The aim to be Entertainment industry ‘Big 3’… Footsteps to China after listing on stock market.
‘What’s Your Name? What’s your mobile number? Do spend some time’
‘We are now like the pointers of 12:30, Going to places where we can never return’
‘I am Red with my bright lipsticks on. Aegyo with a bite is an art’
These were the top song lyrics for the past two years. Fans from Korea and foreign lands would easily follow and sing along to these lyrics. These are song lyrics from idol group 4minute and BEAST – idol groups who are the center of Hallyu wave.
The agency to 4minute, Beast and world star Rain, ‘Cube Entertainment’ is about to enter the stock market.
Cube will be joining SM Entertainment, YG Entertainment and JYP Entertainment – the Big 3 of the entertainment agencies after this listing effort on KOSDAQ.
On 13th February, we met up with Cube Entertainment’s representative director, Park ChungMin at its headquarters in Seoul CheongDamDong. “This flotation exercise will be a turning point for Cube Entertainment as we will stand aside the local ‘Big 3’ and make our attempts to be a global entertainment company”, expressing the company’s aspirations.
Cube Entertainment is in the midst of preparations to merge with WooriSpac2, a ‘Special-purpose Acquisition Company’ (SPAC) [T/N: Companies that are established for the purpose of flotation/listing exercise] in April. The set date for the merger is on 30th March. Following the merger, Cube Entertainment will be listed on 9th April. They are the prestigious company that houses BEAST, 4minute, G.NA, Rain and many more.
◆”Investing in China and other geographical areas”
Representative Park explains, “The financing of about 14.2bil Won will be used to establish ourselves in the global market as well as to develop new artists. The amount to be received is a relatively conservative figure as compared to the worth of our growth based on our internal information.”
He emphasized, although the scale of operations (of Cube Entertainment) is small, the value of artists in the company is potentially comparable with the Big 3.
He continued, “Till far, there have been strong requests from overseas to hold activities for 4minute, BEAST or BTOB. However, many of them were rejected due to practical problems” and, “We plan to expand our human resources and systems, so to enter into the Japan, South East Asia and China’s market.”
Currently, Cube is practicing a ‘Regional Strategy’, whereby there are four main geographical areas, namely Korea, Japan, China and South East Asia.
In Japan, BEAST and BTOB are signed under local management companies. BEAST are under contract with Hakuhudo with a ‘minimum guaranteed fees’, while BTOB signed with Kiss Entertainment. After finalizing the contract with Kiss Entertainment, BTOB had completed their ‘major debut’ (a term used in Japan referring to the release of an album) in Japan.
Representative Park explained, “Both companies have stable management systems and possesses the experience in working with Hallyu Stars. In BEAST’s case, they are receiving almost the best treatment as a foreign artist.”
Despite the infrequent activities in China up till now, starting from this year, Cube Entertainment plans to enter the market more aggressively.
Representative Park said, “We are more meticulous in advancing into the China market than any other competitors” and, “We are currently coordinating with 2~3 large-scale Chinese contents distribution companies and likely to finalize these decisions before the first half-year ends,” he revealed.
◆ Strong performance expected for this year… BEAST ‘World Tour’, Multinational Girl Group
The company expressed their anticipation for extraordinary performance this year due to their current investment in Japan as well as their new advancement in China. It was forecast that operating profit and net profit would be 5bil Won and 3.9bil Won respectively. Last year, Cube Entertainment recorded a revenue of 14.2bil Won, operating profit of 1.8bil Won and net profit of 1.3bil Won in their 3rd quarter.
Representative Park highlighted, “The performance for this year is measured based on assumptions that are fairly prudent. BEAST will once again organize World Tour (performance fees, of which are the highest income earner) which were not held for the last two years. In the first half-year, multinational female group (tentatively CLC) will be making their debut too.”
As compared to other competitors, the strength of Cube Entertainment, according to Representative Park, is the humane management it uniquely owns.
He responded, “4minute or BEAST have entered into their 7th year, and not even once they were involved in drugs, drink-driving or any society problems” and, “Every quarter of the year, we would have 1~2 meetings, in a conference manner, with our artists and their parents. This is set up as a means of constant communication with them.”
Other than artists that have made their debut, trainees of about 20~30 of them are actively receiving psychological consultation, sex education and other long-term self-management, not just the usual singing or dancing lessons.
Another strength is that key artists are more flexible in terms of contracts. Most of the contracts with key artists end around 2016, which is just a span of one to two years.
Representative Park expressed, “Usually, negotiation for a renewal of contract starts 6 months before and after the contract expires. This helps to reduce any problems during the negotiations” and, “The renewal of contracts are usually based on a trust relationship between the management and the artists, so there was never a contract problem”.
Towards their medium and long-term goals, Representative Park said, “We aim to be a humane management system and supply even more good contents through enhanced production abilities in terms of music and videos” and, “We target to leap even further to position ourselves in the global market as we enter into the Chinese market this year.”
Cube Entertainment will be merging with WooriSpac2. The general meeting with shareholders will progress on coming 26th February and the set date for the merger is on 30th March, while listing date to be on 9th April.
After the merger, a total of authorised 25,073,767 shares will be issued which will give rise to 2.5bil Won of capital. The market capitalisation for the company is about 57.7bil Won. [T/N: Market capitalisation basically means the worth/value of the company] Currently, major contents provider IHQ owns 50.01% of Cube Entertainment.
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