Good morning. Thank you for joining us for HYBE's third quarter earnings call. This is Lee Jae-sang, head of the IR team. I'll be moderating today's call, which will proceed through consecutive interpretation. Today, CEO Park Ji-won and CFO Lee Kyung-jun will first present the business highlights, future business plans and medium to long-term growth strategies, followed by the Q&A session. Please be advised that today's earnings call is based on preliminary consolidated estimates under KIFRS, and are thus subject to change during an external audit. Now I will hand over to our CEO. Good morning. This is CEO Park Ji-won. On October seventeenth, HYBE announced that steps are being taken for the BTS members to fulfill their military service. I understand that there are some concerns about potential impacts of their temporary absence on the company's business performance.
Today, we will not only report on the third quarter earnings results, but also share our medium to long-term visions and plans. First, CFO Lee Kyung-jun will report on the earnings highlights. Good morning. This is CFO Lee Kyung-jun. Let me walk you through the consolidated financial results for HYBE. In the third quarter, we recorded revenue of KRW 445.5 billion, which is a 31% growth year-over-year. Of the total revenue of KRW 445.5 billion, revenue with direct artist involvement, including album sales, concerts, advertisements, and appearances, was KRW 206.2 billion, accounting for 46% of the total. Revenues with indirect involvement, including merchandising, licensing, content, and fan club sales, made up the remaining 54%, recording KRW 239.3 billion.
Following the second quarter, several album releases and world tours of major HYBE artists in the third quarter contributed to the YoY growth of sales with direct artist involvement. Sales of tour-related merch, artist content, and game sales recorded an even bigger growth, resulting in the higher revenue contribution from the sales with indirect artist involvement. Let me give you more details by revenue category. In the third quarter, album sales recorded KRW 129.2 billion. They include a repackaged album by Seventeen, a third mini album by ENHYPEN, a debut album by NewJeans, and a solo album by J-Hope. Seventeen became the first artist to sell a million copies with a repackaged album, and ENHYPEN became a million seller in just three years.
NewJeans sold 580,000 copies as of the end of September, setting the most album sales record as a debut group. In addition to their successful debut album sales, NewJeans is rising as a new K-pop icon, with many offers from companies including fashion and beauty brands, which raises our expectation for their future growth. Concert revenues totaled KRW 47.2 billion, including the world tour sales of Seventeen and Tomorrow X Together. The world tours by Seventeen, TXT, and ENHYPEN are well underway, with most concerts being sold out. We expect that they will be able to perform at larger venues next year and onward, thereby contributing to both our top line and bottom line growth.
간접 판매형 매출 중 MD 및 라이선싱 부문의 3분기 매출은 1,147억 원을 기록하였으며, 꾸준히 사랑을 받고 있는 Artist-Made Collection by BTS 제품들과 Seventeen과 Tomorrow X Together의 투어 관련 제품들이 매출을 견인하였습니다. 콘텐츠의 3분기 매출은 1,072억 원을 기록했으며, 콘텐츠 매출은 꾸준히 상승하는 추세입니다. 이번 분기에는 방탄소년단의 BTS Memories of 2021 DVD와 Disney+를 통해 방영된 콘서트 영상과 인더숲: 우정여행이 콘텐츠 매출에 주요하게 기여했습니다. 또한 6월 말에 출시한 게임 인더섬 with BTS의 매출도 콘텐츠 부문에 반영되었습니다.
Of the indirect involvement revenues, merchandising and licensing revenues recorded KRW 114.7 billion, driven by the sales of all-time popular BTS merchandise as well as the tour-related merch items by Seventeen and TXT. Content revenues posted KRW 107.2 billion in the third quarter, showing a constant growth trend. BTS Memories of 2021 DVD and their concert video on Disney+, as well as the BTS In the Soop: Friendcation, were major contributors to the content revenues for the third quarter. Also, revenue from BTS Island: In the SEOM, a game launched in June, was recognized as content revenue.
2022년 3분기 영업이익은 606억 원을 기록하였으며, 이는 전년 동기 대비 8% 감소한 수치입니다. 매출액이 성장했음에도 불구하고 영업이익이 전년 동기 대비 다소 감소한 것은 매출 총이익률이 기존 대비 감소했기 때문이며, 여기에는 두 가지 이유가 있습니다. 첫 번째로 7월부터 방영된 &AUDITION - The Howling의 제작 원가가 반영되었습니다. &TEAM의 데뷔는 12월에 예정되어 있어 아직 매출이 인식되기 전에 선반영된 제작 비용으로, 이는 아티스트의 데뷔 후 성장함에 따라 수익성이 개선될 것으로 예상됩니다. 두 번째로는 아티스트들의 첫 오프라인 공연이 시작됨에 따른 원가율 상승입니다. Tomorrow X Together, ENHYPEN의 북미 투어는 데뷔 이후 처음으로 진행되는 투어였기 때문에 공연장의 크기를 보수적으로 계획했으며, 이에 따라 좌석 규모가 크지 않아 수익성이 제한적이었습니다. 하지만 올해 투어를 진행하며 회사는 팬들의 더 큰 수요를 확인했으며, 내년에 진행될 공연들은 올해보다 공연당 관객 수가 두 배 가까이 증가할 예정으로 수익성은 지금보다 개선될 것으로 전망됩니다.
In the third quarter, the operating profit posted KRW 60.5 billion, down 8% year-over-year. The YoY decline in the operating profit despite the top-line growth was mainly because of the decline in the gross margin. There are two major factors. First of all, the production costs of the audition program for &TEAM that premiered in July were recognized first before any revenue could be recognized because &TEAM will debut in December. As the group continues to grow in the future, the bottom line is expected to improve. The second factor is the higher costs of sales associated with the beginning of offline concerts by HYBE artists. The North American tours by TXT and ENHYPEN were their first tours since debut, so the concert venues were selected in a conservative manner. Since the seats were quite limited, their profitability was limited as well.
However, we were able to identify high demand from fans for these artists as the world tours proceeded. Concerts scheduled for next year will be held in places with twice more seats than the venues this year. As a result, we expect concert profitability to improve significantly.
