Korea’s New Focus

The South Korean music industry’s strategy of shifting its focus from digital music sales to concerts has so far proven successful, says the Yonhap news agency.

South Korea’s dominant entertainment company, YG Entertainment, saw a 46 percent increase in revenues for its domestic and overseas concert business in 2011, accounting for 22.3 percent of its overall sales.

In all, the Korean concert market amounted to about 150 billion won ($131.7 million) in 2011, a new record, and all signs seems to point to an even greater increase in 2012. In addition, more entertainment companies are focusing resources on showcasing their artists overseas with concert tours.

An anonymous insider told Yonhap that the music industry has basically owned up to the reality that Korean consumers think recorded music should be free.

“That means a hit song is more of a calling-card than a money-making endeavor,” he said, so agencies make their money on endorsements, merchandising and concerts.

Last year, another entertainment company, CJ E&M, launched the global K-Pop brand M-Live with a 10 million won investment.

The intention is to “transform” the concert industry in the Asian region by forming more collaborations and holding more festivals. The company will tie into television music competition programs, launching new discoveries with tours carried out year round. Traditionally in Korea, concerts were mainly year-end events. In 2012 alone M-Live has 200 concerts planned.

Yonhap also cautioned that the perceived boom could turn into a bubble. One local promoter believes the large entertainment companies may be moving too fast too soon.

The reason local superstars like Rain could maintain their popularity and, therefore, their huge concert fees is because they didn’t perform much and there wasn’t much competition.

Now, it seems, every major K-Pop act will be on tour continuously. The insider also thinks fees are starting out way too high. In many cases, K-Pop guarantees are even higher than those for top-shelf foreign acts.