Cube's ambition to become a 'Kpop giant'

Music

Wednesday, May 3, 2023 08:00 (GMT+7)
08:00 5/3/2023

According to Hankyung, many securities companies believe that Cube, the management label of (G)I-DLE, is secretly fighting with the Big 4 to win the position of "entertainment giant" in Kpop.

In fact, HYBE, JYP Entertainment, SM and YG Entertainment are considered the Big 4 of the Korean entertainment industry. However, recently, many small and medium-sized labels have been quietly fighting against the Big 4 to gain the position of one of the "entertainment giants" in Kpop.

Among them, Cube Entertainment - the management company of (G)I-DLE, is showing strong development potential in many aspects.

Stock price increase

According to Hankyung , Cube Entertainment's stock price closed at $18.07 on April 7. Compared to the closing price of $11.72 on January 2, the company's stock price has increased by 54.14% in the first months of the year. Explaining this increase, IBK Investment & Securities pointed out in a report: "Cube's business performance is improving significantly thanks to the expansion of the global fandom of its artists, especially (G)I-DLE."

“In addition to direct sales such as albums, records, performances and advertisements, the consumption of secondary products related to intellectual property (IP), such as (YouTube) content, has contributed greatly to the company's overall profits,” said Lee Hwan Wook Lee, an analyst at IBK Investment & Securities.

In addition, Hankyung also reported that Cube Entertainment is preparing to issue NFTs in collaboration with PALA - the largest NFT exchange in Korea (NFT stands for Non-Fungible Token, meaning Tokens are unique and cannot be replaced. Each NFT acts as a proof of ownership in digital-related fields).

In February 2020, VT GMP acquired 30.61% of Cube Entertainment's shares and became the largest shareholder of this brand. Through the transaction, VT GMP plans to seriously increase new business activities, focusing on developing the media trade business sector.

Previously, VT GMP acquired 51% of Cablery – a company that creates and develops services that combine artificial intelligence and virtual reality. In addition, a platform is also optimized for Generation Z as part of its media commerce business.

Therefore, after completing the acquisition of Cube and Cablery, VT GMP shares began to witness a strong increase (about 23.85%) this year. At the same time, HYBE recorded an increase of 28.02%, JYP Entertainment 14.88%, SM Entertainment 29.79% and YG Entertainment 27.99%. This result made Cube Entertainment recognized as the top profitable brand among Korean entertainment companies.

The influence of artists

Without a solid foundation, Cube Entertainment has gradually affirmed its position in the Kpop market thanks to the success of a series of artists such as BEAST, 4-Minute, Btob, Pentagon, (G)I-DLE... Despite facing many obstacles and shortcomings in management, Cube has quickly restored its inherent development.

According to its business report last year, Cube Entertainment recorded $90 million in consolidated revenue (up 67.7% year-on-year) and $5.1 million in operating profit (up 485.6% year-on-year).

(G)I-DLE's strong growth has contributed significantly to improving the performance of the entire company. Photo: Naver .

In particular, the strong growth of (G)I-DLE is the factor that helps Cube witness an increasingly high growth in revenue. Specifically, (G)I-DLE's album sales recorded a steady increase in quantity with 150,000 copies for the 3rd mini-album in 2020, 202,000 copies for the 4th mini-album in 2021, 254,000 copies for the first full album in 2022 and 839,000 copies for the 5th mini-album in October of the same year. This year, (G)I-DLE's new album is expected to reach a million copies (more than one million copies sold).

According to experts, if the Hallyu ban in China is lifted, Cube can earn significant profits thanks to (G)I-DLE's popularity in this country, especially when the number of advertising contracts for member Yuqi is constantly increasing.

As of April 7, the number of Weibo subscribers of Yuqi - a Chinese member - has reached 7.63 million. This number helps the female idol enter the top 5 most followed Kpop idols in China, just behind Lisa BlackPink (8.93 million) in the female chart.

In addition, Thai member Minnie is also showing her influence in the fashion industry. Starting to gain attention since her comeback with TOMBOY, the female idol has attracted a large number of fans. In February 2023, she was the guest of honor at the launch event of Tiffany & Co.'s new luxury jewelry collection in her home country of Thailand. A week later, she continued to be the center of attention at Paris Fashion Week Fall Winter 2023 when she appeared as a guest of the Miu Miu fashion house.

Lee Nam Soo, a researcher at Kiwoom Securities, said, “(G)I-DLE is reborn as a global star. Therefore, the economic impact of (G)I-DLE's world tour will increase significantly compared to last year.” With the increase in popularity, not only the group but also each individual member has received much attention from the audience.

Kiwoom Securities added that Cube Entertainment plans to introduce a new boy and girl group this year. With the debut of the two rookie groups, this year's revenue is expected to reach $119.8 million (up 36.8% year-on-year) and operating profit to reach $12.1 million (up 122% year-on-year).

By industry, the entertainment sector is expected to bring in $70.4 million (up 62% year-on-year), while advertising is expected to reach $49.3 million (up 12% year-on-year).

Zing News Entertainment introduces good books about Kpop: The books Shine, I'll Be The One, Kpop Revolution... explore many aspects of Kpop such as the process of becoming an idol, difficulties, and pressure from the public. In particular, the novel Shine by Jessica Jung (former member of SNSD) tells the story of Rachel Kim - an intern at one of the leading entertainment companies in Korea. To realize her dream, Rachel has to face many different challenges in the entertainment industry.

Linh Phuong

The Power of Cube Cube (G)I-DLE Kpop Big 4 HYBE JYP SM YG Yuqi Minnie