계속해서 Weverse KPI를 말씀드리겠습니다. MAU는 3분기 평균 700만 명으로 직전 분기 대비 약 16% 증가했습니다. 이는 7월 새롭게 오픈한 Weverse 효과로 Weverse LIVE를 통해 아티스트와 팬들의 소통이 확대됨에 따라 유저들의 커뮤니티 이용도가 활성화된 결과입니다. 고무적인 부분은 3분기 중에서도 매월 지속적으로 MAU가 상승하는 추세를 확인할 수 있었다는 점입니다. 고도화된 라이브 서비스를 통해 8월 초 J-Hope과 Tomorrow X Together의 Lollapalooza 공연을 중계했으며, 10월 중에도 4,900만 건이 넘는 재생 수를 기록했던 방탄소년단의 부산 콘서트를 안정적으로 중계하면서 팬분들에게 좋은 평가를 받았습니다. 이후에도 대형 이벤트들의 라이브 스트리밍이 예정되어 있어 4분기 MAU는 더욱 큰 폭으로 증가할 수 있을 것으로 전망됩니다.
Moving on to Weverse KPIs. The average MAU in the third quarter is around 7 million, up 16% QoQ. With the opening of all new Weverse in July, communications between artists and fans through Weverse LIVE were expanded, which resulted in more active utilization of the Weverse community functions by the fans. It is also encouraging to see the continuous MAU growth trend in the third quarter as well. In early August, performances by J-Hope and Tomorrow X Together at Lollapalooza were streamed using an advanced live streaming function, and the Busan concert by BTS was streamed on the platform in October, which recorded more than 49 million views. As such, the platform received good evaluation from the fans.
Going forward, many big events are scheduled to be live streamed on Weverse, which is expected to lead to a big growth in the fourth quarter MAU as well.
뿐만 아니라 Weverse LIVE는 런칭 이후 약 백일간 810회의 아티스트 라이브 스트리밍이 있었으며, 이 콘텐츠들은 1억 3,000만 회의 누적 재생 수를 기록하였습니다. 신규 가입자와 방문자 수 또한 이전보다 증가하는 등 Weverse LIVE를 통해 Weverse 커뮤니티는 양적, 질적으로 이전보다 활성화된 지표들을 만들어내고 있습니다. Weverse LIVE로 팬분들이 Weverse를 방문하는 시간과 횟수가 늘어남에 따라 총 결제 금액과 지불 유저 한 명당 한 달에 결제하는 평균 금액인 ARPPU도 꾸준히 증가할 것으로 기대하고 있습니다.
Furthermore, for the first 100 days since the launch of Weverse LIVE, 810 sessions of live streaming by artists were held with 130 million accumulated views. As such, the Weverse community has seen both quantitative and qualitative growth through Weverse LIVE, including the growth in the number of new users and the number of visits. Thanks to Weverse LIVE, more fans visit and stay longer on the Weverse platform, so the total user payments, as well as ARPPU, which measures average monthly revenue per paying user, are expected to grow consistently.
저희는 4분기에도 다양한 아티스트들의 활동과 사업들을 준비하고 있으며, 이들을 통해 매출액과 영업이익의 성장세를 이어가도록 하겠습니다. 세븐틴은 11월 9일 일본 미니 앨범 Dream을 발매할 예정으로 연말까지 일본과 아시아에서 Be The Sun 투어를 진행할 예정입니다. 엔하이픈은 지난주인 10월 25일 첫 일본 정규 앨범 定め를 발표하여 첫날 18만 장의 판매량을 기록하였고, 또다시 Oricon 데일리 차트 1위를 기록하였습니다. 이후 일본과 아시아에서 월드 투어를 이어나갈 예정입니다. 10월 17일 미니 2집 Antifragile로 컴백한 르세라핌은 데뷔 후 두 번째 앨범만에 초동 57만 장을 달성하였고, 이 앨범을 통해 Billboard 200 차트에 14위로 진입하였습니다. 이는 역대 K-pop 걸그룹 중 가장 빠른 속도의 진입으로 르세라핌의 글로벌 시장에서의 성장세도 주목할 만한 점입니다. &AUDITION을 통해 모습을 선보인 &TEAM은 12월 데뷔 앨범을 발매하며 본격적인 활동을 시작할 것입니다.
A wide range of activities by HYBE artists are planned for the fourth quarter as well, which will support a growth trend in terms of both the annual revenue and the operating profit. Seventeen will release a mini album titled Dream on November ninth in Japan and continue the Be The Sun Tour in Japan and Asia until the end of the year. ENHYPEN's first regular album in Japan, titled Sadame, was released last week on October twenty-fifth, which recorded the first-day sales of 180,000 copies and topped the Oricon Daily Chart again. The group will continue their world tour in Japan and Asia. LE SSERAFIM came back with their second mini album titled Antifragile on October seventeenth and sold 570,000 copies in the first week, making the fourteenth place on the Billboard 200.
This is the fastest entry to the Billboard chart as a K-pop girl group, which demonstrates their popularity in the global market. &TEAM was formed through &AUDITION, which will make a debut in December and carry out various activities.
하이브의 신규 아티스트들이 모두 폭발적인 성장과 함께 데뷔 관련하여 발생한 비용의 회수 기간도 더욱더 짧아질 것으로 기대됩니다. 실제로 방탄소년단을 제외한 하이브 아티스트들은 지난 3년간 연평균 3배에 달하는 폭발적인 매출 성장을 기록해 왔습니다. 앞으로도 하이브의 발전을 지켜봐 주시면 감사하겠습니다. 지금부터는 박지원 CEO께서 저희의 중장기적인 성장 전략과 방향성을 말씀드리도록 하겠습니다.
As our new artists have been growing exponentially, we expect that the amount of time taken to recover debut-related costs will be reduced significantly. Indeed, excluding BTS, revenues of the other HYBE artists increased threefold on average for the past three years, showing an explosive growth. I would like to ask for your continued support. Now let me hand over to CEO Park Ji-won, who will present our medium to long-term growth directions and strategies.
