K-pop record labels have lost one of their most lucrative revenue streams during the COVID-19 pandemic ― their stars performing in front of massive crowds. In a desperate attempt to survive the crisis, many have turned to online platforms.
K-pop titan BTS, for instance, performed the virtual concert “Bang Bang Con: The Live” in June and succeeded in attracting more than 750,000 paid viewers around the world. Big Hit Entertainment, the group’s agency, is estimated to have earned about 22 billion won ($18 million) from ticket sales.
Boy band SuperM staged the online gig “SuperM ― Beyond the Future” in April, drawing an audience of some 75,000. SM Entertainment, its agency, is estimated to have made more than 2.4 billion won ($1.9 million) through the event.
Meanwhile, many small and mid-sized companies have failed to find solutions to keep their businesses profitable, according to Yoon Dong-hwan, vice president of the Record Labels Industry Association (LIAK) and CEO of management company M.Y.music Ent.
“I think the virtual concert is profitable only for about the top 10 K-pop stars that have a solid fandom in Korea and beyond,” Yoon told The Korea Times. “Many other stars who are less popular (especially overseas) tried but failed to make them profitable.”
LIAK, established in 2012 by local music labels, is a nonprofit trade organization that aims to protect the interests of its members and promote diversity in the industry, where only a few stars and music styles receive much of the spotlight.
“Powerhouses like Big Hit and SM have their own online platforms to live-stream a concert, but smaller K-pop agencies don’t,” Yoon said. “So about 40-50 percent of their concert profits go to the platform owners that stream and promote the event on their behalf.”
He said the companies also pay for venues, sound, lighting, instruments, outfits and catering services, among others. It is same as offline shows, just without the crowds. But the ticket price for an online event is cheaper ― only about 30,000 won for one that would cost more than 100,000 won at a concert hall.
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“Given all these, it is tough for smaller agencies to generate revenues unless their stars have a very strong fan base who will still pay for events where they cannot see the stars in person,” Yoon said. In an effort to help struggling entertainment businesses, the Ministry of Culture, Sports and Tourism announced on Sept. 1 that it will inject 29 billion won into building a studio and organizing online concerts for them. But industry insiders say the policy will likely be little help.
“A K-pop band without strong international fandom can’t attract enough viewers to make virtual concerts profitable,” Yoon said. “One thing the ministry can try is to bring together big stars and less popular ones for joint events. But it needs to think more about how to make the offer more appealing to superstars who do not need its help.”
Critic Park Soo-jin, who writes for music magazine IZM, agrees. “I believe what small and mid-sized K-pop management companies need is not a studio, but more opportunities for their artists to receive the spotlight with their music,” Park said. “I doubt that the venue will continue to be used after the pandemic.”As the virus still rages in much of the world and social distancing is the new normal, some K-pop management companies have been pushed to the brink of bankruptcy.
According to LIAK, more than 539 performances in Korea were delayed indefinitely or canceled between February and July. The total financial damage was estimated at over 121 billion won. To help such companies, Yoon said, the government should focus more on supporting their album production.
“For the agencies and the singers, the government needs a policy that can support them to continue producing albums,” he said. “The companies also need rent assistance for the items they may need to work in the pandemic environment.” He said he will continue to have such industry voices heard in the policy-making process.
But for now, Yoon and Park say small companies should come up with their own strategies to survive ― before they can take advantage of K-pop’s global popularity that appears only to be growing amid the pandemic.
Source: The Korea Times