special performance at the stage of the Dark Moon with ENHYPEN in Lotte World through collaboration with Lotte World Entertainment Park. Their fifth mini album, Orange Blood, will come out on November 17th, so we ask for your continued support.
지난 8월부터 개최된 르세라핌의 월드투어 FEARNOT ACROSS는 팬분들의 사랑을 받아 도쿄, 홍콩, 자카르타 등 아시아 6개 도시에서 총 11번의 공연이 성황리에 마무리되었으며, 지난 27일에는 2023년 오버워치와 협업한 첫 영어 디지털 싱글 Perfect Night을 발매하며 글로벌 팬들에게 다시 한 번 뜨거운 반응을 얻고 있습니다. 뉴진스는 두 번째 미니앨범 Get Up으로 빌보드 200 위를 달성한 뒤 롤라팔루자와 섬머소닉 등 국내외에서 다양한 오프라인 활동을 이어나가고 있습니다. 뉴진스는 2023 리그 오브 레전드 월드 챔피언십 주제곡인 Gods를 발표하며 전 세계 게이머들과 음악 팬들에게 주목받고 있습니다.
Le Sserafim's world tour, Flame Rises, that began in August, was successfully concluded with eleven concerts in six cities in Asia, including Tokyo, Hong Kong and Jakarta. On October 27th, they released their first English language digital single, Perfect Night, in collaboration with Overwatch 2, which is receiving much love from global fans. NewJeans' second mini album, Get Up, topped Billboard 200, and the group carried out diverse offline activities in Korea and overseas, including the Lollapalooza stage and the Summer Sonic Festival. NewJeans released Gods, the official anthem of the League of Legends 2023, which is also gaining much attention from the gamers and music fans around the world.
아직 데뷔 1년도 되지 않았지만, 일본 오리콘 차트, 빌보드 재팬 등 현지 주요 차트 1위를 하는 등 열풍을 일으키고 있는 하이브의 일본 현지 그룹 &TEAM도 10월 15일, 첫 정규 앨범을 발매하며 컴백할 예정입니다. 올해 5월에 데뷔한 신인 BOYNEXTDOOR는 9월 발매한 미니 1집 WHY로 전작의 데뷔 싱글의 4배인 약 45만 장의 판매고를 달성했고, 빌보드 200에 차트인하며 본격적인 성장을 보여줬습니다. BOYNEXTDOOR는 한국 활동 종료 후 일본 슈퍼팝 공연을 포함한 다양한 오프라인 활동을 이어나가며 차세대 공연 강자의 모습을 보여주고 있습니다. 이에 더하여 플레디스 엔터테인먼트에서 준비 중인 보이그룹 또한 내년 1분기 중 데뷔를 할 예정이니 많은 관심 부탁드립니다.
N Team debuted less than a year ago, but the Japanese local group of HYBE is making waves, topping major local charts such as the Oricon Chart and the Billboard Japan. Now, N Team is going to come back with the first regular album on November 15th. Debuted in May this year, Boy Next Door released the first mini album, Why, in September, which sold around 450,000 copies, four times the sales of their debut single. They entered the Billboard 200 chart, showing a solid growth trend. Following successful activities in Japan, Boy Next Door is engaging in Korea in various offline projects, including the Super Pop concert in Japan, which shows their strength as a rising performance group. In addition, a new boy group from Pledis Entertainment will debut in the first quarter of next year, so we look forward to your continued interest.
UMG의 게펜 레코드와 함께 제작하고 있는 더 데뷔 드림 아카데미는 지난 9월 콘텐츠 릴리즈를 시작해 다양한 미션을 진행 중에 있습니다. 전 세계에서 지원한 참가자들의 팬들은 올림픽처럼 자국 출신 또는 같은 문화권 참가자들을 응원하고 있습니다. 일례로 1차 경연의 지역별 투표율은 미국, 필리핀, 인도네시아, 인도, 브라질 순으로 다양한 국가에 고르게 분포되어 있습니다. 더 데뷔 드림 아카데미는 현재 세 번째 미션을 진행 중이며, 2주 뒤인 11월 18일 그랜드 파이널 라이브 무대에서 최종 데뷔 그룹이 정해질 예정입니다. 오디션에서 미처 다 풀지 못한 서사는 에미상 후보에 4차례 오르는 다큐멘터리 비커밍의 감독, 나디아 홀그랜이 제작한 다큐멘터리로 넷플릭스를 통해 공개할 예정입니다. 이 프로젝트는 K-POP 시스템을 미국 팝 시장에 접목시킨 첫 시도로, 우리는 이러한 방법론을 계속해서 적용하여 지역과 장르의 확장을 지속할 것입니다.