네, 경준 님 감사합니다. 먼저 방탄소년단의 활동과 관련하여 향후의 계획을 말씀드리겠습니다. 지난주 싱글 앨범 The Astronaut을 발매한 방탄소년단의 멤버 진은 병무청의 가이드라인에 따라 입대 절차를 진행할 계획이며, 다른 멤버들도 병역 이행 계획에 맞춰 당분간 개별 활동에 집중하게 될 예정입니다. 하이브와 방탄소년단 멤버들은 2025년에 완전체 활동 재개가 가능하길 희망하고 있으며, 그전까지는 개별 활동을 이어나간다는 계획을 가지고 있습니다. 방탄소년단의 행보에 대해서도 앞으로도 많은 지속적인 관심과 응원 부탁드리겠습니다.
Thank you, Kyung-jun. Let me first comment on the future plans related to BTS. Last week, Jin released a single album titled The Astronaut, and he will proceed to serve in the military according to the guidelines of the Military Manpower Administration. In the meantime, the other members will focus on solo projects in consideration of their scheduled military service. HYBE and BTS hope to see their group career resume in 2025, until which the members will engage in solo activities. I would like to ask for your continued support and encouragement for BTS.
하이브는 멀티 레이블 전략을 통해서 성장을 지속시켜 나갈 계획입니다. 현재 하이브는 한국, 일본, 미국에 걸쳐 총 아홉 개의 독립적인 레이블을 운영하고 있으며, 이들로부터 아티스트를 지속적으로 배출하는 구조를 가지고 있습니다. 창작자들에게 최적의 환경을 제공하고 독립성을 보장함으로써 레이블 간의 협력과 경쟁을 통해 성장을 유도하는 환경을 조성하였습니다.
HYBE will continue to use the multi-label strategy for business growth. Today, HYBE has nine independent labels in Korea, Japan, and the U.S. that are producing great artists. We have created an environment where the creators can work under the most optimal conditions with autonomy and independence, and the competition and collaboration are encouraged to achieve growth. This system of HYBE will be applied to the global market as well. In Japan, &TEAM, which was put together through an audition program, will debut in the fourth quarter. HYBE America is working on a project to debut a girl group through an audition program with Universal Music Group next year. The two teams will be launched in Japan and the U.S. respectively to offer K-pop entertainment that caters to the music industry and the fandom of the respective countries.
It means that HYBE will take on the initiative of applying its production process of talent discovery, training, and debut, as well as its business model of utilizing artist IPs for 360-degree business expansion across diverse genres, countries, and cultures. This initiative will disrupt the paradigm of the global music industry. Likewise, we believe that the diversified artist portfolio helps us avoid the risk of concentrating on a certain country, on a certain genre, and allows us to flexibly respond to the changing external situations and trends, thereby reducing the overall business risks. Another strategy that HYBE is pursuing is to combine music and technology to offer new experiences for fans and expand the scope of entertainment business.
I would like to discuss how we will expand the scope of HYBE's entertainment business through the platform business centered on Weverse and the game business, and how we are going to pursue voice-based solution business with Supertone. First of all, Weverse is implementing the scale up and scale out strategy to advance the services and grow artist participation on the platform. Following the launch of live streaming technology, we're working now to offer new subscription services by adding various functions, and we will continue to develop and offer services to not only facilitate communication between artists and fans, but also support active communication among the fans. We also plan to strengthen the online and offline hybrid experiences centered on concerts and establish an ecosystem by introducing digital goods.
Furthermore, we will expand the influence of the platform by inviting artists in Japan and the US to join the platform. Our game business has produced some good results. BTS Island: In the SEOM, which was launched this year, has been welcomed by the fans, and its success has gained much attention in the game industry as well. It is worth mentioning that it represents a rare case where a game based on artist IPs achieved success, and that the successful result was achieved in just one year with less than 30 people working on the project.
We will not just stop here, but will continue to secure influential game IPs through both in-house development and publishing services. In particular, we will be a publisher of a major game title developed by a leading Korean game company scheduled to be released next year. We will soon update you on this plan.
We expect that the publishing business will not only generate profit for us, but also help us gain human resources and experience necessary to carry out technology-enabled entertainment business. Gaming includes a number of entertainment components, including music, and we believe that games will serve as a key pillar in the virtual world, such as the Metaverse in the future. Therefore, it is essential for us to enter the gaming industry preemptively to prepare for this type of future. We also believe that greater synergies will be created when game business capabilities are added to our fundamental core capabilities of music and content creation. In addition, we acquired additional equity stake of Supertone, which is expected to be an important part of the technology capabilities that we wish to secure.
We will provide new types of content and services by combining our content production capabilities and Supertone's AI-based audio and voice synthesis technology. We have also been thinking about B2B services using voice-based solutions. In this regard, at the open seminar held during the Busan International Film Festival, we presented various cases of AI-supported creation and innovative technologies, and our presentations received much support and interest, which proves their feasibility. Our final strategy for sustainable growth is expansion through cooperation across boundaries. It is a comprehensive strategy that involves M&As, joint ventures, equity investments, and partnerships. In order to expand the multi-label strategy, we're considering various partnerships and investments with labels, catalog companies, and talent management companies in the overseas markets such as the US and Japan, thereby strengthening our music IP portfolio.
Through this approach, we expect that greater synergies will be created with our superior solution capabilities on concert, merchandising, and content to deliver greater results. We're also considering to invest in or cooperate with companies that have differentiated technology related to the new businesses that we're promoting. HYBE will utilize the multi-label strategy to achieve diversity in our music business, conduct solution business for the enjoyment of our fans, and promote convergence with technology across platform, game, and AI. Through this approach, HYBE aims to be an innovative leader in the industry, expand the scope of our business, and achieve sustainable and explosive growth. As has always been the case, HYBE will never be complacent, but will continue to move forward and search for solutions.
