Kpop is doing well, but idol groups are disbanding one after another... Why?

[satoori]

210113 - Kpop is doing well, but idol groups are disbanding one after another... Why?

This year, the restructuring of the Kpop industry will happen. Kpop industry officials who met at the end of the year and the start of the year agreed. Though the market had grown because of the kpop boom led by groups like BTS and Blackpink, the phenomenon of the rich getting richer and the poor getting poorer has been accelerating. Although the Kpop market grew during the pandemic last year there is a lack of substance to fill the increase and there are many groups waiting to renew contracts after their 7th year of their debut this year, so a generational change in 2021 is expected.

Spoiler

GOT7 - Gugudan, disband one after another

On the 11th, JYP Entertainment officially announced that the contract with the boy group GOT7 had ended. Though it wasn't described as "disandment", it can be said that it's in fact a disbandment because it will be impossible to actively promote as GOT7 without JYP's permission or consent, which owns the trademark rights of "GOT7"

GOT7 is a top-level group that sold over 450,000 copies of their alum 'DYE', which was released last year (based on Gaon Chart). If the price of each album is set at ₩15,000, the sales of one album would be close to  ₩7 billion ($6.35 million). However, the renewal of the contact between JYP and GOT7 did not happen. The industry believes it's because GOT7 wasn't able to break the "seven year curse". Each member's interests are different, and because it's a group with members from different countries including Korea, the US, Hong Kong, and Thailand, the scope of their individual activities is wide. It is quite likely that the company was not able to accommodate all of their individual demands.

About 15 days ago, the girl group Gugudan officially disbanded. The group that caught people's attention because of Sejeong and Mina from MNET's Produce 101 ended their group activities only 4 years after debut. The girl group AOA, which started as a group of 8 members during their debut, only has 3 members left after a member's exclusive contract ended earlier this year. AOA too is thought to no longer be able to promote as a group.

A CEO of a mid-sized music company said, "A group with a lot of popularity will definitely demand more of the revenue distribution at the time of contract renewal. No matter how much revenue they increase, if the singer's share increases and if that doesn't help with the company's growth, they will choose to disband the group. Even if they don't fulfill the entire 7 years of the contract, there is no choice but to give up on the group if  the company's losses are big just from maintaining the group and there's no sign of a turnaround in profits.

There are many groups that are entering their 7th year after their debuts this year, so there are many contracts renewals coming up. The groups include SM's Red Velvet, YG's Winner, Mamamoo, Lovelyz, and Laboum. Since these are so-called "A-class" groups with large fandoms, it is expected that the music industry will go through a fair amount of pain over the contract renewals and groups survivals this year. Even if the group structure stays intact, if several members leave the agency and start individual activities, the significance of the group will inevitably decrease.

Can online concerts really be an alternative?

The biggest reason a music agency gives up on a group is because of poor profitability. Even if some members get caught up in unpleasant incidents and became main topics of rumors, as long as the solid fandom is maintained, like "if they can still earn money," the group is kept intact. However, last year, COVID-19 inflicted a huge blow to Kpop groups by completely shutting down performances, which made up a significant portion of their revenues. To overcome COVID, the music industry pulled out the "untact (virtual) concert" card to use online. After BTS showed their Bang Bang Con, which gathered 750,000 viewers online, other music companies completed with each other to set up an online concert system and actually execute. Though each of the companies distributed press releases touting their achievements, this was only an alternative to offline concerts and a decline in sales was unavoidable.

Ticket prices for online concerts are approximately 20-30% of offline concert ticket prices. Of course, it does have an advantage of accommodating more people at once, but in the case of offline concerts, considering how the sales of goods (merchandise) at the venues are enormous, it is expected that the revenues would drop.

Kang Tae-gyu, a popular music critic, said, "There are a lot of groups that are, in fact, for sale in the music industry right now. Though they have tried to generate profits from long-term concerts aimed at the American, European, South American and Japanese markets, since they can no longer withstand a situation where strategic breakthroughs are no longer possible, investors are releasing their shares and others are not keen on investing so they are choosing to disband. The K-pop industry, which has endured this past year, is now facing its worst situation."

 

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original source: http://m.munhwa.com/mnews/view.html?no=2021011301031812069001

trans cr. bora

 

 

Edited January 16, 2021 by satoori
links added.

[satoori]

12 minutes ago, Green Tea Is Green said:

Tbh it's just that the niche of ifans is unloyal af, they jump to whatever new group is trendy/newly debuted, kind of serving what Korea does with girlgroups so at the end of the day if you have no loyal fans... rip u

true. tho this article is presenting other reasons for why groups are disbanding...even those who are profitable...