Next, the debut Dream Academy, a joint project with Geffen Records of UMG, started to release content in September, and the participants from diverse countries are currently taking on various missions. Fans are supporting contestants from their own countries or from similar cultural backgrounds, as if they are cheering for athletes during the Olympics. For instance, votes for the first mission poured in from diverse countries around the world, with the most votes from the US, followed by the Philippines, Indonesia, India and Brazil. The third mission round is well underway, and the members of the new girl group will be revealed in the grand live finale stage on November 18th. Their journey will be chronicled in a Netflix documentary series directed by Nadia Hallgren, a four-time Emmy-nominated director, known for the Netflix documentary, Becoming. This is the first project where the K-pop system is being applied in the US pop market, and it demonstrates the methodology that we will continue to use to expand our geographies and genres. Now, let me update you on Weverse. In September, thirteen artist teams of SM Entertainment opened their fan communities on Weverse, which has become an unrivaled global fandom life platform with 100 million downloads, 10 million MAU, and 1 billion live streaming views. Also, Weverse was nominated as a candidate in Korea and Japan for the App of the Year award by Google Play. In October, Weverse and Weverse Shop were integrated to enhance user convenience. Now, users can watch live sessions of artists in the fan community and purchase albums and official merch all on the same platform. We are diversifying business models, including the launch of Weverse by fans, where fans can design and custom order official merchandise, and we're further advancing services to expand the fan experience. The first game to be published by Hybe IM is Astra: Knights of Veda, and there was a global beta test from October 9th till the 17th. As a belt scroller game that can be played on both the PC and the mobile device, the game title has unique art styles continuing from the first title, as well as a well-constructed storyline, which is why global gamers are looking forward to this well-made classic. While the beta test revealed only certain limited content, it was already highly regarded by the testers in terms of the development of the game IP, including interesting storylines and a universe further developed from the previous game and new battle systems. Hybe IM and Flint will actively cooperate and incorporate feedback from the global beta test users and thoroughly prepare for a successful official release. We would like to thank the investors for their continued support, and we will continue to work hard to surprise the market with outstanding business results. Now, let me hand over to CFO Lee Kyung Jun, who will report on the earnings highlights.
Hello, this is Lee Kyung Jun. First, I will talk about the third quarter consolidated financial results. In the third quarter of 2023, HYBE's revenue was ₩537.9 billion, an increase of 21% compared to the same period of the previous year. Of this, direct participation revenue, such as albums, performances, and advertising appearances, was ₩382.4 billion, and indirect participation revenue, such as MD licensing, content, and fan club revenue, was ₩155.4 billion. BTS V, Seventeen, NewJeans, Tomorrow X Together's albums, and Seventeen, Enhypen, and Le Sserafim's world tours were well received by fans, resulting in a significant increase in direct participation revenue compared to the same period of the previous year. Operating profit in the third quarter of 2023 was ₩72.7 billion, an increase of 20% compared to the same period of the previous year, and the operating profit margin was 13.5%.
Good morning, this is CFO Lee Kyung Jun. Let me report on HYBE's consolidated financial results for the third quarter of 2023. The consolidated Q3 revenue posted ₩537.9 billion, up 21% year-on-year. Revenue with direct artist involvement, including album sales, concerts, advertisements, and appearances, was ₩382.4 billion, while revenue with indirect artist involvement, including merchandise, licensing, content, and fan club sales, recorded ₩155.4 billion. The revenue with direct artist involvement grew significantly year-over-year, thanks to the success of the albums by BTS V, Seventeen, NewJeans, and Tomorrow X Together, as well as the world tours by Seventeen, ENHYPEN, and LE SSERAFIM. Operating profit in Q3 posted ₩72.7 billion, up 20% year-over-year, while the operating margin recorded 13.5%.