As we venture into the uncharted territories, we may experience trials and errors, but we have amazing plans to overcome these obstacles, transform the industry, and take on new challenges. As we implement these plans one by one, we will make sure to share with investors our achievements and our future plans so that we can write the next chapters of HYBE together. Moreover, we are considering medium to long-term shareholder return policies, including share buyback and dividend payouts to enhance shareholder value. We will be able to share with you more details in early 2023. We will do our best to ensure that the remainder of this year, as well as next year, will be the time for us to begin a new chapter and prepare for another leap forward. Thank you for your attention.
Now Q&A session will begin. Please press number three, and that is star and three if you have any questions. Questions will be taken according to the order you have pressed the number star and three. For cancellation, please press star four, that is star and four on your phone. The first question will be provided by Lee Hyun-ji from Eugene Investment & Securities. Please go ahead with the question.
Hello, this is Lee Hyun-ji from Eugene Investment & Securities. I would like to ask a question regarding Seventeen's planned activities for the fourth quarter. I understand that Seventeen will start their dome tour in Japan, and also the city project will be carried out together. I'd like to know more about their scheduled album-related activities and concert-related activities and the expected results. As has already been reported in the media, Seventeen will begin its dome tour in Japan, starting with their concerts in Osaka on November nineteenth, which will be followed by their concerts in Tokyo and Nagoya. All these tour concerts will be carried out together with the city project. In each city there will be two concerts for this dome tour, so a total of six concerts will be offered.
In the history of K-pop, it is only BTS and TVXQ who were able to have six dome concerts in Japan in one tour. Seventeen is the third act who is able to do so. The city project was carried out in November in Las Vegas by BTS, and this is about utilizing an entire city to celebrate their concerts and various activities are carried out. For Seventeen's dome tour and the city project in Japan, they will include the Nankai Electric Railway wrapping in Osaka and decorating the Skytree, which is a landmark in Tokyo, with Seventeen color, as well as various engagement and partnerships with cafes and hotels. These six concerts will be planned for the fourth quarter, and we expect that there will be even larger venues scheduled for Seventeen next year.
We had a concert in the Southeast Asian region with about 10,000 seats, but there was so much popularity and demand for Seventeen tours. As such, we have added 2 more concerts at a stadium scale venue in December this year. We expect a lot from these concerts. You also asked about Seventeen's album-related news. As was reported, Seventeen will be releasing its album in Japan on November 9. When we take a look at the pre-order situation, we expect that the album sales will increase by more than 200%, so it's going to sell well in Japan.
Next question, please. The following question will be presented by JJ Park from JP Morgan. Please go ahead with your question.
향후 마진 아웃룩이 어떻게 되는지, 이 전략 방향이랑 이게 대부분 탑라인 그로스를 드라이브하는 건데, 그 마진에 대해서는 어떤 식으로 좀 그 프로텍션할지 좀 궁금하고요. 두 번째는 이타카 홀딩스 지금 머지한 지 한 일 년 반 정도 되는 것 같은데, 그게 1조라는 돈이 투자가 됐고, 지금 일 년 반 정도 지나서 어떤 시너지 효과가 있는지, 이거 그러니까 뭐 퀀티파이 할 수 있으면 그 관련된 내용을 좀 설명해 주시면 감사드리겠습니다.
I'm J.J. Park from JP Morgan. Thank you for taking my questions. I have two questions. The first one is related to your operating margin. I understand that you are taking on the multi-label strategy, which requires a large headcount, and there's inflation issue as well. What is your overall margin outlook going forward? When we take a look at your strategies, it seems that they are mainly aiming at boosting the top line growth. What about your bottom line? How are you going to guard your margin? The second question is related to your synergy with Ithaca Holdings. It's been more than a year since this deal was concluded and about KRW 1 trillion of the investment was made. If you can provide us with some numbers that can quantify the synergy effect with Ithaca Holdings, I would appreciate that.
먼저 마진 관련해서 답변드리겠습니다. 말씀주신 것처럼 저희가 멀티 레이블 전략 그리고 신사업에 들어가면서 마진의 압박을 받고 있는 건 사실인데요. 올해까지는 BTS의 활동들이 나왔기 때문에 10% 중반 이상의 영업이익률은 충분히 달성할 수 있을 것으로 생각하고 있고요. 다만 내년도에는 이제 BTS의 매출 비중이 줄고 다른 아티스트들의 매출들이 많아짐에 따라서 마진 압박은 좀 더 심할 수 있을 것으로 생각이 됩니다. 하지만 저희가 아티스트별 매출 총이익, 그로스 마진을 보면 BTS와 저희 Seventeen, TXT, ENHYPEN 정도까지만 되더라도 공연을 제외하고는 마진율에서 큰 차이가 없습니다. 그래서 이런 아티스트들이 성장을 하고 그다음에 저희 신인인 LE SSERAFIM과 NewJeans, &TEAM도 내년이 지나고 나면 일정 수준의 수익률은 달성할 수 있을 것으로 봐서 내년도는 조금 마진의 압박을 받겠지만 내후년부터는 저희가 그동안 보여왔던 수준의 마진을 볼 수 있지 않을까, 이렇게 생각을 하고요. 거기에 추가적으로 저희가 이제 테크를 이용, 테크와 음악의 접목을 통한 신사업들을 하고 있는데, 저희가 여기에서 나오는 매출이 어느 정도나 되느냐에 따라서 마진이 추가적으로 개선될 여지는 있습니다.
Let me comment on your question related to our margin outlook. As you mentioned, we are carrying out the multi-label strategy and there are various new business models that we're pursuing. As such, there is some pressure on our margin side. Of course, for this year, we expect our operating profit margin is going to be in the mid-10% because of the contribution from BTS activities. Starting from next year, the portion of revenue contribution from BTS will be reduced, while the contribution of margin and top line growth from other artists will continue to grow. As such, next year there may be even greater pressure on the margin side.
