YG Entertainment continues to grapple with financial losses, reporting a deficit in the third quarter, adding to a yearly trend of declining profits. On November 12, YG disclosed its third-quarter financials, showing 83.5 billion won in revenue, a significant 42% decrease compared to the same period last year. The company recorded an operating loss of 3.6 billion won. However, the deficit was less than the projected 7.9 billion won loss, partially due to deferred expenses related to the production of the new group Baby Monster’s content, now set to impact the fourth quarter.

While 2023 is expected to close with negative growth for YG, financial analysts maintain an optimistic outlook for 2024. The anticipation stems from the company’s plans to leverage its strong intellectual property (IP) lineup in the coming year, which may reverse the current trend.

The impressive rise of Baby Monster is expected to play a significant role in revenue growth next year. The group’s debut album, DRIP, achieved initial sales of 670,000 copies, and with international exports, the total sales are projected to approach 900,000. Kihoon Lee, an analyst at Hana Financial Investment, remarked, “Following the rapid growth seen with groups like RIIZE and BoyNextDoor, Baby Monster could surpass one million album sales per release, signaling an impressive growth trajectory.”

In addition to Baby Monster’s projected growth, YG’s established artists are also set to make their return. WINNER is expected to resume activities following military service, while TREASURE plans to release new music and embark on a tour. Meanwhile, 2NE1's Asian tour is expanding with additional cities, showcasing YG’s efforts to enhance its artist activities.

However, YG’s strongest asset remains BLACKPINK, whose highly anticipated comeback and world tour are scheduled for the second half of 2024. BLACKPINK, who renewed their exclusive group contract with YG in December last year, are expected to release a new album as a full group. Their previous world tour contributed an estimated 100 billion won in combined operating profit over four quarters, and with Baby Monster’s additional impact, similar profit levels are anticipated.

Beyond scheduled activities, YG is benefiting from the growing success of solo ventures by affiliated artists, which has drawn positive attention to the company’s IP management and creative direction. Former YG artists like G-Dragon and BLACKPINK’s members Rosé and Jennie have been enjoying notable success in their solo careers, strengthening YG’s reputation as a provider of quality talent, even as some projects proceed outside the company.

Despite the current financial challenges, YG’s line-up of upcoming releases and tours provides hope for a robust recovery. As the company moves toward 2024 with a slate of highly anticipated artist activities, the industry is watching to see if YG can return to profitability and re-establish its status as a powerhouse in K-pop.

Sayart / Sharon Jung, guhuijeong784@gmail.com