Article: Analysts, "YG aims to go global with Big Bang and Blackpink...focus on overseas concerts"
Source: Chosun Ilbo
Analysts are predicting that YG's main goal is to go global.
2019 was a year full of trials for YG Entertainment due to former Big Bang member Seungri's
'Burning Sun Gate' controversy. However, analysts predict that the agency is expected to recover with Big Bang's comeback.
Big Bang will make their first return to the music scene as four after military service with the U.S Coachella Festival in April 2020 and securities firms are interpreting this as a "green light".
Blackpink are also currently enjoying a successful Japanese dome tour and are also a major driver of the share price. Blackpink proved their ticket power by mobilizing about 150,000 fans for three days at the Tokyo, Kyocera, and Fukuoka dome
The sale of YG Foods, a subsidiary of YG Entertainment that was operating at a deficit is also expected to boost the agency's operating profit of 10 billion KRW annually.
◇ Point 1│ "BigBang is Back"
Big Bang is a global top artist with high ticket power in Japan and Southeast Asia. Of course there are mixed opinions whether remaining Big Bang members will re-sign but according to industry experts, YG is in the final stages of finalizing contract details with the members like contract period and profit share. It's highly likely that revenue share will be unfavorable to YG however experts explain that as Big Bang is YG's representative group this will be a positive to the agency.
◇ Point 2│ "Blackpink successfully entered the global market"
Blackpink's high ticket power and successful entry into the global market will also be a strong revenue source for the agency. This is because female fans in their 10s and 20s have the highest loyalty and consumption tendency and are the group's main fanbase.
Blackpink also has a high YouTube index with 32.4 million channel subscribers as of January 7th which is more than BTS who only have 24.5 million.
Blackpink is set to make their comeback in March-April and then proceed with a true world tour that's guaranteed to bring in about 400-500 Million KRW similar to Big Bang's 2012 global tour. Because Blackpink is a relatively young group, their profit share is also favorable to the company.
◇ Point 3│ "Re-arrangement of deficit leaders and re-focus on main business"
After joint execs Yang Hyun Suk and Yang Min Suk resigned in June last year, Hwang Bo Kyung, who grabbed YG's baton is making changes to management. Loss leaders like YG Foods are being sold or re-arranged and focus is being brought back to the main business. The company also decided to stop producing content as it garnered 8 billion won deficit each year.
Thanks to the good news, YG shares have rebounded steadily over the past month and recovered to valuation of 30,000 KRW according to analysts. Thanks to Big Bang and Blackpink, K-Pop's reputation will be restored and YG Entertainment will reach 40 billion won market cap in 2021.
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