When we take a look at the gross margin by artists, in addition to BTS, Seventeen, Tomorrow X Together, and ENHYPEN, their margin is not very different from the margin of BTS other than the concert revenue. Therefore, as these groups continue to grow, I believe that margin will improve accordingly. In addition, our new teams, including LE SSERAFIM, NewJeans, and &TEAM, will continue to achieve growth starting from next year. Until next year, we may have some negative pressure on the margin side, but starting from 2024, we expect that our margin will improve. In addition, we continue to carry out new businesses by combining technology and music. Depending on the size of revenues coming from these new businesses, there will be additional upside on the margin side.
제가 두 번째 질문에 대해서 답변을 드리도록 하겠습니다. 이타카 홀딩스를 인수한 지 일 년 저, 그리고 이제 절반 정도가 지났는데요. 사실 이제 일반적인 M&A에서 일, 뭐, 일부 M&A에서 적용하는 워칭 피리어드가 저희도 있었고요. 이 워칭 피리어드가 끝나고 지금 본격적으로 이타카와 함께 북미 사업과 이제 남미로의 확장을 고려하고 있는 단계입니다. 사실 저희가 이제 구체적인 시너지는 지금 대단히 명확하게 나오고 있는데요. 첫 번째는 예를 들어서 이제 퍼블리싱이나 마스터의 요율 협상과 같은 것들을 저희가 북미 쪽 레이블의 요율과 합쳐서 지금 진행을 하고 있고요. 두 번째로는 이제 저희 아티스트들의 북미 활동이 계속 확장되고 있습니다. 예전에는 많은 시간을 들여서 쇼케이스를 준비하고 북미 확장을 위해서 여러 가지 인풋들이 필요했는데, 지금은 이타카와 함께 이제 좀 더 적은 인풋으로 좀 더 좋은 결과들을 가져오는 이 작업들을 동시에 하고 있고요. 세 번째는 이제 아까 Weverse 때 제가 말씀드렸던 것처럼 내년 상반기 정도에 이제 이타카의 아티스트들이 저희 Weverse에 입점함으로써 플랫폼의 입점 아티스트의 확대에도 도움이 될 것이라고 생각을 합니다.
그리고 마지막으로는 이 미국 쪽에서 도입하고 있는 새로운 비즈니스 모델들을 좀 아시아나 아니면 다른 지역으로 확대하는 것들을 계속 같이 고민하고 있습니다. 예를 들어서 저스틴 비버의 Drew House나 아리아나의 R.E.M. Beauty 같은 성공적인 사업 케이스들을 저희가 벤치마크를 해서 이런 것들을 어떻게 적용시키고 확대할 수 있을지 지속적으로 고민하고 있고, 이러한 것들을 준비하는 과정에서 이타카의 시너지가 조금 더 확대될 수 있을 거라고 생각을 하고 있습니다.
Let me comment on your second question related to the outcome or results from our acquisition of the Ithaca Holdings. As you mentioned, it's been more than a year since we acquired Ithaca Holdings, and we have gone through the watch period, which is typical for any M&A transaction. The watching period is over, and we are now actively pursuing various opportunities in North America, as well as potential expansion into the Latin American market. There have been very specific synergistic results from this deal. First of all, we were able to have better or upper hand in terms of publishing and mastering rates negotiations in the North American market. In addition, we were able to expand our artists activities in North America more easily.
In the past, we had to put more effort and more time in preparing for any showcases or activities in the North American market. Now, thanks to the support from Ithaca Holdings, we're able to spend less effort and maximize outcome from our artist activities in that region. Thirdly, as I mentioned during my presentation, there will be Ithaca Holdings artists joining the Weverse platform in the first half of next year, which is expected to expand the outcome of the platform. Then finally, we are also talking about and discussing how to expand successful business models such as Drew House of Justin Bieber and R.E.M. Beauty by Ariana Grande to Asia and other markets. All these will produce good results and good synergetic effects between the two. Next question, please.
The following question will be presented by Lee Suji from Merrill Lynch Securities. Please go ahead with the question.
I am Lee Suji from Merrill Lynch Securities. Thank you for taking my questions. As the CEO mentioned during the presentation, it is not only BTS, but also various other business initiatives that have been pursued by HYBE. We look forward to a lot of changes and positive results coming from these activities in the medium to long-term. However, in order for the investors to understand how these medium and long-term strategies will bring about earnings results, we need to have some numbers. If possible, I would really appreciate it if you could give us a breakdown by artists in terms of their revenue contribution. For instance, you can break the revenue down between domestic and Ithaca artists. Within Korea, in addition to the BTS, what are the revenue contributions from Seventeen, Tomorrow X Together and ENHYPEN?
You could give us some revenue breakdown as of the third quarter or the most recent available numbers. As well as the revenue contributions from the new groups such as NewJeans and LE SSERAFIM, so that we can understand what kinds of revenue projections we can anticipate when there's no more group career or group projects from BTS for some time. The second question is related to your multi-label management strategy. I wonder how much of a communication is taking place between Bang Si-hyuk, the founding member, and the other labels. I wonder if the other labels are all operating in an independent manner, and how much of an involvement of Chairman Bang is taking place. I would appreciate that. Thank you.
다음에 아티스트별 세부 매출은 저희가 공개한 적은 없는데, 저희 주주서한에서도 나온 것처럼 저희 BTS 올해 매출 비중이 60%에서 65% 사이 정도가 될 것으로 저희는 보고 있습니다. 그러니까 나머지 아티스트들의 경우에는 이타카 홀딩스 매출을 포함해서 35%에서 45% 정도 비중을 차지하고 있다 이렇게 보시면 될 것 같고요. 내년도 다른 아티스트들의 성장은 저희들은 이렇게 보고 있습니다. 과거의 성장 속도도 있지만, NewJeans나 르세라핌 같은 경우에는 올해보다 100% 이상 성장은 당연히 저희들이 목표로 하고 있고요. 나머지 아티스트들의 성장도 아주 높은 수준의 성장, 예를 들어서 30%에서 50% 이상의 성장은 기대하고 있습니다.
