Ji Yun Sung, Dartmouth Business Journal
“Kim Nam-joon! Kim Seok-jin! Min Yoon-gi! Jung Ho-seok! Park Ji-min! Kim Tae-hyung! Jeon Jung-kook! BTS!” Probably for the first time ever, the audience chanted Korean names as BTS made an appearance on the Ellen Degeneres show last year.
BTS, a seven-member South Korean boy band, has been gaining widespread attention outside their home country. In the four years since their debut in 2013, the band has broken records unprecedented for a non-American artist. In May 2017, BTS got 320 million votes for Billboard’s Top Social Artist award, surpassing artists such as Justin Bieber, Taylor Swift and Ariana Grande. Recently, BTS ranked as high as 28th on the “Billboard Hot 100” and 11th on “Billboard’s Artist Chart” — achievements that are unprecedented for an international artist outside of Latin America. With their latest album “DNA,” BTS ranked number one in the iTunes album charts of 73 countries in 3 continents, according to CNN.
While the Korean Pop (K-pop) industry has produced artists and tunes, such as Psy’s “Gangnam Style,” that have achieved viral success, BTS’s level of sustained growth and recognition is unprecedented for Asian artists. Seemingly out of nowhere, BTS caused a frenzy in a music industry long dominated by American pop artists. So, how was BTS able to gather so much popularity and loyal fandoms in countries with very little knowledge of the Korean language? And more broadly, is the K-pop idol industry a fad, just as short-lived as “Gangnam Style”, or is it sustainable in the long-term?
Jeff Benjamin, a Billboard journalist specializing in K-pop, explains how a multitude of factors explain why fans — with little to no knowledge of the Korean culture or language — are attracted to K-pop artists: they’re great performers, singing, rapping, and dancing at the same time; they’re meticulously trained; and their primary mode of distribution are music videos, creating a music experience that is heavily focused on visuals and effects. The well-synchronized dance moves, vibrant colors and catchy EDM beats create an immersive experience.
Additionally, nearly all successful K-pop artists are in groups. Entertainment companies craft a narrative for each member whom fans can empathize with. Each member is given a role – the leader, lead singer, lead dancer, rapper, entertainer, and even the designated “good-looking one.” K-pop companies do not just sell music, they sell an experience created by meticulous branding.
As a result, K-pop is a multi-billion dollar global industry. Korea Creative Content Agency reported that the total export revenue of K-pop industry in 2016 was 4.7 billion dollars. The industry employs approximately 80,000 people.
Yet, while K-pop may seem flashy and has captivated the fascination of millions, there is a darker side to the business. In December 18, 2017, Kim Jong-hyun, the lead singer of SHINee — one of the most popular groups managed by SM entertainment, the largest entertainment company in Korea — committed suicide, prompting both national and international debate over the demands of the industry.
The business model in K-pop is unlike that of American pop. For example, American record labels have a relatively limited scope compared to the equivalent K-pop “entertainment companies.” Most American record labels manage strictly business activities such as the production, marketing and distribution of music. Korea’s entertainment companies do all that, but also recruit and train potential artists starting from an age as early as 10, loan mandatory housing in company facilities that artists later pay off with their own money and manage the diets and lifestyles of their artists. Korean entertainment companies construct agreements that specify nearly all aspects of the artists’ career and personal lives while under contract.
As a result, K-pop “idols,” as they are referred to in Korea and within their fandoms, are an all-in-one package gift-wrapped by their entertainment companies. In order to ensure that the idols are following their protocols, the company watches them for 24 hours a day, according to Hankyoreh Media Group. The idols are under tight restrictions by the management company that directs their whole lives—how to sing, how to present themselves in public, what to wear, what to eat, what to say, who they can meet and cannot—as many experienced K-pop idols, such as Girl’s Generation, have reminisced in interviews. In other words, Korea’s entertainment companies are the brains and muscles behind their artists.
One part of the K-pop industry that recently came under intense scrutiny is the trainee system. Entertainment companies have many “trainees,” who are potential idols recruited from an early age that practice their skills under the company’s instruction. According to the Fair Trade Commision of South Korea (FTC), the average training cost the company invests in per trainee is only $90 dollars a month. Since it does not cost much money for the companies to retain trainees, companies can afford to retain trainees as long as they desire. As a result, trainees are kept in a constant state of uncertainty, often not even getting a chance to debut before they get too ‘old.’ Further, companies create contracts with high penalties for quitting or moving to a different company. The trainees, as young as they often are, often sign the contract without fully realizing the consequences. According to the FTC statement, six entertainment companies, including JYP and FNC, have imposed a penalty much larger than their investment on the trainees, keeping the trainees and even debuted singers in debt of the company. Thus, singers were effectively forced to listen to the protocols of these entertainment companies. The Fair Trade Commision has recently updated on their “Standard Contract” that is enforced on the companies in order to ensure fair conditions for the idols.
Underneath the glitz and flash, K-pop is a calculated business. The entertainment companies behind K-pop artists strategically convert artists into brands that transcend differences in language and culture. Although entertainment companies wielded incredible bargaining power due to the nearly endless supply of K-pop hopefuls, they appear to be treading more carefully owing to recent scrutiny from government organizations and bad publicity. Yet, given the recent backlash against these entertainment companies, a reckoning appears to be brewing.