이제 매출을 부문별로 좀 더 자세히 말씀드리도록 하겠습니다. 2023년 3분기 직접 참여형 매출 중 앨범 부문은 2,641억원으로 작년 동기 대비 104% 증가하였습니다. 이는 앨범 판매량의 증가도 있지만, 음원 매출의 증가도 동반된 결과입니다. 음원, 즉 스트리밍은 음악을 청취하는 방식 중 가장 높은 비중을 차지하고 있으며, 글로벌 스트리밍 시장은 지난 5년간 연평균 약 20% 수준으로 성장해 오고 있습니다. 하이브의 올해 1-3분기 음원 매출액 또한 전년 동기 대비 51% 성장하였습니다. 올해 1분기부터 3분기까지의 음원 매출을 분류하면 국내 레이블이 52%, 컨트리 레이블인 BML가 34%, 힙합 레이블인 QC가 14%를 차지하고 있습니다. 이렇게 하이브는 레이블 인수를 통해 장르를 확장하고 다양한 음악 포트폴리오를 구성하고 있습니다. 이에 더해 인수가 아닌 오가닉 성장을 만들기 위한 프로젝트인 더 데뷔 드림 아카데미를 통해서도 팝 장르로의 확장을 향한 도약을 꿈꾸고 있습니다.
Let me give you more detail by revenue category. In the third quarter of the direct artist involvement revenue, album sales recorded ₩264.1 billion, up 104% year-over-year. The result is not only due to physical album sales, but also thanks to the increase in music streaming revenue. Nowadays, streaming is the most preferred method to listen to music, and the global music streaming market has been growing at an annual rate of 20% on average for the past five years. Hive streaming revenue from Q1 to Q3 this year grew 51% year-over-year as well. Of the streaming revenue, the domestic labels account for 52%, while BMLG, a country music label, is 34% and QC, a hip-hop music label, is 14%. The breakdown shows that Hive has been adding genres through label acquisitions to diversify the music portfolio. In addition, the Debut Dream Academy is a project for us to pursue organic growth, which will help us expand into the pop genres.
2023년 3분기 공연 부문에서는 869억원의 매출을 기록해 전년 동기 대비 84% 증가하였습니다. 간접 참여형 매출 중 MD 및 라이센싱과 콘텐츠 부문의 3분기 매출은 각각 857억원과 487억원을 기록하며 견조한 실적을 보였습니다. 이번 3분기에는 응원봉을 포함한 세븐틴, 엔하이픈의 투어 MD와 방탄소년단 데뷔 10주년을 기념하는 BTS Official Book: Beyond the Story가 매출에 기여하였습니다.
In Q3, concert sales recorded ₩86.9 billion, up 84% year-on-year. Of the indirect involvement revenue, MD and licensing revenue showed a solid trend, posting ₩85.7 billion and ₩48.7 billion, respectively. In the third quarter, tour merch for Seventeen and Enhypen, including light sticks, as well as Beyond the Story, the BTS official book to celebrate the tenth anniversary of their debut, contributed to the quarterly revenue in this category.
계속해서 글로벌 팬 커뮤니티 플랫폼, 위버스와 관련된 KPI에 대해 설명드리도록 하겠습니다. 매월 팬들의 방문 수인 MAU는 3분기 평균 전분기 대비 10% 성장한 약 1,050만 명 수준을 기록했습니다. 기존 아티스트들의 팬덤 확대와 더불어 3분기 중 SM 아티스트를 포함한 국내외 아티스트들이 입점함에 따라 안정적으로 1,000만 MAU 고지에 안착하였으며, 서비스의 확장과 고도화가 본격화되고 있기에 MAU는 지속적으로 상승할 것으로 기대하고 있습니다. 특히 13팀의 SM 아티스트들이 입점함에 따라 각 아티스트들의 팬클럽 가입이 활발히 진행되어 더욱 더 두터운 사용자풀을 확보하게 되었습니다. 페이 유저 한 명당 한 달의 결제하는 평균 금액인 ARPPU는 직전 분기 대비 소폭 감소하였으나, 분기 중 위버스에 새로이 가입한 유저가 늘어남에 따라 총 결제 금액은 직전 분기 대비 3% 가량 상승하였습니다.
Moving on to KPIs of Weverse, a global fan community platform. The average MAU in the third quarter is around 10.5 million, up 10% quarter-over-quarter. On top of the growth of the fandom of the existing artists, Korean and foreign artists, including SM Entertainment artists, have joined Weverse in the third quarter, boosting the MAU to surpass the 10 million mark. With continued service expansions and enhancements, MAU is expected to continue its growth trend. In particular, 13 teams of SM Entertainment are now on Weverse, and their fan clubs on the platform are growing rapidly. The ARPPU, which measures the average monthly revenue per paying user, recorded a slight decline quarter-over-quarter, but the total payments made on the platform grew 3% quarter-over-quarter, thanks to the increase in new users.