With respect to the revenue breakdown by artist, I hope you will understand that we cannot share with you any more details than have all been disclosed. Based on the already available information, I'd like to give you some color as to how much of a revenue contribution is coming from different artists. First of all, as you can see in the audit report, the Ithaca revenue for the half of the year is KRW 100 billion. The full year revenue from Ithaca Holdings is expected to be more than twice of that figure.
As for the breakdown by artists, I cannot give you all the details, but when you look at the letter to the shareholders, you can see that the BTS revenue contribution this year is going to be between 60%-65%, which means that the revenue contributions from Ithaca Holdings artists, as well as the other HYBE artists will be about 35%-40%. Going forward, in the future, we expect that new groups, including NewJeans and LE SSERAFIM, record more than 100% growth in terms of revenue contribution, and the other artists are expected to achieve a very high level of growth between 30%-50%.
네, 두 번째 질문에 대해서 좀 답을 드리자면, 방시혁 의장은 모든 레이블의 제작 과정에 관여를 하고 있지는 않습니다. 저와 함께 그룹의 중장기 비전과 성장 전략을 준비하고 있고, 예전에 계속 담당을 해왔던 빅히트 뮤직과 빌리프랩의 프로덕션, 그리고 일본과 미국에서 데뷔할 팀들의 프로덕션에는 관여를 하고 계시지만, 플레디스나 어도어와 같은 레이블에는 제작 과정이나 콘텐츠 릴리즈 과정에 관여를 하고 계시지 않습니다. 저희는 아까 말씀드렸던 것처럼 레이블의 독립성을 유지함으로써 좀 더 음악적으로 다양한 색깔들을 낼 수 있는 포트폴리오 시스템을 구축하려고 노력을 하고 있습니다.
I'd like to answer your second question related to Chairman Bang's involvement in the labels' activities. I'd like to say that he's not very much involved in the labels' activities. He's mainly discussing with me and working with me to develop medium- to long-term visions and growth strategies. Of course, he's very much involved in the Big Hit Entertainment and BELIFT LAB related production activities, as well as the production projects in the U.S. and Japan. As for the production and content creation by Pledis and ADOR, he's not very much involved. This, again, means that we continue to guarantee autonomy and independence of the labels under our umbrella, so that they can continue to diversify their music portfolio.
다음 질문 주시기 바랍니다. 그리고 원활한 순차통역 진행을 위해서 질문을 좀 나눠서 해주시면 대단히 감사하겠습니다.
Next question, please.
다음으로 질문해 주실 분은 CLSA의 Christopher Kim 님입니다. The following question will be presented by Christopher Kim from CLSA. Please go ahead with the question.
질문 기회 주셔서 감사합니다. 첫 번째 질문은 좀 단순한 질문일 수 있는데, 저희가 엔하이픈이 정확히 재무적으로 어떻게 top line부터 bottom line까지 반영이 되는지 그냥 간단하게 좀 설명 한 번만 부탁드리겠고요. 그리고 두 번째는 솔로 매출, 이제 많이, 진 씨 앨범 판매량도 보면은 이제 솔로 앨범들도 상당한 기여를 해줄 수 있을 것 같지만, 이게 상반기까지 발생하는 일회성 매출로 조금 볼 수밖에 없는 부분이 있는데, 저희 정국 씨가 나이가 아직 굉장히 어리고 군 입대를 어쨌든 이십팔 년까지는 연기를 할 수 있는 걸로 제가 파악을 하고 있는데, 이분이 혹시 군대를 안 가고 계속해서 솔로 활동을 좀 이어갈 확률이 어느 정도 되는지, 이런 부분들이 논의가 되고 있는지 말씀해 주시면 감사드릴 것 같아요.
마지막은 Weverse가 이제 V LIVE 랑 통합하고 나서도 MAU가 피크 대비는 한 2~3% 정도밖에 성장이 안 나오는데, 이게 4분기에 V LIVE 이제 완벽하게 shutdown 하면은 어느 정도까지 MAU가 올라올 수 있을지, 좀 단기적인 예상치를 좀 경영진분께서 공유해 주시면 좋을 것 같습니다. 감사합니다.
I'm Christopher Kim from CLSA. Thank you for taking my question. First of all, I would like to know ENHYPEN's financial contribution, both in terms of the top line and the bottom line. The second is that Jin's solo album is selling very well. I believe that this will contribute to your earnings, but it's going to be recognized, I believe, as one of revenue contribution in the first half of the year. When it comes to Jungkook, he is pretty young, so as far as I know, he can postpone his military obligation by until 2028. I wonder if he will continue to engage in solo projects until then. Moving on to my question related to Weverse.
There has been a combination between Weverse and V LIVE . However, the MAU growth has not been that impressive. It is only 2%-3% growth compared to the peak. When the V LIVE function is completely shut down in the fourth quarter, what is your projection, the short-term projection for the growth of MAU?
먼저 ENHYPEN 재무 반영에 대해서 설명드리겠습니다. ENHYPEN은 아시는 바와 같이 저희가 49%를 보유하고 있기 때문에 연결대상은 아닙니다. ENHYPEN, 그러니까 BELIFT LAB 자체의 이익은 저희에게 지분법 평가이익으로만 반영이 되고 있습니다. 하지만 저희가 예전부터 말씀드렸던 쓰리 필러 전략에 의해서 솔루션 사업, 그다음에 플랫폼 사업은 저희가 진행을 하고 있어서 저희가 진행하는 공연 또는 MD를 제작하거나 하는 것들에 대한 매출액은 저희 솔루션 사업부에서 인식을 하고 있습니다. 저희가 연결은 하지 못하지만 다른 솔루션 사업과 플랫폼 사업을 통해서 주변 매출들은 저희가 인식하고 있다, 이렇게 이해하시면 될 것 같습니다.
Let me first answer your question related to the financial contribution of ENHYPEN. As you know, we have the equity stake of 49%, so it is not subject to consolidation. The profits from BELIFT LAB will only be recognized in terms of equity method valuation gains. However, we have the three-pillar strategies in which the solution and the platform related activities for ENHYPEN are carried out by us. Therefore, concert sales and merch sales and other revenues are recognized as part of the revenue for the solution business division. Therefore, the entity-wise consolidation does not take place, but there are a lot of contributions coming from the platform activities and the solution activities related to ENHYPEN.
