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.

[Green Tea Is Green]

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

[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..

 

[Ghosty]

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*.

[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. 

 

[Ghosty]

1 minute ago, satoori said:

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. 

 

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. 

[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.

 

[oden]

1 hour ago, satoori said:

"so a generational change in 2021 is expected."

as expected o.o

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

 

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 

[hynapia]

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 few 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 low resources unable to make a decent name for themselves.

Edited January 16, 2021 by hynapia

[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

[hynapia]

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.

[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."

 

[kkang yoonie]

1 minute 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.

Beast/Highlight is a really different situation tho, since they all left and formed their own company.

Either way, while the members do want to continue as a group, as the article states JYP has the copyright to the name so if they want to promote as GOT7 then they'll have to do it with JYPs agreement, which seems unlikely with all the videos and articles about how JYP has been mistreating GOT7. If they want to promote as a group under a different name, the logistics are still very difficult since they have to deal with multiple agencies trying to collaborate. With Shinhwa there's a huge brand name of the group itself and the members are usually one of the most recognisable artists in their solo agencies (or it's their own agency) so it's a lot easier.

Just my two thoughts, I'm sorry if this offends somebody, I'm just pessimistic about corporates doing what's best for the fandom.

[hynapia]

2 minutes ago, satoori said:

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."

 

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.

[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.

[WhateverBitch]

I think it's a mix of both oversatured market and the pandemic, most smaller groups survive thanks to fansigns and concerts.

EDIT: I would also add that without fancam there are less chances to go "viral" and to grow their fanbases.

Edited January 16, 2021 by WhateverBitch
Added some stuff

[felidae]

2021 is the changing era... mostly due to miss Rona, no? Groups with small fanbase disappear, everything is online, inactive groups were more inactive it gives proper reason to disband if not because contract. 

But I'm curious if this would change debut groups frequency, bc before this everyone and their neighbors can easily  "debut". Not necessarily to be less, online things are cheaper, I heard.

[reiichi]

1 hour ago, satoori said:

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

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

[Drama Drama Drama]

6 minutes ago, reiichi said:

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

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

[lighterxx]

This writing missed out a section, companies dont earn much from merch, merch goes to idols %95 thats why its advised to buy merch at concert venue, not from internet for kpop

Second thing they missed, there is apparently a new law for trademarked artist names that allows them to continue to use it, same with group names, im unsure about realness of that however, or whether its applicable to got7

[MinnieMax]

I think that In 2021 we will get a part of generation shift - it might change for girlgroups because all big agencies are planning new debuts. A lot will disband or lose momentum or go solo after (companies pushing and promoting new groups and all that)
Generation shift for boygroups will probably come a bit later. 

[Guest]

4 hours ago, satoori said:

About 15 days ago, the girl group Gugudan officially disbanded.

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. 

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

[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