YG Entertainment May Suffer From Lack of Primary 'Cash Cow'

BanSeok Shin, Sept. 19, 2019, 10:30 a.m.


The gloomy outlook on the future of YG Entertainment is becoming gloomier as industry officials have expressed concerns over the company's ability to generate revenue. The label recently took hits to the money it had available when YG and its Founder, Yang Hyun Suk were charged about 6 Billion Korean Won (about 5.1 million USD) after a tax investigation. The fines come after reports that industry officials expect YG to repay the 60 billion Won ($51.6 USD) investment from Louis Vuitton back in October of 2014. The repayment comes as a result of defaulting on the agreement in the aftermath of the 'Burning Sun' controversy. 

The controversy has led to a series of scandals and reports of scandals that have significantly affected the reputation of the label as well as its artists, and as a result, has affected overall company revenue. The company's growth has slowed significantly and stock prices have fallen off a cliff.  To make matters worse, industry officials are worried that none of YG's current artists create enough revenue to support YG as a whole. The emergence of new artists and comebacks of artists like WINNER have done little to change things so far. Even the return of hit dup AKMU next week, is questionable at best, in terms of helping the label's revenue problems. Surprisingly, despite the large the success of BLACKPINK, the level of success reached by the girls was reportedly not as high as anticipated.

Apart from the purely music side of the issue, YG's non-music sources of revenue are also not profitable enough for the company to lean on, leaving one to wonder how the company will manage to stay afloat amid its financial troubles and the currently ongoing negative media that comes out in the aftermath of the 'Burning Sun', B.I drug, and other scandals. Additionally, the company has been forced to go through some internal changes with the departure of former CEO Yang Min Suk and Executive Producer Yang Hyun Suk and with so many of its artists getting into scandals. Things are looking bleak for YG.

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