Foreign language.
In 2024, we will be able to obtain tangible results from various businesses that we've been investing in for many years. More specifically, we look forward to seeing the fruits of our multi-label strategy, the musical diversity that we've been building, and our solutions business, which spans platforms, games, and AI to provide fans with an unprecedented variety of entertainment. We will continue to do our best to make the rest of the year and the upcoming 2024 the beginning of a brilliant future for all of us. Thank you!
Now Q&A session will begin. Please press star three, that is star and three if you have any questions. Questions will begin according to the order you have pressed the number star three. For cancellation, please press star four, that is star four on your phone. The first question will be provided from Eric Cha from Goldman Sachs. Please go ahead.
Uh, uh, foreign language.
I'm Eric Cha from Goldman Sachs. Thank you for the opportunity to ask you questions. I have two questions. First of all, when it comes to your album sales revenue, we expected that there will be a quarter-over-quarter decline in the physical album sales because of the schedules in album release. However, we saw that there was an increase in your album sales revenue quarter over quarter. So I'd like to know whether this is thanks to the increase in streaming revenue, which was able to offset the decline in the physical album sales. I understand that Hybe wishes to make music more mainstream rather than just being recognized as K-pop. So in that sense, is it correct to understand that your streaming revenue portion will continue to increase? And to what extent the contribution of streaming revenue increase in the future? The second question is rather simple. I'd like to understand when ITACA Holdings artists will resume their activities, and what kinds of schedules you have in your plan, and I'd like to understand their contributions to your revenue and the operating profit going forward. If you can give us some guidance, I would appreciate that. Thank you.
아, 이를 위해서 미국에서도 다양한 활동들을 벌이고 있습니다. 이와 함께 이 스트리밍이 커짐에 따라서 저희들이 디스트리뷰터와의 협상력을 계속 높여 가고 있습니다. 그다음에 두 번째 질문 주신 이타카 아티스트들의 주요 활동은 올해는 아티스트들의 개인적인 사정 때문에 활동들이 없었지만, 내년부터는 활동을 본격적으로 해주실 것이라고 기대하고 있습니다.
I'm CFO Lee Kyung Jun. Let me address your questions. First of all, we do not see any major decline in the trend of physical album sales. When you look at the albums released by our artists in the third quarter, their sales results were better than the sales results of the previous albums. Of course, overall, the growth rate in the physical album sales has been slowing. However, it is mainly due to a particular market, but where normalization is taking place. But in other markets around the world, album sales, especially physical album sales, are growing. So in the near term, we do not see any major decline in our physical album sales trend. However, we do understand the importance of music streaming revenue, which was mentioned during the presentation, and the global streaming market is growing rapidly. Therefore, we are making various efforts to increase our share in the global music streaming market, and we are carrying out various activities in the US, and we're trying to strengthen our negotiating power over distributors that offer streaming services. Secondly, moving on to the artists of Ithaka Holdings. They were not really very active due to some of the personal reasons, but we expect that they will resume their activities next year. Thank you.
네, 다음 질문 받겠습니다. 네, 다음으로 질문해주실 분은 CLSA의 김동준 님입니다. The following question will be presented by Kim Dong Jun from CLSA. Please go ahead.
아, 네, 질문 기회 주셔서 감사합니다. 저 앞에 질문 주셨던 에릭 배님 질문에 그냥 조금 추가해서 여쭤보고 싶었던 거 하나가 혹시 스트리밍 비중이 저희 지금 뮤직 비중에서 어느 정도 되는지 가이던스 주실 수 있는지 말씀 부탁드리고요. 두 번째 질문은 저희가 연초 그리고 작년 연말 주셨던 가이던스는 상당히 보수적이었는데, 올해 사분기도 많은 활동이 준비되어 있으셔서 2023년에는 상당히 좋은 성과를 좀 내실 거라 보고 있지만, 내년에 이제 방탄 주요 멤버분들도 군 복무 공백기가 생길 거고, 투모로우바이투게더도 특정 마켓뿐 아니라 좀 미국 빌보드에서도 조금 성과가 내려오고, 세븐틴도 워낙 이제 베이스가 높고 성장률이 좀 둔화되는 추세인데, 이렇게 좀 매출 비중이 높은 주요 IP들의 성장세 자체 좀 둔화가 되면 내년 성장성을 좀 어떻게 보시는지 말씀해 주시면 감사할 것 같습니다.
