SM Entertainment reported a significant decline in third-quarter earnings on Tuesday, citing reduced album sales and rising production costs as primary causes, while also hinting at the launch of a new girl group in January 2025. According to a regulatory filing, the company’s consolidated revenue reached 242.2 billion won ($175.6 million), marking a 9 percent decline in revenue and a sharp 73.6 percent drop in operating profit year-over-year, with profits at 13.3 billion won.
The downturn was attributed to several factors, including lower album sales, diminished revenue from key subsidiaries, and additional production expenses, such as for the BBC documentary series “Dear Alice,” which features SM’s first British boy group. SM’s separate entity reported revenue of 172.1 billion won and an operating profit of 27.1 billion won, marking declines of 8.8 percent and 43.6 percent, respectively. Although album and digital sales fell due to a high comparison base from last year, the company experienced growth in concert revenue, boosted by an expanded lineup and linked merchandise sales. Despite this, net income dropped by 56.8 percent to 16 billion won.
Despite the weaker quarterly performance, SM Entertainment expressed optimism about its future, stating it has a strong lineup of artist promotions scheduled for the fourth quarter and into 2025. This includes the debut of a new girl group—its first since aespa debuted five years ago. This upcoming debut is part of SM’s “SM 3.0” strategy, which aims to expand intellectual property through new groups like Riize and NCT Wish, as well as projects involving virtual artist Naevis.
Among its current artists, aespa recently released its fifth EP “Whiplash” in a series of successful releases throughout the year, following hits like “Supernova.” SM Entertainment has announced an extensive schedule of upcoming releases, featuring albums from Red Velvet’s Irene, WayV, and NCT U’s Yuta.
CEO Jang Cheol-hyuk highlighted the company’s dedication to building a strong artist roster encompassing both longstanding and emerging talents. “SM is building a strong lineup of artist IP spanning all generations of K-pop, not only with our long-beloved teams but also with new artist debuts,” he said, adding, “We plan to further strengthen our roster with a new girl group debuting next year.”
Looking ahead to its 30th anniversary, SM Entertainment has planned a variety of celebratory projects, including an SMTown Live concert, an SMTown album, and collaborative performances featuring popular artists like EXO’s Kai and Red Velvet’s Seulgi. These events are expected to enhance SM’s connection with fans globally and underscore its legacy as a leading force in the K-pop industry.
Sayart / ReaA JUNG, queen7203@gmail.com
