With most music companies now having reported earnings for the last quarter, South Korean companies stand apart with some of the biggest gains. JYP Entertainment was up 126% year over year. SM Entertainment jumped 19.3%. YG Entertainment rose 11.6%. HYBE, the largest and most diversified of the four, was up 10.2%.
These results raise an obvious question: What are South Korean K-pop companies doing right? Most importantly, K-pop continues to be successfully exported from South Korea and, increasingly, the companies are developing new artists in foreign markets (such as @Team in Japan, KATSEYE in the U.S. and dearALICE in the U.K.). But another factor is the K-pop business model, which oversees more aspects of an artist’s career compared to the typical Western music company’s approach.
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The success of the K-pop model is just one highlight from the slate of earnings results released over the last three weeks (here’s a recap of all music companies’ earnings). Read on for more on K-pop and two other takeaways.
K-Pop’s business model in the spotlight
K-pop companies’ financials are hard to beat when they’re successfully developing new acts and selling both tickets and merchandise on established artists’ tours. HYBE, SM Entertainment, YG Entertainment and JYP Entertainment all posted strong Q2 results with a business model that draws a sharp contrast to the Western major music group model (seen in Universal Music Group, Sony Music Entertainment and Warner Music Group).
For starters, South Korean companies have far fewer artists than their Western counterparts, but they collect revenue from more places, including concerts, merchandise, licensing, management and appearances. K-pop companies don’t rely much on recorded music despite building their entire businesses on creating music with maximum popular appeal. Companies are instead built to maximize every aspect of an artist’s career.
In K-pop, working at scale doesn’t mean signing more artists. K-pop rosters are incredibly small. HYBE’s website lists 17 artists. JYP Entertainment lists 14. SM Entertainment shows 18 artists. YG Entertainment, home of BLACKPINK, shows just 7.
In contrast, the Western majors have more diverse portfolios and are more reliant on their recorded music and publishing businesses. At UMG, for example, recorded music accounted for 76% of total revenue and 87% of adjusted EBITDA in the first half of 2025. Over the years, the majors have divested of some businesses, namely physical distribution and manufacturing, and added new ones such as merchandise divisions (merch was just 5% of UMG’s first-half revenue).
Another difference between the K-pop and Western approaches is the degree to which success relies on streaming services. K-pop companies rely more on their ability to convert fandom to purchases (CDs, merchandise, concert tickets) than streaming services’ ability to acquire new subscribers or willingness to deliver growth through price increases. Streaming accounted for just 5% of JYP Entertainment’s Q2 revenue, for example, while merchandise and concerts represented 31% and 29%, respectively. In that sense, South Korean music companies largely control their destinies.
Western companies also succeed by developing artists and songwriters and creating hits, which translates into streaming market share, and they have a deeper reliance on streaming services for the quarterly and annual growth they must deliver to investors. In any one quarter, a Western music company’s results can be swayed more by Spotify’s decision to raise U.S. prices than by the quality of its new release schedule. So, it makes sense that the majors are pushing for high-priced superfan subscription tiers that would generate incremental revenue at a time when new subscribers are becoming harder to find in mature markets.
A downside to the K-pop model is that financial results rise and fall with release schedules, tours and development of new artists. That’s what happened to HYBE in 2024: The company still achieved record revenue ($1.58 billion), but it experienced more volatility than in previous years. In 2024, there was a 101% difference between its highest and lowest quarterly revenues. In 2023, the high and low quarters were only 51% apart. In 2022, it was 87%.
The same volatility was a key reason JYP Entertainment’s most recent quarter looked so good. While quarterly revenue of 215.8 billion KRW ($157 million) was a record high and up 126% year over year, it benefited from a favorable comparison to the prior-year period, which was the weakest of its last 11 quarters. Public companies and their investors typically want to avoid such large swings, but variability is part and parcel to K-pop corporations.
The three major music groups have relatively little volatility because they have huge, diversified rosters and increasingly diversified businesses. UMG owns and administers more than 5 million copyrights, according to its 2024 annual report, while Warner Chappell Music represents works by more than 180,000 songwriters and composers, according to WMG’s latest annual filing. As more artists choose to maintain ownership of their intellectual property, the majors are making more money from providing services to them (Sony’s AWAL and UMG’s Virgin Music Group). They also administer copyrights through joint venture investment vehicles (UMG with Chord Music Partners, WMG with Bain Capital). For the three majors, working at scale means fitting as many eggs into their baskets as possible.
The South Korean model will be put to the test when enthusiasm for K-pop reaches a saturation point and global audiences’ tastes shift. But now, with K-pop still surging in popularity on multiple continents, it’s hard to beat.
Foreign exchange muddied the picture
Music companies’ results were mostly good in the last quarter, although coming to that conclusion sometimes required more effort than usual. Blame U.S. trade policy and investors’ wariness toward the U.S. as a financial safe haven, which has resulted in a weakened dollar in 2025. The dollar’s dip distorts earnings results. For companies that report in U.S. dollars and collect a significant amount of their revenue outside of the U.S., reported results look great (with a strong euro, for example, sales in euros convert favorably into dollars). For companies that report in other currencies, a weak dollar makes sales outside the U.S. look worse than they really are.
Differences in accounting make apples-to-apples comparisons more difficult. UMG provides results in two ways: as reported (the worse of the two) and in constant currency (the better of the two). For WMG, the lone major music group that reports in U.S. dollars, constant currency is worse than the as-reported figures. Sony Music (and its parent company, Sony Corp.) reports in yen but doesn’t provide constant currency results. Getting a better sense of Sony’s results requires converting yen-denominated figures into dollars using historical exchange rates.
With all that out of the way, here’s how the three majors’ numbers looked last quarter: UMG revenue was up 1.6% as reported but up 4.5% in constant currency. WMG revenue was up 8.7% but up just 7.0% in constant currency. Sony Music revenue was up 5.0% as reported and 13.3% on a dollar-denominated basis.
Ticket sales aren’t good everywhere
It’s never a good look when a company’s earnings announcement leads with a notice of a major cost reduction plan, but that’s what ticket reseller Vivid Seats did with its second quarter earnings press release on Aug. 5.
Revenue fell 28% to $198 million, and marketplace gross order value — the value of the tickets purchased — fell 31% to $686 million. Adjusted EBITDA dropped to $14.4 million from $21.7 million in the previous quarter. Average ticket orders fell, too, to $315 from $357 in the first quarter. Net loss cratered in the second quarter, falling to $263 million from $9.7 million in the first quarter.
Vivid Seats CEO Stan Chia attributed the decline to “economic uncertainty,” the FCC’s mandate for all-in pricing and “underwhelming” sports playoff matchups. CFO Larry Fey also suggested that the company’s search traffic is being affected by both AI adoption and competitors’ willingness to outbid Vivid Seats for top search results.
Ticketmaster — a primary ticketing company that also offers a secondary marketplace — doesn’t seem to have the same problems. The company’s Q2 revenue grew 2% to $742.7 million and gross transaction value rose 7% to $9 billion — a record for the second quarter. CFO Joe Berchtold explained on the company’s Aug. 7 earnings call that Ticketmaster is less reliant on search traffic because its steady flow of ticket on-sales creates “organic traffic,” which in turn creates less volatility in its secondary business.