I'm Kim Dong Jun from CLSA. Thank you for this opportunity. I have a couple of follow-up questions. When it comes to the share of music streaming revenue, I'd like to understand how much of a portion is currently being taken by the music streaming. Secondly, I can see that your guidance that was provided at the end of last year and earlier this year was rather conservative. But we see that there are a lot of activities planned for the fourth quarter as well. So we believe that your earnings results for the full year 2023 are going to be better than expected. However, moving on to next year, there are several BTS members that are going to join the military, and the TXT's performance may slightly go down, especially seen in terms of the Billboard chart. Seventeen has been really successful. So because of the base effect, there may be some slowdown in their growth. So considering the potential slowdown in the growth of revenue coming from these major IPs, what is your overall outlook for next year's performance? Thank you.
예, 이경준입니다. 먼저 스트리밍 비중 자체를 저희가 공시하고 있지 않기 때문에 말씀드리긴 어렵지만, 장기적인 관점에서 지속적인 성장 추세에 있고, 스트리밍 매출 금액 자체도 저희 매출에서 차지하는 비중이 상당하다 정도로 말씀드릴 수 있을 것 같습니다. 그리고 두 번째, 내년도에 대해서 말씀해 주셨는데, 저희는 BTS 같은 경우에는 올해도 군백기가 어느 정도 시작된 상황이었고, 내년도 이제 6월 이후에 이제 진 씨부터 시작해서 이제 다시 복귀를 하시는데, 약간의 공백기 동안에 대해서는 사전 콘텐츠들이 이미 많이 준비가 되어 있습니다. 그래서 그런 콘텐츠들이 얼마나 저희들이 시장에서 반응을 할지는 모르겠지만, 그렇게 아주 큰 매출에서의 하락이 예상되진 않는다 말씀드릴 수 있을 것 같고요. 그다음에 세븐틴 같은 경우에는 이제 성장이 이제 정체될 수 있지 않냐라고 말씀해 주셨는데, 저희가 보기로는 세븐틴의 아직 팬덤은 지속적으로 성장하는 추세에 있고요. 그다음에 내년에는 일본에서의 큰 규모의 공연들이 지금보다도 훨씬 많아지기 때문에 세븐틴의 성장 여력은 충분히 있다고 생각됩니다. 그다음에 투모로우바이투게더에 대해서도 말씀을 주셨는데, 저희 투모로우바이투게더의 지금의 곡선은 저희가 이제 생각하는 남자 보이밴드 성장 곡선에 따라서 그 시점에 맞는 전략들을 수행하고 있기 때문에, 지금이 투모로우바이투게더의 어떤 문제가 있는 시점이다, 이렇게 생각하지 않고 있습니다. 그리고 나머지 팀들에 대해서도 아직 뉴진스나 르세라핌 같은 경우에는 상당한 성장 여력이 남아있는 상황이고요. 또 내년도에 데뷔하는 신인 팀들에 대해서도 많은 기대를 하고 있습니다.
I'm CFO, Lee Kyung Jun. When it comes to the contribution of music streaming revenue in our total revenue, this is not something that we disclose to the market, so please understand. But when we look at the trend, in the medium to long term, the portion of the music streaming revenue continues to grow. So we already have a substantial portion of revenue coming from the streaming sales. So that is how I can picture the overall situation. Moving on to the second question. We already had some periods where BTS members were in the military, and next year, starting with BTS member Jimin will return after June next year. So for all these periods, we already have a lot of content and entertainment content prepared in advance. So we would of course, have to see how the market will react to these types of content. But we do not expect any major dip in the sales trend because of these absence of BTS members. Moving on to Seventeen. Of course, you mentioned that there may be some potential stagnation in the growth of Seventeen, but we do not believe so, because the fandom of Seventeen is continuing to grow and there are large scale concerts and tours prepared next year for Seventeen in Japan. So we believe that there's a lot of growth potential for Seventeen still. Moving on to Tomorrow By Together, when we are carrying out and implementing various strategies according to the time slides, in the growth trajectory of a boy band, so we do not see any major issues right now. And as for other HYBE acts including NewJeans and LE SSERAFIM, we see a lot of growth potential still remaining in their careers, so we expect a lot from them. And there will be a new group that will debut next year, which we are also anticipating much. I'm CEO Kim Tae Ho. Let me add some more additional comments. So HYBE has a variety of capabilities that can translate the success of labels into other businesses. In other words, HYBE has been preparing and working on solutions business and platform and other services, through which we can utilize the popularity of our acts, and translate them into sales in other categories. So thanks to these capabilities, we believe we will be able to continue to generate good results. And this is a methodology or model that has been already proven with the success of BTS. And I believe that these will be able to offset any concerns in the market. In addition, we acquired the entire stakes of Belift, so it is now a wholly owned company of HYBE. In the past, the results of ENHYPEN were partially recognized, but now, all the results of ENHYPEN will be fully recognized as part of HYBE's earnings, so this is going to contribute to further growth of our company. As our CFO explained, Seventeen has been quite successful in Korea, Japan and China, so these were the main markets where Seventeen gained popularity. But this year we were able to confirm that Seventeen has much potential and is expanding its fandom in other parts of the world. Therefore, there is much expectation from there, and ENHYPEN is also enjoying a continuous growth trend.
