Ok-pop woman group BlackPink carried out at The Late Late Show with James Corden airing Thursday, April 18, 2019. (Photo by Terence Patrick/CBS by way of Getty Images)
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The creator behind the brand new exchange-traded fund geared toward changing international followers of Korean content material into an funding alternative is optimistic in his premise.
Since its launch on Sept. 1, the KPOP and Korean leisure ETF has not carried out nicely — not too long ago buying and selling on the New York Stock Exchange Arca at $15.05 — a roughly 23% drop from its debut. That’s in step with the general Kospi index having plummeted greater than 20% this 12 months.
But Jangwon Lee, chief govt of CT Investments and Contents Technologies and the creator of the ETF, is hopeful concerning the Korean leisure business regardless of the sluggish outlook for international markets.
“Content consumption, particularly digital, is comparatively resilient throughout recessionary and inflationary environments and long run,” mentioned Lee in an interview with CNBC, including that it is “been a tricky few weeks throughout all asset courses” because the fund’s inception.
Shares of Korean leisure corporations have been underperforming general, with YG Entertainment’s inventory worth down round 26% year-to-date and Hybe down greater than 64% year-to-date.
“We finally consider that the underlying efficiency of the businesses in our ETF will present additional momentum in attracting demand from a wider investor universe,” he mentioned.
We are witnessing an inflection level in Ok-pop and Ok-content progressively attaining mainstream standing globally from what was extra a sub-culture previously.
Jangwon Lee
CEO of CT Investments
The KPOP ETF says on its web site that it offers “targeted publicity to the Korea Exchange-listed corporations engaged within the leisure business and the interactive media & companies business.” The fund is a 30-stock index, which incorporates leisure corporations that handle bands akin to BTS, BlackPink, and Twice — their respective companies being HYBE, YG Entertainment, and SM Entertainment.
It additionally consists of content material makers akin to Studio Dragon, which produced the hit sequence “Crash Landing on You” and platform corporations akin to AfreecaTV, by which some livestream themselves enjoying video video games and consuming.
“We consider it’s nonetheless in its early innings on condition that we’re witnessing an inflection level in Ok-pop and Ok-content progressively attaining mainstream standing globally from what was extra a sub-culture previously,” he mentioned.
Ok-pop woman group Twice of JYP Entertainment at Yes24 Live Hall on April 22, 2019, in Seoul, South Korea. Shares of Korean leisure corporations have been underperforming general.
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Pent-up demand
Lee of CT Investments and Contents Technologies mentioned the inventive content material companies that this fund makes accessible to international buyers will thrive in the long term, with borders reopening and international locations akin to South Korea and Japan lifting quarantine and testing guidelines for vacationers.
“There is important pent-up demand amongst current followers and Ok-pop artists have been intentionally releasing new albums in time for the reopening,” he mentioned, including that many artist teams have not too long ago resumed their world excursions and live shows.
Financial analyst Lee Ki-hoon at Hana Financial Group mentioned the pandemic proved the style benefitted from its music enterprise being extra “visible idea” oriented, as seen by its social media outreach.
“Its international fandom is seeing a trickle-down impact from teams like BTS and BlackPink, as they had been direct beneficiaries of YouTube – it is not restricted by time or location,” Lee Ki-hoon mentioned in an October report.
BangtanTV, certainly one of BTS’ YouTube channels, has 71.5 million subscribers, whereas BlackPink’s channel has 82.7 million subscribers.
BTS performs onstage through the sixty fourth Annual GRAMMY Awards at MGM Grand Garden Arena on April 3, 2022 in Las Vegas, Nevada.
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‘Long-term believer’
Goldman Sachs predicts income from the worldwide music business will attain $131 billion by 2030 – greater than double the $62 billion for 2017 — including that streaming will enhance the business to report highs.
CT’s Jangwon Lee is equally optimistic, including he’s a “long-term believer” in Ok-pop’s outlook throughout the wider business.
“Ok-pop fan engagement throughout the globe is materially greater than that of different genres throughout metrics, akin to social media engagement and merchandise gross sales together with bodily album gross sales,” Lee mentioned.
“We consider there could possibly be a excessive conversion amongst followers turning into shareholders in corporations that their favourite artists are affiliated with,” he mentioned.
In the nearer time period, Lee of Hana Financial Group mentioned that Hybe, the group behind BTS, could backside out someday round December, when the group’s plans for enlisting in South Korea’s army are finalized.
Lee of CT mentioned the company’s affirmation that the band will transfer ahead with its conscription plans means eliminates some uncertainty.
“A major overhang has been eliminated,” Lee mentioned, including that the main focus of buyers will now “shift towards different development prospects throughout its enterprise.”