"A group with a lot of popularity will definitely demand more of the revenue distribution at the time of contract renewal. No matter how much revenue they increase, if the singer's share increases and if that doesn't help with the company's growth, they will choose to disband the group. Even if they don't fulfill the entire 7 years of the contract, there is no choice but to give up on the group if the company's losses are big just from maintaining the group and there's no sign of a turnaround in profits."

 

covid is also a huge blow of course as we know, since groups are not able to perform - "significant portion of their revenues."

 

"investors are releasing their shares and others are not keen on investing so they are choosing to disband."

Edited January 16, 2021 by satoori

[satoori]

"so a generational change in 2021 is expected."

as expected o.o

the "true" 4th gen is on the way..

 

[satoori]

10 minutes ago, Ghosty said:

I feel like the article kind of answered its question by mentioning the contracts ending by their 7th year. Some groups will renew, some groups will decide to disband, and some groups will continue with half of the group deciding not to renew, and that's okay.

In my opinion, last year/this year didn't really have a difference in the amount of disbanded groups to previous years. It's just more significant since these groups are bigger names, or have high profile members, tbh. 2016-2017 had some major groups disbanding (*or who were put on indefinite hiatus... lbr, it's disbandment at this point): 2NE1, 4Minute, Sistar, Wonder Girls, Miss A, Kara*, Girl's Day*.

All the groups you've listed are major 2nd groups. 

This article I feel the reason it's pointing out those specific groups is because it will impact the shift from 3rd gen. 

 

[satoori]

1 minute ago, Ghosty said:

Yeah, but I was also just listing those groups because it's not a new thing for big groups to disband when they're supposedly doing well into their careers, or to disband when the next generation is beginning to take over. It happens with every contract renewal since usually once the 7 years are up and more groups of a specific generation are disbanding, the torches will be passed onto the junior/rising groups and it's going to cause a generational shift. 

Agree. It's not unusual. By the time a group reaches its 7th year, individual members begin to want more individual actives and an increase of the revenue. If the individual members and company can't come to an agreement then they go their separate ways.

Also these groups are from major companies too. (SM, YG, Woollim, RBW, FNC, JYP...) So it will definitely have an impact.

 

[satoori]

2 minutes ago, cyra laelia said:

and they say im the crazy one here???  those generation is just base on 7 years contract duration...and they only focus on the big 3 or should i say big 4 group only 

big companies ( and popular mid-tier companies) inevitably have an impact on the entire industry

[satoori]

1 minute ago, hynapia said:

Because the market is oversaturated. Just  last year around 30 new groups debuted and probably less than 10 will be profitable enough to last more than 5-7 years. The GP mostly focus in the most popular/trendy groups and fans (both k-fans and i-fans) can't stan 19282737 groups either so they only focus on their faves (that tend to be groups from big or high mid tier companies minus a few exceptions) so that leaves groups from smaller companies with low budget and resources unable to make a decent name for themselves.

true, the market is oversaturated, it's was like that during the 2nd gen too. heck all over the world the pop industry is oversaturated with artists. it's not expected every artists will be well know with the public. and even those who do have a few songs that are mainstream, still don't necessarily mean the GP actually know the group names or much about them or will keep up with them. Basically, as we know the GP isn't required for idol groups to survive.

 

[satoori]

2 minutes ago, hynapia said:

Idk why they mentioned GOT7 though. They aren't officially disbanded and the members themselves said they want to continue as a group. I know it's difficult once they are in different companies but still, a situation like Shinhwa or Beast/Highlight could be possible if they work it out.

because according to it..."Though it wasn't described as "disandment", it can be said that it's in fact a disbandment because it will be impossible to actively promote as GOT7 without JYP's permission or consent, which owns the trademark rights of "GOT7"

Once a group leave a company and/or separate it's a lot harder to promote together. We see it all the time.

 

"Even if the group structure stays intact, if several members leave the agency and start individual activities, the significance of the group will inevitably decrease."

 

[satoori]

4 minutes ago, hynapia said:

True, unless they bought the name from the company they can't indeed promote under that group name because it's trademarked. In any case they can follow the Highlight route and rebrand themselves with a new name.

Even Highlight is barely active. And basically forgotten widespread in the Kpop community.

[satoori]

1 hour ago, reiichi said:

Because they've been going through enlistment. They should be done soon I think.

The final member was discharged early Dec of last year. But perhaps they will be able to gain back some of their momentum.Now a 4 member group with the departure of Jungyun.