두 번째 질문에 대해서 답변을 드리도록 하겠습니다. 두 번째 질문이 정국 씨의 입대 계획에 대해서 주신 질문 같은데요. 이 문제에 대해서는 저희가 아티스트분들과 논의하여 확정하고 있는 병역 이행 계획에 맞춰서 순차적으로 입대를 할 것이다. 그리고 2025년에 완전체로서 복귀하기를 아티스트와 회사 모두 희망하고 있다 정도의 원칙적인 답변을 드릴 수밖에 없는 점 좀 양해 부탁드리겠습니다.
I understand that your second question is, Jungkook's plan for his military service obligation, and this is a matter that we are executing, after close consultations with the artists, in question. These will be taking place in a consecutive manner. We just hope that we'll be able to see BTS as a whole team in 2025. I hope that you will understand that this is my rather, high level answer. Thank you.
네, 이제 세 번째 질문은 Weverse MAU의 성장 목표에 대한 질문이었던 걸로 기억을 하는데요. 저희가 MAU를 구체적으로 몇 만까지 찍겠다라는 저희의 내부적인 목표는 현재로서는 존재하지 않습니다. V LIVE가 통합이 되었고, 저희가 10월 부산 콘서트의 스트리밍과 각종 기능들의 확장을 통해서 Weverse MAU가 지속적으로 증가를 하고 있고, V LIVE의 Sunset과 함께 트래픽이 넘어오면서 지속적으로 계속 성장을 할 것으로 예측을 하고 있는데요. 대략적으로 저희가 내부적으로 컨버전이나 아니면 ARPU의 수치는 관리하고 있지만, 대략 어느 정도까지 MAU가 성장할 것이다라는 예측치를 현 시점에서는 좀 구체적으로 세팅하기 어려워서 저희가 올해 10월, 11월, 12월이 끝나고 내년쯤부터는 내부적으로 수치들을 조금 더 세분화해서 관리할 예정입니다.
Your third question was our MAU target for Weverse. We do not have any specific internal MAU target. We have integrated the V LIVE functions, and we were able to stream the BTS concert in Busan in October. We have added a lot of new functions and features, and all of these are expected to contribute to the MAU growth. With the sunset of V LIVE at the end of this year, we expect that there will be increase in the traffic. Of course, we have been managing the convergence and ARPU and other KPIs, but we don't have any specific MAU target this year. We will have to see what will happen in October till December. Starting from next year, I believe that we will have an internal MAU growth target. Thank you.
다음 질문 주시기 바랍니다.
Next question please.
다음으로 질문해 주실 분은 유안타 증권의 이혜인 님입니다. The following question will be presented by Lee Hye-in from Yuanta Securities. Please go ahead with the question.
영업 단에서 이번에 순이익이 굉장히 잘 나왔는데 영업 단 이슈가 어떤 부분이 있었는지 좀 말씀 부탁드리고요. 두 번째로는 저희가 전반적으로 YouTube 지표들이 좀 빠지고 있는데, 대신 저희 같은 경우에는 TikTok이라든가 다른 SNS 플랫폼에서 충분히 메이크업이 되고 있을 거라고 좀 예상이 됩니다. 그래서 관련해서 좀 매출은 어떻게 나오고 있는지 좀 공유 부탁드리고요. 세 번째로는 Bubble이라든가 관련 구독형 서비스가 조만간 출시할 예정인데, 내년에 언제쯤 시기가 예상되는지 말씀 부탁드리겠습니다.
I am Hye-in from Yuanta Securities. Thank you for taking my questions. My first question is that you have seen a quite sizable non-operating income. Can you explain more about this non-operating income related components? The second is that I can see that there has been some decline in your YouTube related indicators, but I'm sure that TikTok and other social media networks have been able to make up for this decline. What is the situation or revenue coming from these activities? The third question is that you mentioned that you will soon introduce subscription services. I'd like to know the timeline of these.
먼저 영업외 이익이 크게 발생한 부분은 저희가 사실 외화를 상당 부분 보유하고 있습니다. 저희가 연초부터 원화에서 외화 비중을 늘려왔기 때문에 그 외화에서 나오는 외화 환산 차익이 크게 발생하였고요. 그다음에 YouTube 등 관련 지표들에 대해서는 저희들이 관련 지표는 하락이 있...
매출 사이즈에서는 지속적인 견조한 상황을 보이고 있다 이렇게 말씀드리고 싶습니다. 그리고 구독형 서비스는 저희가 내년 1분기 또는 2분기 초를 목표로 지금 서비스를 구성하고 있습니다. 그래서 저희들이 어느 정도 서비스를 선보일, 내년에는 선보일 수 있지 않을까 이렇게 생각하고 있습니다.
As for the first question related to the non-operating profit, we have sizable money in the foreign currencies starting from the early this year. We started to shift away from the Korean won to increase our foreign currency holding. As such, the foreign exchange valuation gains were incurred. As for the second question, YouTube related indicators will have to internally check the situation, but overall the revenue side there has been a solid growth. Third, the subscription services we are expecting to launch them in the first quarter or early second quarter. You'll be able to see what kinds of subscription services we'll offer next year.
네, 다음 질문 부탁드리겠습니다.
Next question.
다음으로 질문해 주실 분은 하나증권의 이기훈님입니다. The following question will be presented by Lee Ki-hoon from Hana Securities. Please go ahead with the question.
네, 질문 감사합니다. 세 가지인데, 첫 번째는 Weverse 관련해서 제가 기술적인 거를 잘 몰라서 그런데, V LIVE 가 연말에 종료가 되면 사용자들이 자연스럽게 Weverse로 아이디나 개인 정보들, 사용 기록들이 이전되는 건지, 아니면 이게 아니라면 저희가 삼천만 MAU를 이렇게 대부분 흡수할 수 있는 좋은 계획이나 프로모션 등이 있는지가 궁금하고. 약간 기타 질문으로 최근에 V LIVE 에서 계속해서 Stray Kids나 Twice 같은 JYP 그룹들이 계속 함께 하고 있더라고요. 제가 잘못 알고 있는 건지 모르겠는데 JYP나 SM은 같이 하지 않을 수도 있다고 알고 있는데, JYP는 V LIVE 를 계속 같이 하고, 혹은 좀 장기적으로 Weverse에 좀 더 가능한지가 첫 번째 질문이고요.
