SEOUL: Big Hit Entertainment, the label behind K-pop phenomenon BTS, is both riding a stunning wave of success and looking for the next big thing.
Over the past year, BTS, which delivered Big Hit most of its earnings, has achieved feats unprecedented for K-pop, including topping the Billboard Hot 100, performing at the Grammys and being named entertainer of the year by Time magazine.
Alongside the accolades have come impressive earnings. Despite the music industry coming under strain since the coronavirus outbreak, when big concerts and live events cannot be held, Big Hit is now valued at around US$7.6 billion, with its stock price doubling since its initial public offering in October 2020.
The company brought in US$716 million in revenues and US$77 million in profits in 2020, up 36 per cent and nearly 20 per cent respectively from the previous year.
With the entertainment giant looking to move from strength-to-strength, Big Hit announced a project with Universal Music Group earlier this month. The two companies will collaborate to assemble and train a new K-pop group to carry on the momentum created by BTS.
Big Hit knows the members of BTS must undergo compulsory South Korea military service at some point and they will need to fill that temporary absence.
That national service sabbatical could be career-ending in an industry of short attention spans and insatiable fan appetite. And for all of BTS’ huge successes, like all pop acts, they will not be cool forever.
HOW BTS REDEFINED K-POP
In announcing the venture, Big Hit CEO Bang Si-hyuk said this combining of forces will “create a synergy that rewrites global music history”, while Universal Music Group CEO Sir Lucian Grange said the companies’ goal is to “further accelerate K-pop as a global cultural phenomenon”.
The thing is, BTS has rewritten the international conversation about K-pop and set a high bar for the next group.
No longer do labels, fans or observers wonder what it might take for the genre to find sustained success in the West.
With a message of “self-love” and active engagement with fans, BTS has reached global prominence that no one could have predicted.
BTS absorbed the lessons of their predecessors and learned from acts that came before them what didn’t work. In the US, they entered a marketplace familiarised with Korea through exposure to acts like Psy, the WonderGirls and Girls’ Generation, all of whom had scored some degree of stateside success.
It’s not just the music industry. The South Korean government too is committed to seeing K-pop remain a global force, in part due to the national pride the country gleans from seeing homegrown acts succeed abroad.
Well aware of the commercial and soft-power potential of the industry, the government is pledging continued support, such as tax breaks and subsidies.
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K-POP’S STAYING POWER
The task now is to leverage that into something long-lasting. Big Hit hopes to create “synergy” in combining Universal’s expertise in the global music industry with its hit-making prowess.
The group will be formed in the US through K-pop’s customary boot-camp style competition, where hopefuls will be drilled in singing and dancing as the group’s architects select members through rounds of elimination.
BTS may sit at the top of the K-pop pile but are far from alone. Blackpink, Twice, Exo and TVXQ are heavy hitters with distinct identities.
Their own passionate fan bases follow their every move with dedication more typically associated with fans of sports franchises.
As BTS and other big companies look toward the future, and the countless competitors mull how to get their own slice of the pop music pie, the question becomes, how sustainable is all this?
While the industry is growing, it will surely eventually hit a point of saturation, with diminishing opportunities for each newly launched act.
And there already are literally hundreds of idol groups. The top notch of the industry are entertainment industry kingpins who rake in millions as they (in normal times) hold concerts in stadiums.
Further down the totem pole are middling acts who travel around South Korea in minivans making local appearances for meagre pay or indie bands that put out music on SoundCloud and other channels.
KOREAN ENTERTAINMENT GOES GLOBAL
The abundance of choice can also have the effect of diluting the whole.
With so many new groups that come across as similar in sound and appearance, alongside countless new K-dramas on the ever-expanding number of streaming platforms, the Korean cultural machine could be undermining its own longevity by presenting audiences with a mind-numbing abundance of choice.
Having a global audience could change the game. The management brass of Korean entertainment titans know they must target overseas markets to grow the pie instead of relying solely on domestic fans, in a rapidly ageing society.
With this in mind, K-pop management agencies have been shrewd in broadening the appeal of their acts, deliberately recruiting members of different nationalities with fluency in languages, in Chinese, English and Thai, to boost groups’ ability to operate overseas.
Just look at Blackpink’s members.
This way, when one audience group turns away from K-pop, as when South Korean-Chinese relations soured in 2017, they can count on fandoms in other parts of the world.
But this lean, mean K-pop machinery may have corrosive effects on performers. International media regularly report on the dark side to the high-stakes lottery of glamorous K-pop stardom.
Untold numbers of young people labour for years with the hope of striking a deal with one of the big management agencies. Many of them endure gruelling conditions, with some cases of physical and sexual abuse.
Even for the chosen few who hit it big, fame can be unpleasant. Recent years have seen a number of high-profile entertainers take their lives while struggling with the pressures of fame.
Korean netizens can be harsh with idols they feel have behaved inappropriately, as was the case with Goo Hara and Sulli.
CONSOLIDATION IN THE K-POP INDUSTRY
Another recent move by Big Hit that drew somewhat less attention than the venture with Universal is the company’s decision to buy a US$63 million stake in YG Entertainment, an older K-pop management giant that has in recent years suffered from a series of scandals.
Big Hit is also partnering with Naver, South Korea’s main web portal and a growing IT giant, to develop an online fan community.
As with so much of online commerce nowadays, the key is to keep fans tuned in, always having a reason to refresh the page and keeping paying attention.
That Big Hit is now publicly traded means the company will face pressure from shareholders to remain profitable and grow consistently.
These power moves will mean that even as the K-pop market keeps getting more crowded, and even if the agency’s next acts don’t hit big, the company will still have revenue streams and a built-in audience.
Perhaps K-pop has gotten too big to be dismissed as a fad. Perhaps despite saturation, K-pop will always have its big players.
Big Hit's recent moves herald a more unequal business landscape, where a few companies exercise ever-growing influence and the uphill climb for countless aspirants will only get more daunting.
Steven Borowiec is a journalist based in Seoul.