 

1 hour ago, Drama Drama Drama said:

Dujun and Yoseob have good recognition but they need some good exposition to reborn the group brand post enlistment maybe Kingdom

Good point

[satoori]

1 hour ago, JamiesGirl said:

I don't really think this has anything to do with this specific situation/time, it's an open secret that having only one or two members from a group "promote the group" rarely results in the whole group being successful. Just look at all the ggs with former I.O.I members, only Chungha who is a solo artist has achieved real success, same goes for bgs with ex Wanna One/X1 members, NU'EST is an obvious exception because almost all members made themselves known to potential fans through PD101 - AB6IX, CIX, Wei and CRAVITY are mildly successful, and you can't say much changed for Victon and UP10TION. 

Most likely Gugand was mentioned mainly to show a recent example of groups disbanding "one after another". They didn't have a long write up about them like GOT7.

1 hour ago, JamiesGirl said:

 Apart from that, I really don't get what's supposed to be special about one major disbandment (GOT7) and revenue declining because of Corona. 

Got7 isn't being used because they're special, but more so like an example. An example of how a group even profitable and fun a major company can the 7th year curse. The article didn't mention revenue declining due Covid as a reason for GOT7 disbandment.

1 hour ago, JamiesGirl said:

.Major groups disband every now and then, and a restructuring because of Corona isn't unique to the Kpop industry?

The article didn't say it was unique to Kpop. It's simple a major factor currently affecting the industry.

1 hour ago, JamiesGirl said:

I also don't see how online concerts cannot be an alternative, there's been less online concerts than there would have been regular concerts, as far as I know, and if you promote the concerts well and convince people to come, maybe with some special perks, you might even bring in more profits than from a regular concerts, since 1. the company is not bound by venue capacities and 2. the potential audience is bigger as they don't have to worry about transport and the time it would take to come to a venue.

I guess, you haven't been keeping up with how online concerts are treated by fans on sns. Perhaps, have any of your favs had one yet, because your comment is cute.

For starters, many people are going to illegally stream the concert. So the audience of online concerts (only counting those who actually pay) tend to be significantly smaller. Online concerts don't seem to have the same value as a in-person concerts to many fans. No amount of special perks is going to change that. Companies have tried.

"After BTS showed their Bang Bang Con, which gathered 750,000 viewers online, other music companies completed with each other to set up an online concert system and actually execute. Though each of the companies distributed press releases touting their achievements, this was only an alternative to offline concerts and a decline in sales was unavoidable".

Even BTS, who so far has shown the best result of online concerts for Kpop, is not hitting numbers they would if they were actually on tour. They were able to generate 20M from the above online concert.[x] Yet, BTS world wide gross of their Love Yourself Tour that ended in 2019 with 1M+ in attendance generated $71M+. Plus, the extension stadium tour had an attendance of 976K+ generated  $115M+. [x]

On top of not as many fans attending a online concerts ticket prices are lower. Companies can charge more for in-person concerts.

"Ticket prices for online concerts are approximately 20-30% of offline concert ticket prices. Of course, it does have an advantage of accommodating more people at once, but in the case of offline concerts, considering how the sales of goods (merchandise) at the venues are enormous, it is expected that the revenues would drop."

People don't tend realize how much money is generated from concert merchandise. While companies can still try to offer merch for online concerts. It's still not going to be the same.

 

Edited January 16, 2021 by satoori

[satoori]

1 minute ago, CandyCane23049 said:

I don't know if it's true yet, so we'll see on the 19th but apparently GOT7 can keep using the name.

Also, I don't think it will decrease for GOT7 because it's what fans wanted as well. It's a deep seated hated within the fandom for JYPE and it was more celebration than sadness for them leaving JYPE. Also, GOT7 has been active than they've ever been with fans since leaving JYPE. Just now Jaebeom has opened up a Twitter account, it's basically a members interacting with fans since the news.

Being able to use their name doesn't mean JYPE can't ask for "fair price" , every time they use the since JYP owns the trademark. Expensive af. And JYP have the right refuse certain activities. for example: "Apparently SM has refused to allow HOT to promote as HOT, so for their reunion concert, they couldn’t use HOT in anything."