두 번째는 미국 걸그룹 관련해서 어쨌든 내년에 나온다는 건 알지만 투자자들이 이를 오디션 같은 거를 확인하는 게 굉장히 중요하다고 생각하는데, 어떤 오디션 프로그램의 방영 방식, YouTube 등의 방영 방식이나 혹은 이를 처음으로 확인할 수 있는 시기가 어느 정도인지가 두 번째로 궁금합니다. 세 번째가 오늘 나온 뉴스 중에 두나무 평가 손실에 대한 부분이 있었는데 이거는 영업 외적인 이슈고 현금에 대한 이슈는 아닌지는 알고 있지만 연말에 이를 미리 보수적으로 반영해야 되는지 추정치, 세 번째로 질문드리겠습니다. 감사합니다.
I'm Lee Kyung-jun from Hana Securities. Thank you for taking my questions. First of all, it is maybe because I don't know much about the Weverse technology itself, but with the sunset of V LIVE , the V LIVE subscribers or users, are they going to be automatically transferred to the Weverse platform, or are you going to carry out some promotional events so that you can absorb as many V LIVE subscribers as possible? Currently on the V LIVE platform, some JYP artists, including Stray Kids and Twice, have been operating and using this platform. You previously mentioned that you may not work with JYP artists or SM Entertainment artists, but do you think that these artists will be able to join the Weverse platform?
The second question is about this girl group that you will launch in the U.S., and I believe it is crucial for investors to be able to take a peek at what kind of girl group will be formed through this audition. I wonder if you can provide us with some more details as to the method of broadcasting this audition. Will this be on the YouTube platform or in other method?
And when will be the first time that we will take a look at what is going to happen for this girl group? And the third question is about the valuation losses that were reported in the media. Of course, this is a non-operating side, does not have much cash implication, but you need to be able to have some conservative estimate to be able to see the full picture for this year. Can you provide us with some more detail? Thank you.
먼저 두나무 평가 손실과 관련해서 말씀드리겠습니다. 두나무 평가 손실 관련해서 뉴스 나온 건 저희도 봤는데요. 실제 저희는 DCF에 따른 평가에 따라서 평가를 하기 때문에, 뉴스에 나온 것 같은 금액으로 이미 확정되어 있는 손실은 아니고요. DCF 결과에 따라서 감사인의 감사를 받고 평가 손실이 일부 인식될 수는 있지만, 지금 뉴스에 나온 것 같이 큰 금액은 아닐 것 같다라는 생각이고. 두나무는 지금 재무재표가 반기까지 공시되어 있는 걸로 알고 있는데, 사실 영업이익이 아직 견조한 상황입니다. 그래서 저희들이 인수할 때 생각했던 거와 크게 다른 재무 상황은 아니고, 저희들은 두나무의 견조한 영업실적 그리고 향후의 발전 가능성들을 아직도 믿고 있기 때문에, 그런 점들을 고려할 필요가 있다고 생각합니다.
Let me first comment on your question related to the valuation losses from Dunamu Holding. Of course, we saw the news articles, but we are using the discounted cash flow method, therefore. Then after that there will be an external audit and the final recognition will be determined. The loss recognition is not going to be as big as what was reported in the media. As for Dunamu, their financial statements have been made available for the first half of the year, and we see that their operating profit is at a solid level and we see their potential and their operating side performance. We continue to trust in Dunamu.
네, 그리고 먼저 세 번째 질문부터 답변을 드리자면, 미국 걸그룹의 오디션을 어떻게 방영할 것인가에 대해서는 현재 방영 방식은 대부분 확정이 되어 있습니다만, 조금만 더 기다려 주시면 저희가 이제 걸그룹 오디션의 방영 방식에 대해서 팬 여러분들과 투자자 여러분들께 공유가 가능할 것으로 생각을 하고 있습니다.
About your question of the US girl group audition program. As for the specific method of broadcasting this audition, we have finalized pretty much all the details, but I hope that you will wait a little bit so that we can communicate with you more details in the future. We will make sure that the fans and the investors will be able to understand what will happen.
V LIVE의 마이그레이션 방식에 대해서는 실제로 11월 1일부터 마이그레이션이 진행이 되고 있습니다. 이관 절차가 진행이 시작이 되었고요. 2022년 11월 1일부터 2022년 12월 28일까지 약 두 달여간의 기간 동안 이관이 진행되고 있습니다. 회원 정보를 이관하는 것에 대해서 명시적으로 동의를 할 경우에 한해서 Weverse로 이관을 진행할 예정입니다. SM이나 JYP 같은 다른 엔터테인먼트 회사들의 콘텐츠 역시 이관이 될 것인가에 대해서는 지금 V LIVE 쪽에서 계속적으로 이야기를 하고 있는 것으로 알고 있고, 서비스 마이그레이션 이전에 어느 정도 정리가 되면 다시 한번 공유를 드릴 수 있을 것 같습니다.
The migration from V LIVE has already started on November first, and the migration process is well underway. Starting from November first until the 28th of December, for two months, migration activities will be carried out. As for the transfer of membership information and the user information, it will be transferred to V LIVE only when there's an explicit consent and agreement from the users. Moving on to the issue of migrating content related to artists from other labels. I understand that V LIVE is currently talking with the other labels and other companies, and as soon as the details are determined, we'll be able to share with you.
네, 이것으로 질의응답을 마치도록 하겠습니다. 지금까지 HYBE의 3분기 실적 발표에 참여해 주셔서 감사합니다.
This is the end of the HYBE earnings conference call for the third quarter of 2022. Thank you for your participation.