JYP signs exclusive distribution contract with Chinese IT firm

2021.03.10 15:53:00 | 2021.03.10 15:55:03

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JYP Entertainment Corp., South Korean label behind K-pop girl group TWICE, has stirred up market interest by disclosing it had recently signed an exclusive distribution contract with an unnamed Chinese IT firm.

The exclusive distribution partnership with a Chinese IT company would involve online music, karaoke and live streaming business, it said.

The financial terms and the name of the Chinese partner have not been disclosed but the company is reported to have raised annual sales of 4.37 trillion won ($3.8 billion) in 2019, sparking industry speculation that it could be Tencent Music Entertainment Group, China’s largest music streaming company. JYP Entertainment had teamed up with Tencent in 2018 to launch a boy band Boystory in China.

Since a Korean music label cannot directly distribute music in China, JYP Entertainment will charge a license fee of 8-10 billion won yearly to the Chinese partner for the exclusive rights to distribute its licensed music and receive a share of the revenue generated from the streaming platform.

The distribution contract comes as JYP has been accelerating push in overseas markets including Japan and China. According to Korea Investment & Securities, the music label is projected to rake in 2.3 billion won this year in music sales in overseas markets.

JYP Entertainment is expected to deliver operating profit and revenue of 176.3 billion won and 56.6 billion won this year, both up more than 20 percent from last year, according to South Korean financial market tracker FnGuide Inc.

Shares of JYP Entertainment closed Wednesday 2.63 percent lower at 33,300 won in Seoul.

By Kim Jung-beom and Lee Soo-min

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