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Wednesday, March 22, 2023

WATCH: SM Entertainment details IP monetization strategy and goals under SM 3.0 in new video statement

WATCH: SM Entertainment details IP monetization strategy and goals under SM 3.0 in new video statement

SM Entertainment (hereafter referred to as SM) released a new YouTube video detailing SM 3.0’s IP (intellectual property) monetization strategy.

On February 21, SM posted a follow up A YouTube video titled “SM 3.0: IP Monetization Strategy” is part of their second strategy to implement SM 3.0.

SM Entertainment CFO (Chief Financial Officer) Jang Cheol Hyuk explained, “SM’s IP monetization model mainly includes ‘primary IP business’ and ‘derivative IP business’.” Primary IP business refers to digital music, physical albums, concerts, The foundation of entertainment businesses such as artist management. Derivative IP business refers to the business that provides additional profit sources from the results of Primary IP, namely MD (commodity), IP authorization, fan platform and video content business.

He continued, “So far, SM’s growth has been focused on the Primary IP business. Despite rapid market changes and internal structural constraints over the past three years, unrivaled market leader status and core business competitiveness have been driving the annual growth rate A power company that reaches 30%. Based on this unique driving force, we plan to make another leap in the era of SM 3.0.”

Chief Financial Officer Jang Cheol Hyuk said, “The 2025 sales target under SM 3.0 is KRW 1.2 trillion (approximately US$926 million) with an operating margin of 35%. problem to achieve.”

They list the following goals:

  1. Immediately improve operating margins by overcoming the structural limitations of SM 2.0.
  2. Increase revenue/operating profit through multiple production centers – Primary IP sales are projected to grow 26% annually.
  3. Expansion of high-margin spin-off IP and strengthening of distribution capabilities – By 2025, MD/IP sales of spin-off IP business will increase to KRW 300 billion (approx. USD 231 million).
  4. “Fan platform” integration/internationalization
  5. Increase the profitability of SM 3.0 video content to KRW 150 billion (approximately USD 116 million) by 2025.

Watch the full video below:


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