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Yang Min Suk’s Interview on YGE going public

YG Entertainment to go public
‘When we obtain the additional revenue through the public listing, we will be able to do far better than what we have achieved over the last 15 years.’

Korean talent agency YG Entertainment, which manages the popular boy band Big Bang and girl group 2NE1, will officially list on the Kosdaq on Nov. 23.

With YG shares expected to begin trading in less than two weeks, investors will be able to trade stocks of the country’s three big entertainment firms, SM, YG and JYP, which are leading the spread of K-pop across the globe.

“So far, YG has been leading the trend,” said YG Entertainment CEO Yang Min-suk in an interview with the JoongAng Ilbo on Tuesday. “Going public on the Kosdaq shows our belief that the company will continue to grow in value in the future.”

YG, the nation’s second-largest entertainment firm after SM Entertainment, was founded in 1996 by Yang Hyun-suk, a former member of Seo Taiji & Boys.

The former K-pop star is currently chief producer and president of the company. Min-suk is his younger brother.

While the older brother is now in charge of nurturing celebrities and producing music, Min-suk takes care of managing the company.

“Our roles are clearly divided,” said Min-suk, who earned a master’s degree in business management at Yonsei University. “My brother doesn’t know all the minute details involved in running the company.”

YG’s sales last year jumped to 44.8 billion won ($40 million) from 18.5 billion won in 2008. YG’s operating profit last year was 10.3 billion won, and its net profit over the same period was 9.8 billion won.

It has been so successful this year that sales in the first half almost match those for the whole of 2010.

“When we obtain additional revenue through the public listing, we will be able to do far better than what we have achieved over the last 15 years,” the CEO said.

“The extra revenue will be used for scouting new talent. We will also be more aggressive in terms of expanding into Asia, Europe and the U.S. by establishing affiliated firms there.”

When asked for his thoughts about the company’s rivalries with SM and JYP, he said the three work together as much as they can, describing this as “healthy competition”.

“In this game, I don’t think someone wins by trampling on others,” he said. “Fans don’t hate Big Bang [produced by YG] because they like 2PM [produced by JYP]. We meet frequently to discuss how to expand our businesses. We share a common belief that we need to make this industry keep on growing.”

The Korean Wave of K-pop bands was first stirred up by Lee Soo-man, a producer at SM Entertainment who helped create popular singers and bands including BoA, TVXQ, Girls Generation and Super Junior.

After TVXQ and BoA achieved huge success in Japan and Southeast Asia in the early 2000s, other entertainment agencies, including YG and JYP, run by Park Jin-young, began introducing their singers in overseas markets.

Industry sources said cultural exports will soon become among the nation’s major export items, as nearly half of these K-pop bands’ annual sales now come from overseas markets. For YG, 43 percent of its sales last year came from abroad. Of those, 90 percent were in Japan.

SM Entertainment had a market cap worth almost 1 trillion won in October thanks to the success of its musicians. The aggregate value of the company surged to 959.4 billion won during trading late last month.

And as the stars get more exposure overseas, sales are likely to keep booming. This has been the case with 2PM, which JYP launched in Japan in May. Now the two members of the boy band appear in popular televised Japanese dramas as well.

In response to claims that K-pop is nothing more than a temporary fad in the eyes of the world, Yang said he viewed the internationalization of the genre as more of a slow moving and steady process.

“K-pop has had a powerful ripple effect and influence after music videos and related material began gaining traction on YouTube,” he said. “Now this content, which we have spent a long time preparing, is finally getting some recognition.”

YG also represents singers Psy, Se7en, Tablo and Gummy, as well as actors such as Ku Hye-sun and Kang Hye-jung, but it relies heavily on Big Bang. The band accounted for 43 percent of total sales last year.

However the band’s fortunes took a turn for the worse this year as its two members, Daesung and G-Dragon, were both implicated in scandals.

In May, Daesung ran over and killed a motorcyclist lying on the street on Yanghwa Bridge. Prosecutors investigating the case acquitted him of negligent homicide due to a lack of evidence.

Meanwhile, G-Dragon was questioned on charges of smoking marijuana in May in Japan when he was on tour, but he was released without being indicted in September.

The scandals have taken their toll on YG’s operations, with the company’s public offering expected to be priced at between 22,100 won and 28,800 won per share, down 10 percent from what it was initially seeking.

YG recently formed a risk management task force to control all negative publicity and damage resulting from such controversies to protect its brand.

“The entertainment industry is a people-oriented business and it has some inherent risks,” Yang said on Tuesday. “But there are more opportunities out there for the industry.”

 

Source: Joongang Daily

Shared by Vic @ bigbangupdates

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