Kakao becomes South Korea's top-earning K-pop agency following its acquisition of SM Entertainment.
Kakao Surpasses HYBE in K-pop Revenue After Acquiring SM
A 15% revenue gain to ₩1.26 trillion (~ $860 million USD) shifts market leadership momentarily away from HYBE as live touring and merchandise scaling pay off.
Highlights
- Kakao seized 27% of total top-tier industry sales last year, producing $860M to become the highest-earning entertainment company in South Korea.
- SM Entertainment provided $564M of that total, depicting a 22.6% year-over-year revenue gain built on world tours for acts like aespa and NCT.
- Combined sales across the four of the biggest K-pop agencies hit $2.29B, putting 71% of the sector's top revenue in the hands of Kakao (including SM), HYBE, JYP, and YG.
Kakao Corp. has reportedly claimed the top position in South Korea’s entertainment industry by revenue, using its 2023 acquisition of SM Entertainment. According to Billboard Korea, it surpassed rival group HYBE Co., which is home to leading K-pop acts like BTS.
The publication cited data compiled by corporate research firm CEO Score from the Domestic Popular Culture and Arts Information System, released July 29, 2026, showing that Kakao achieved ₩1.26 trillion (~ $860 million USD) in revenue last year. This marked a surge of 15.2% from the prior period. According to the study, Kakao accounted for 27% of the combined revenue of the country's top 30 entertainment companies.
The Impact of SM Integration
The key engine of Kakao's top-line expansion was SM Entertainment, which was integrated under Kakao’s corporate umbrella in 2023. SM recorded ₩812.5 billion (~ $564M) in sales, up 22.6% year-over-year, accounting for the lion’s share of success amongst Kakao's seven music and media subsidiaries.
Gains at SM were driven by expanded global concert schedules and higher sales of official artist merchandise. Primary touring acts boosting its revenue included girl group aespa and boy band NCT. Additionally, performance across Kakao’s wider portfolio remained stable, with Starship Entertainment contributing ₩173.2B (~ $120M) with the group IVE, while production arm SM C&C added ₩94.6B (~ $66M).
A Two-Player Trillion-Won Tier
As per the report, HYBE dropped to second place despite joining Kakao as the only other firm to surpass ₩1 trillion (~ $660 million) in annual top-line revenue. HYBE reported ₩1.02T (~ $700M) for the period, led by Big Hit Music’s ₩437.5B (~ $304M) and Belift Lab’s ₩154.7B (~ $108M).
The gap highlights a structural shift in K-pop corporate scale, where one-sided growth through consolidation has created a distinct upper tier. This fact has been highlighted by corporate leaders to the South Korean government, who are actively promoting Korean cultural exports via music. Nevertheless, together, Kakao and HYBE produced over two-thirds of the total revenue generated by South Korea's four main agencies.
Image Credit: CEO Score
Other K-pop Agencies in the Race
Within the rest of the market, JYP Entertainment was placed third with ₩683.6B (~ $475.2M) in revenue, up 40% year-over-year, backed by stadium tours from TWICE and Stray Kids. YG Entertainment ranked fourth at ₩339.2B (~ $236M), showcasing a 71.3% spike driven by concert runs from BLACKPINK, BabyMonster, and TREASURE.
In total, these four corporate groups produced ₩3.30T (~ $2.29B), recording 71% of the total revenue among the top 30 registered agencies. The figures highlight how live event monetization and intellectual property control persistently fortify market dominance among the industry's largest operators.
Author
Diya Mukherjee is a Content Writer at Outlook Respawn with a postgraduate background in media. She has a passion for writing content and is enthusiastic about exploring cultures, literature, global affairs, and pop culture.
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