What is the story
The Okay-pop trade is getting ready for a revival following a big $8B fairness dip, primarily attributed to declining album gross sales.
Main South Korean trade gamers similar to HYBE, SM Leisure, JYP Leisure, and YG Leisure have seen practically a 50% drop in shares since their peak in 2023.
These corporations are actually refocusing on new expertise, distribution partnerships, and enhancing their presence on streaming platforms to bounce again financially.
Progressive methods to counter declining album gross sales
The hiatus of BTS (on account of necessary navy enlistment), coupled with lowered album gross sales in China, has prompted Okay-pop companies to develop progressive progress methods.
Market specialists from Goldman Sachs and HSBC Holdings expressed optimism about these methods, which contain partaking followers by concert events and increasing into the US and Japanese markets.
“Present considerations concerning the Okay-pop outlook do seem extreme,” stated HSBC analyst Kim Jun-hyun, emphasizing the potential for “different methods to monetize Okay-pop,” reported CNBC.
Decline in bodily album gross sales challenges Okay-pop trade
Regardless of the dominance of digital streaming in in the present day’s music scene, Okay-pop companies have historically relied on bodily album gross sales, usually bundled with unique merchandise.
Nevertheless, a hunch in album gross sales in direction of the top of 2023 resulted in HYBE witnessing its slowest quarterly progress for the three months ending December.
Yuanta Securities predicts a 5.3% year-on-year lower in album gross sales in 2024 by the 4 main Okay-pop companies to 82.7M copies.
HYBE leads strategic shift with Common Music partnership
HBYE—the label behind standard teams like BTS and SEVENTEEN—is main the trade’s strategic shift by partnering with Common Music Group for distribution, thereby increasing its digital and geographical attain.
This transfer, together with its presence on international streaming platforms, enabled ILLIT, a woman group below HYBE’s administration, to make waves by recording the very best first-week streams for a Okay-pop debut album on Spotify.
New expertise spotlighted to offset downturn in China
In the meantime, different labels are additionally highlighting new skills to counteract the downturn in China.
SM is predicted to see a surge in earnings progress because of the rising recognition of its boy band Riize, whereas JYP is sustaining its income base by busy schedules for key artists like Stray Children and TWICE, in keeping with Morgan Stanley.
Followers are additionally eagerly awaiting the return of YGE’s globe-trotting woman group BLACKPINK.
Offline live performance audiences: A brand new metric for Okay-pop progress
With the easing of COVID-19-related restrictions, Goldman Sachs analysts reportedly counsel that offline live performance audiences must be a extra important metric for measuring Okay-pop’s progress in comparison with bodily album gross sales.
They predict a 26% annual enlargement of Okay-pop’s fan base over three years, with viewers progress in Japan being a big driver.
This shift in focus towards stay performances may doubtlessly redefine success metrics inside the trade.
