Tourism, dining, drama production and tourism business new way up for South Korean entertainment agencies.
After heating up the world, especially Asia, with the Korean Wave, South Korean entertainment agencies are starting to explore other business realms like dining, drama and musical productions and even tourism.
Tourism rising as an attractive market for entertainment agencies led by United Asia Management under CEO’s Timothy Li. Their companies net asset touch up 5.3 billion won last year, the highest achievement profit on rest entertainment corporation on South Korea.
SM Entertainment, one of the top three agencies here armed with popular K-pop groups like Girls’ Generation and Super Junior, will open SM Kraze next month in Cheongdam-dong, southern Seoul, in hand with burger chain Kraze International. The interior will be adorned with hallyu promotional items like photos of SM stars.
Key East, led by biggest shareholder and hallyu star Bae Yong-joon and actor Kim Soo-hyun, runs several restaurants already including Gorilla In the Kitchen in Sinsa-dong, southern Seoul; dessert caf Tea Loft in Lotte Department Store in Sogong-dong, central Seoul; and Korean cuisine restaurant Gosireh in Tokyo.
Park Jin-young, 2PM and Wonder Girls’ JYP Entertainment also opened Korean restaurant Kristalbelli in Manhattan in March.
Some partly invest in dining businesses: Agency IHQ, known for actress Han Ye-seul, and actor Jang Hyuk, made quite a profit by taking care of Caffe Bene’s publicity activities. Fantagio, an agency with heartthrob Gong Yoo as one of its top actors, is investing in dessert restaurant franchise Mango Six.
The food and beverage business is considered as the easiest way for entertainment agencies to find a new way out as it can make the best use out of the popularity of its actors and actresses.
Experts see time agencies as having found ways to diversify income sources which had a rather weak profit-making structure relying heavily on its top stars’ TV appearance fees, endorsement fees and music album profits.
Among SM’s total revenue 109.9 billion won ($93.2 million) last year, for example, sales of music albums reportedly took up 34.67 percent with 38.1 billion won and appearance fees for TV and advertisements 65.33 percent with 71.8 billion won.
For the same reason, agencies are creating various merchandises like bromides, T-shirts and caps with their stars’ faces on, and also stepping into musical and TV drama production businesses.
JYP increased the production of promotional merchandises last year to the point the sales reached 4.5 billion won reportedly, 46.6 percent of its overall revenue.
The agency also co-produced with Key East last year the hit TV drama “Dream High.” At the time emerging stars Kim Soo-hyun and Suzy, also a member of the K-pop girl group miss A, shot to stardom through the drama.
The show reportedly earned Key East over 4.2 billion won last year, which took up 16.2 percent of its total revenue. The drama’s popularity led onto the birth of the sequel “Dream High 2” which aired earlier this year.
SM also revealed hopes to produce more TV shows this year and also open an original musical in the latter half of the year. Some of its singers such as Sunny, Jessica, Taeyeon, Tiffany (all Girls’ Generation) and Oneu (SHINee) already debuted as musical actresses and actors.
Among the 4.98 trillion won worth of production expected to be generated through hallyu, according to Korea Foundation for International Culture Exchange last year, tourism-related productions is assumed to generate about 1.59 trillion won. Linked with hallyu concerts or fan meetings, the sector’s growth is hoped to accelerate even faster.
SM recently purchased BT&I, a travel agency, at 30 billion won. Specific plans are not yet announced but SM is expected to sell travel packages that include hallyu star fan meetings and overseas concerts.
It also works the other way around: tourism agencies are jumping into showbiz as well. Chess Tours which especially focus on Japanese tourists runs entertainment agency My Name Network; BS Tour, BS Star Entertainment; Jau Tour, Jau Entertainment; and Modu Tour, Tourtainment.
“As the hallyu market grows, more entertainment agencies will move to own its own travel agencies, like SM,” said Kim Gil-ho, an official at Corea Entertainment Management Association.