The following question will be presented by Park Sung Kook from Kyobo Securities. Please go ahead.
Hello.
I'm Tak Sangok from Kyobo Securities. Thank you for this opportunity. I have three questions. First of all, your album sales results were much better than what the market had expected, and I do not see any major significant increase in your streaming revenue per se. So can we understand that this is thanks to the increased sales of albums in Japan, where the unit cost is higher? The second question is that while HYBE is doing really well, there is one particular concern in the market, which is about the declining trend of content sales revenue. So I'd like to get your input on the overall direction when it comes to your content business. Can we say that a BTS documentary film to be released on Disney Plus and the debut Dream Academy related Netflix documentary will bring about the recovery in your content sales? And the third question is, is there any update on the Weverse Membership Plus launch schedule? Thank you.
Yeah, Lee Kyung Jun.
I'm CFO Lee Kyung Jun. Let me first comment on the album sales trend. We recognize album sales according to the same standards each quarter, and there was a similar level of album sales in Japan quarter over quarter. So if there is any major discrepancy between our results and the market expectation, we will have to go back and study. As for the second one, content sales, of course, as you mentioned, there was a high portion of content sales from BTS. But for other artists and other acts, we are currently working on various initiatives to increase the sales of content related to artist IP. So we expect that there will be a recovery of content sales going forward. As for Weverse membership, as was mentioned during the presentation, we now have thirteen acts from SM Entertainment on the Weverse platform, so it has become truly a K-pop fandom platform. Now we are executing a medium to long-term roadmap to grow this Weverse platform as a global fandom platform, and we're making various preparations. When it comes to the timing or specific timing of the launch of the Membership Plus, there is some change or some uncertainty regarding that, but I'd like to mention that we constantly develop and launch various services and features, which will later be packaged and offered as a membership product. So it means that we will continue to launch and offer new services and features, which will be tested and evaluated in the market. Therefore, even though there may be some delay in the launch of the membership, we are constantly preparing for better quality membership in the future.
The following question will be presented by Isona from KB Securities. Please go ahead.
네, 안녕하세요, KB증권 Isona입니다. 질문 기회 주셔서 감사합니다. 저도 세 가지 질문 드리겠는데요. 첫 번째는 CJ ENM이 이제 빌리프랩 지분 네 가지 공정위 승인 받았는데, 언제부터 저희 하이브에 연결 대상이 되는지 궁금하고, 향후 빌리프랩의 운영 전략이 궁금합니다. ENHYPEN이나 아이니처럼 오디션 프로그램을 통한 신인 데뷔를 지속할 것인지, 그리고 ENHYPEN 컴백 계획도 궁금하고요. 두 번째 질문은 이제 Weverse KPI 지표 관련돼서, 굉장히 좋은 그 MAU의 트렌드를 보여주셨는데, SM 아티스트의 입점 효과가 얼마나 되는지 좀 궁금하고요. Weverse 글로벌 팬덤 플랫폼 확장을 예고하셨는데, 이제 이타카 홀딩스 아티스트의 Weverse 입점은 언제쯤일지 궁금합니다. 그리고 마지막으로, 올해 또 다시 사상 최대 실적 경신이 예상되는데, 성과급 분기 안분해서 지금 반영하고 계신 건 알고 있지만, 자본기의 성과급 규모가 저희 예상치를 좀 넘어서 크게 늘어날 가능성이 있는지도 궁금합니다.
