As South Korean entertainment companies have seen major drops in their stock prices, HYBE may experience a massive profit loss when BTS members have to take their mandatory military enlistment. So to avoid this, the music label reportedly has a plan if ever Suga, J-Hope, RM, Jimin, V and Jungkook enlist.
HYBE already unveiled its first-quarter earnings and fell short of the market's expectations, which was deemed too high. So, what would happen to the company when BTS starts to enlist?
K-pop idols are the biggest source of company's income, so the uncertainty surrounding their military enlistment affects its first-quarter data. In an interview with Invest Chosun, the label's official revealed it had already prepared an expected plan if the group had to start their military service.
The government of the new South Korea's President Yoon Seok-Yeol touched on this issue and an official revealed it was hard to predict if the group would be enlisting because "no one is actively involved in the passage of the related bill."
So with this uncertainty, the publication noted that the company shouldn't be obsessed with the enlistment issue. Sure, the global hitmakers are its current hype, but it has to make its next move.
Someone familiar with HYBE revealed it had already prepared an expected plan for the scenario in which BTS members would enlist. Some insiders believe it's better to finish the enlistment as soon as possible than to continue with the uncertainty.
Though enlisting together is being considered so that they will be discharged altogether at once, it may be far from happening. Rumors have it Jungkook is preparing for his solo activity in the U.S. and HYBE has been following the "iron rule" of group activity since BTS debuted.
Though he has a song for each group's member, he has yet to make his solo activity like other idols. So, his time may have now come.
To cover the possible loss, HYBE introduced HYBE IM, a game metaverse division and established a separate subsidiary, per AllKpop. The company reportedly recruited several people from game companies, like the former Nexon director Jung Woo-Young.
However, considering HYBE CEO Park Ji-Won used to be the Nexon CEO, it's widely believed that the label is now entering the game industry.
An official from the financial investment industry said it was a turbulent time when entertainment companies had to break away from the old profit structure, relying mostly on artists' sales.
So, they had to find a way to survive in new environments, like Web 3.0 and Metaverse. Though this is not the first time it happened, it remains to be seen if this can work out as a long-term revenue source.
