On January 12, 2016 KpopHerald published three stories that made me think, and scratch my head. The first was about Stellar‘s teaser pictures, the second about the acquisition of Leon Entertainment by Kakao, and the third was about the declining profits in the Kpop agencies.

kakao leon

The first story was with regards to the Lolita images from Stellar’s latest teaser, that quite honestly are very suggestive and sensually provocative. The article criticized the photographer who is known for this kind of work.

The public is divided about his work. Some have expressed satisfaction at the high level of photography, while others commented that they feel offended. Also, worries have risen that the mass media portray of such concept as sexy or appealing…

The second article addressed the acquisition of Leon Entertainment by Kakao, and pointed out that CJ E&M Entertainment also recently acquired Jay Park’s AOMG and Culturedepot, which is home to top actress Jun Ji-hyun, and Hwa and Dam Pictures. The article attributed it to capital inflows into the K-pop industry.

However, it’s possible that this is instead a consolidation, which would indicate that Kpop companies are increasing finding it difficult to make money at comfortable (not necessarily sustainable) levels.

With capital inflow surging in the industry, some experts have raised concerns about their possible monopolistic practices in the market.

The final article addressed the sharp drop in growth sales of the major Kpop agencies, with SM Entertainment‘s annual sales growth reported as 9 percent in the last two years, compared to more than 36.1 percent for the seven years before that. And, YG Entertainment with a 21.1 percent growth in sales from 2012 to 2014, compared to an average annual growth of 56.1 percent from 2007 to 2012.

Now, there may be a sharp drop in sales, but even at 9 percent SM entertainment is still a sustainable and viable company. Also, YG Entertainment going from 56 to 21 percent, just means they were basically doing arbitrage – making a ton of money on their investment. If anything, it just means the industry is maturing and becoming more competitive.

Labels, struggling from their main entertainment businesses, have recently expanded into new businesses including contents production, cosmetics and fashion business.

The article also addressed the fact that the average idol’s annual wage has doubled from about 26 million Won in 2010 to 55 million Won ($45,400) in 2014, due to increased popularity in Asia especially including China and Japan.

Regardless, $50,000 is not a lot of money in the United States. However, the tax system in Korea may be more lenient so the idols get to keep much more of their money. Another consideration is that the standard of living in Korea is cheaper than the United States, and the agency absorbs a lot of the cost of living for the idols such as housing. So, basically $50,000 in Korea may be more comparable to $80,000 in the United States for Kpop idols.

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