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The Economics of the K-Pop Industry By: Adisri Swain, (Christ University, Bengaluru)
Introduction Ever since Korean Pop (K-Pop) grew in popularity in the 2000s, it has evolved into a 5-billiondollar global industry. HYBE Corporation, formerly known as Big Hit Entertainment ranked number one in business sales in 2018, according to South Korea's Financial Supervisory Service. The sales amounted to over ₩64.1 billion, which is seven times their main competitor— YG Entertainment's sales. HYBE’s value rose over ₩1 Trillion and is expected to grow in value with its ever-growing acquisitions and success. However, HYBE was on the verge of bankruptcy in 2007 and barely managed to survive in the competitive oligopoly market dominated by other recognised entertainment agencies, namely: SM Entertainment, JYP Entertainment, YG Entertainment. Although HYBE had multiple artists under them, it was not until their main band— BTS launched in 2013 that HYBE’s financials flourished. Currently, the founder, Bang Si-Hyuk, is worth $770 million while HYBE Entertainment is worth an estimated $2 billion. By 2019, the company's profit soared 97% from the year prior, hauling in around $57 million in pre-tax income— which made them the 43rd highest-paid entertainers in the Forbes list. Most attribute this growth to the differentiation strategies and positive image HYBE adopted to market BTS to the public. An environment was created for artists at HYBE to have the freedom to write and produce their music with a focus on performance. This was observed in contrast to their competitors who micromanaged every aspect of the artist's lives. While HYBE was still a start-up company, its competitors were established agencies with funds allocated exclusively for influential promotion and marketing. Since it was difficult for HYBE Entertainment to match the same level of media exposure as their competitors, they effectively used social media to adopt an unconventional expansion approach targeting non-price competition.
