China investor seeking another slice of K-Pop with music agency deal

YG Entertainment

29/02/2016 08:35

* Cube Ent shares up 30 pct on Chinese investment talks 
    * Alibaba acquired 4 pct of top K-Pop agency S.M. in Feb 
 
    By Joyce Lee 
    SEOUL, Feb 29 (Reuters) - Talent agency Cube Entertainment 
Inc  182360.KQ  is poised to become the latest K-pop producer to 
link up with a Chinese partner, banking on the popularity of 
everything South Korean from make-up to music in the world's 
second largest economy. 
    IHQ Inc  003560.KS , which controls Cube, said on Monday its 
parent C&M was in talks with Chinese investors over a possible 
investment, without providing further details. Cube represents 
popular K-pop groups Beast and 4minute. 
    Online media firm Money Today said the investment could be 
worth up to 100 billion won ($80.7 million), citing an unnamed 
source. News of a potential deal sent shares in Cube surging by 
the 30 percent ceiling on Monday. 
    K-pop is big in China, part of the broader "Korean wave" of 
cultural exports popular in Asia and globally, and partnerships 
between Chinese digital music service providers and K-pop 
producers have accelerated since China stepped up music 
copyright protection in July 2015. 
    "As with copyrights, there are signs that China's music 
market is changing, and we expect K-pop agencies to eventually 
be able to get a share of the concert profits instead of the 
current fixed sum," said Kyobo Securities analyst Chung Yu-Seok. 
    Earlier this month, a Singapore-based unit of Alibaba Group 
Holding Ltd  BABA.N  agreed to acquire a 4 percent stake in 
South Korea's largest entertainment management agency S.M. 
Entertainment  041510.KQ  for 35.5 billion won, as part of a 
strategic partnership, S.M. said in a filing.  
    Another K-pop agency, FNC Entertainment  173940.KQ , 
attracted investment of 33.7 billion won from Shanghai-based 
Suning Universal Media in November, according to an FNC filing. 
    Some K-pop agencies are known to boost physical album sales 
by releasing different versions of the same song. S.M., for 
example, released 18 versions of group EXO's hit album late last 
year, in both Korean and Chinese, so fans can collect them all.  
    Agencies such as S.M. and YG Entertainment Inc  122870.KQ  
are also expected to leverage their digital music exposure in 
China by increasing the number of concerts they stage there, 
analysts said.  
    In China, digital music made up about 72 percent of the 
music industry 2014 revenue of $790 million, according to PwC 
data, larger than 46 percent globally, according to the 
International Federation of the Phonographic Industry (IFPI). 
    IFPI said informal estimates suggest Chinese-language music 
accounts for around 80 percent of China's music market, with 
K-pop and Japanese J-pop combining for another 10 percent, and 
other international music accounting for the remainder. 
($1 = 1,239.5000 won) 
 
 (Editing by Miral Fahmy) 
 ((miral.fahmy@thomsonreuters.com; +65 6870 3813; Reuters 
Messaging: miral.fahmy.reuters.com@reuters.net)) 
 
Keywords: SOUTHKOREA KPOP/CHINA