I'm Isona from KB Securities. Thank you for the opportunity. I have three questions. First of all, you got the approval from the Fair Trade Commission about the acquisition of a Belief stake. I'd like to know from when, specifically, Belief earnings will be consolidated and go towards Hybe's earnings. I would like to know more about your operational strategies for Belief, whether you're going to continue to prepare for a new group debut, and when will be the comeback timing of Enhypen. The second question has to do with Weverse. When it comes to the Weverse KPI, the MAU trend is really good, and I'd like to understand the effect of SM Entertainment acts joining the Weverse platform. You mentioned that Weverse is going to be a global fandom platform, so I'd like to know when Ithaca Holdings artists will join Weverse. The third question is about a potential bonus amount, because you're going to generate very large earnings by the end of this year. I would like to know whether the bonus amount is going to be higher than expected to be recognized in the fourth quarter.
Now, Kim Tae-Ho. First, I will answer the question related to Belief Lab. We got the approval from the government on October 31st, so the consolidation timing will be November 1st. And as we now have Belief Lab as a wholly owned subsidiary, we expect that there will be more efficiency in the decision making process. Belief Lab will start the year 2024 with two teams, Enhypen and Illit, which will debut soon, and we will continue to develop strategies going forward. As for Enhypen, they will make a comeback on November 17th, with Orange Blood, mini fifth album. In 2024, they're going to carry out various projects in Japan, Korea, and around the world to meet with fans. There will also be various strategies, including the linkage with OSB and tour projects for these teams.
I'm CEO Kim Tae-Ho. Let me comment on your question related to Belief Lab. We got the approval from the government on October 31st, so the consolidation timing will be November 1st, and as we now have Belief Lab as a wholly owned subsidiary, we expect that there will be more efficiency in the decision making process. Belief Lab will start the year 2024 with two teams, Enhypen and Illit, which will debut soon, and we will continue to develop strategies going forward. As for Enhypen, they will make a comeback on November 17th, with Orange Blood, mini fifth album. In 2024, they're going to carry out various projects in Japan, Korea, and around the world to meet with fans. There will also be various strategies, including the linkage with OSB and tour projects for these teams.
Yeah, Lee Yong-joon. So the second question you asked was about the Weverse KPI, and you asked how much the effect of the SM artist entry is. In fact, as the SM artist joins and uses our various services together, when looked at as a whole year, there is a significant positive impact on our profit. However, it is difficult to say that number here. In fact, the entry of the SM artist not only has that profitable aspect, but as I said earlier, by greatly expanding the user pool, I would like to emphasize that we have been able to operate a more stable platform business.
I'm CFO. Let me comment on your second question related to the KPIs of Weverse and the impact of SM Entertainment acts joining the platform. As we have now SM Entertainment artists on the platform, they are right now using various services and features offered by Weverse. So we believe that there will be a positive impact on our P&L for the year 2023, but please understand that we cannot share with you any specific numbers. And with SM Entertainment artists on Weverse, we not only have positive impact on our revenue and earnings, but also it has a benefit of expanding the user base so that we can continue to operate and run this platform in a stable manner.
Yeah, and you asked about the timing of Ithaca Holdings artists joining Weverse. I have said this many times, but it is quite cautious to say because it is being delayed. Right now, we have a medium- and long-term roadmap to go to a global fandom platform, and accordingly, we are in significant discussions with the artists, especially the artists in the US. One more thing I would like to say is that we are not only discussing with the artists of Ithaca Holdings, but we are also discussing with major US artists.
Moving on to the timing of Ithaca Holdings artists joining Weverse. We talked about this multiple times. What I can say right now is that we have a medium- and long-term roadmap to expand Weverse and grow it as a global fandom platform. Currently there are discussions underway with various artists, especially Ithaca Holdings. But we're not just limited to Ithaca Holdings artists, but discussions are well underway with other major artists from other day labels.
Yeah, and the last question you asked was about the bonus amount. We are recognizing the expected bonus on a quarterly basis based on the estimated amount for each quarter. However, it is difficult to predict exactly how much the market expects, so it is difficult to say exactly. However, we are currently recognizing the expected incentives on an accrual basis.
Lastly, with respect to our bonus and incentives, we have been recognizing them on a quarterly basis based on projected estimates. I do not exactly know what the market expectation is, but as of now, we have been recognizing these incentive payments on a quarterly basis, on an accrual basis.
Yeah. With this, we would like to conclude the third quarter earnings call of HYBE. Thank you so much!