H.O.T. Unable To Use Their Group Name And Logo For Concert Promotions
https://www.soompi.com/article/1228189wpp/h-o-t-unable-use-group-name-logo-concert-promotions

Fans always want the best even with past groups that have separated. Yet group activities inevitably decrease once members leave a company. Of course we shall see how things will work out with Got7. But...i'm keeping my expectations low (((

[satoori]

4 minutes ago, JamiesGirl said:

okay, I did not know that, mainly because I don't really belong to any huge fandoms. the concert merchandise thing too because I don't buy concert merchandise? thanks a lot for the information

It's okay lol^^.. Honestly, in a ideal world your comment would be how things would work. But unfortunately it's simply not the case.

Of course, no problem! 

[satoori]

8 minutes ago, JamiesGirl said:

for the comparison with the online concerts, I'm not really sure if that can be compared? The tours you were referring to were consisting of more than one concert/venue, right?

with an online concerts, it's not expected for companies to have the same amount of dates as if it was an in-person concert. 

[satoori]

8 minutes ago, CandyCane23049 said:

They already decreased within the company,  how much worse can it get?  They let them promote 2 weeks with Not by the Moon and then 7 months of silence that the members even felt uneasy about. After seven months of silence, they then promote for 1 week. 

1 or 2 members were still willing to re-sign and JYPE turned it down because they wanted the whole group and as a group I wouldn't want to re-sign with JYPE either. They stifled their creativity,  they wouldn't let do things like have a YouTube channel, they wouldn't let them go on variety shows when they would get invites,  etc..

Touring is part of activities too -- which was cut due to covid. Nonetheless, activities will probably decrease even more with time. Basically almost nothing annually as a group. 

Yea it makes sense JYPE would want the entire group.

No one here is denying JYPE had it problems. The point is things become a lot harder when members leave a company.

Again, we shall see tho. Anything is possible. Right now information is being presented base on the past.

Edited January 16, 2021 by satoori

[satoori]

18 minutes ago, CandyCane23049 said:

Fans aren't expecting things like that either just them making music once a year is quite enough we're aren't expecting 2-3 comebacks with big lavish tours like before. 

BamBam can still hold his solo tours, if Jus2 are together on AOMG then they can continue together, etc... Members had solo things as well that did well and sold out. 

I'm not expecting more definite news until after the 20th when their contract fully ends on the 19th.

The article didn't discuss what fans are expecting...it simply stated that activities will perhaps decrease as a group (not talking about solo stuff) - which tends to happen when groups leave a company.

 

 

Edited January 16, 2021 by satoori

[satoori]

14 minutes ago, BAZISSINO said:

Highlight decided to stay together have created their own company minus Hyunseung 

OT: Junhyung left the group due to the scandal. However not sure if he's still part of the company stuff

[satoori]

1 hour ago, taeny2wenrene said:

I am not an expert about this and I would love to read good journal articles on K-pop as an industry. So feel free to suggest me some.

Here are some of my uneducated opinions on it:

K-pop is a highly competitive industry and market. I don't believe it is sustainable. Marketing people as products is a tricky business especially when those people give so much of their time and life constantly. And the target audience being generally a small portion of age groups wouldn't help either. Fame of K-pop grows globally and industry aligns its output according to demand. However, even if the whole world knows about K-pop, there are limits to its growth. I don't know how much more it will grow before it somehow collapses. Also, it seems like an example of modern slavery to me. But again, I am not an expert.

Glad you enjoyed the article! I was vibing with everything till the last part tho^^

1. This isn't the first time I've heard an ifan make this claim. For some ifans, it seems to root from a place of gradual dis-interest in Kpop and or find the industry problematic. However the Kpop indusrty fully collapsing seems unlikely. It's simply music. Specifically pop music from a foreign country. Unless Korea is wiped off the planet, their music isn't going anywhere. Koreans will continue to listen to their own music. Perhaps in the future will there be a decline mainstream in Kpop's popularity in the West and or non-Korean countries? Maybe. But I feel there will still be a popular niche. Similar to how other forms of foreign entertainment (Latin music, Bollywood, Anime, or etc.) has penetrated different countries. In general, as far as Korea itself is concern, rather then collapse, their music [pop] industry will continue to change and evolve. 

2. Debatable. While it's true things are far from perfect, I personally wouldn't call it modern day slavery. Nowadays conditions are a lot better then the past. Also each company and idol is different. So it's a case by case situation.

Edited January 18, 2021 by satoori
words.

[satoori]

16 minutes ago, taeny2wenrene said:

Yes you are right. I have my biases due to my disappointment with the industry and it may have forged me into a wishful thinking of the industry getting terminated. It is simply pop music of a country. Evolution of the systems is the key, nothing ever just disappears but evolves.  Thank you for your answer, it brought me my daily mind refreshment against tunnel vision resulting from disappointment. 

No problem!