cover story Features July 15, 2019

Past The Sheen & Into The Underbelly: A deep dive into the K-pop industry [long read]

Past The Sheen & Into The Underbelly: A deep dive into the K-pop industry [long read]

K-pop is having an international moment right now.

The South Korean genre has long been a cultural phenomenon in Korea but now it’s taking over the world like never before, introducing some of the biggest acts around right now – namely and .

Predominantly birthing popular groups, the country is ploughing into the international market with a different approach to music. The acts are fine-tuned, near-perfect entertainers who have ticks against most of the entertainment industry’s key skills. The fandoms they’ve built are dedicated armies – a social media promotional team like no other, ready to tear down anyone who crosses them.

We may be embracing K-pop, both here in Australia and in other English speaking countries, but understanding how it’s happening is another thing. K-pop’s break into the Western market has been gigantic, one that has catapulted the genre from an insular community to a worldwide force.

This year, The Global Music Report named Korea the sixth biggest music industry, noting that it had shifted from “potential” to “power player”. There was a 17.1% rise in revenue, as its acts continue to break into other markets. The international push is expanding the genre’s revenue at a massive rate too. In 2017, the Korean industry recorded a 45.8% rise in recorded music revenue, the same year BTS landed their first Top 10 album in the US.

K-pop stars from Girls’ Generation to TWICE have long had a cult following in other parts of the world but their popularity has well and truly exploded over the course of the past two years. As this is happening though, an underbelly is being revealed with K-pop being forced to confront some of its deep-rooted problems face on.

So how is K-pop spreading so quickly and what’s lying beneath its shiny facade? 

A Different Industry Structure

The majority of Korea’s major acts are signed to four companies: Big Hit Entertainment, SM Entertainment, JYP Entertainment and YG Entertainment. What differentiates these companies to the labels we have here is they discover, sign and train the talents in a range of things while also owning the production and publication of the music. Whereas agencies in Australia and the US will jump on board once the act has reached a certain level of popularity, these agencies start grooming stars before they are known by anybody. In 2008, The IFPI spotlighted the rise of all-encompassing 360-degree deals in the industry but in many ways, SM Entertainment has been doing this since its inception in the ‘90s. 

These agencies are not only focused on music. They are essentially creating brands that can sell merchandise, appear on television and promote Korean tourism. And it’s working. According to South Korea’s Financial Supervisory Service, those four companies earned approximately US $1 billion last year. Streaming revenue continues to rise but it’s the prominence of physical music that makes the market so interesting. Acts often release multiple physical formats of an album because it’s a collector’s item rather than a practical purchase. According to the IFPI Global Music Reports 2019, physical music revenue fell by another 10.1% globally, however, South Korea saw a jump of 28.8%. 

These agencies know that K-pop extends far beyond the music and they are consistently offering merchandise and experiences to the fans. SM Entertainment has cafes and merch stores in Seoul, lined with pictures and models of their ‘Idols’, as the stars are referred to. You can also eat treats featuring lyrics by their artists and drop cash on a huge array of physical products. YG Entertainment also has restaurants on top of golf academies, a fashion brand, a cosmetics brand and even an in-house modelling agency. 

Mobile is also becoming a very important part of the K-Pop market. Just last month, BTS launched their first mobile game BTS World which debuted alongside a soundtrack featuring Charli XCX, Zara Larsson and Juice WRLD. It’s the first move following South Korean mobile giant Netmarble’s acquisition of almost a quarter of BTS’ agency Big Hit Entertainment for $190 million. They are now Big Hit’s second-largest shareholder. Meanwhile, SK Telecom has partnered with SM Entertainment to work to introduce Artificial Intelligence technology into K-Pop. It’s the same telecom company that teamed with SM, Big Hit and JYP to develop a music sales platform to rival existing streaming platforms. 

It’s not just telecoms that are getting in on the action. In 2016, Alibaba bought around $30 million worth of SM shares with plans to use K-pop acts to help launch and promote its music division Ali Music. In 2014, Louis Vuitton’s private equity arm, LVMH announced it was investing $80 million into YG Entertainment, assisting the agency’s move into the fashion business. 

From Korea To The West

K-Pop has always had an eye on the West but the expansion has accelerated rapidly over the past two years. Beyond the very visible success of BTS and BLACKPINK, SM Entertainment, home to Red Velvet and Girls’ Generation, made 50% of its revenue abroad in 2017. 

The export process is one that initially started in the late ‘90s when SM Entertainment noticed the popularity of their act H.O.T. in China. CedarBough Saeji, an Asian Studies professor at the University of British Columbia, says that while K-pop wasn’t made for non-Korean audiences originally, that quickly changed.

“Companies realized that the capacity to earn money from outside Korea was high, even higher than inside Korea due to the limits imposed by a population of only 50 million,” she says. 

Since then, K-Pop agencies have tapped Western producers to produce for their acts and increase their appeal despite largely still singing in Korean. It has been estimated that 80% of K-pop songs recorded for major agencies are written by songwriters based in the US or Europe (most often in Sweden). Additionally, many members of K-pop bands are from outside Korea. Talent agencies are looking further afield for acts to train up. BLACKPINK, for example, includes members from Australia and Thailand.

While acts like BTS are taking global K-pop visibility to new heights, other acts have been chipping away at the international market for years. 

“All the attempts in the past by Wonder Girls, Se7en, Rain, Girls’ Generation, BoA and more… laid the groundwork,” Saeji says. 

2019 has already been one of its most successful years to date, particularly in the US. BLACKPINK became the first female K-pop group to play Coachella while also claiming the biggest music video debut in YouTube history with 56.7 million views. Meanwhile, BTS grabbed their third number one on the Billboard 200 and achieved the highest ever debut for a K-pop group in the US with the Halsey-featuring ‘Boy With Luv’, which also pipped BLACKPINK’s prior YouTube record. They are now the second most-streamed group on Spotify. To put into perspective how popular they are out of Korea, Spotify doesn’t exist there. 

South Koreans refer to the global spread of its art as Hallyu – a Korean term meaning ‘Korean Wave’. A severe financial crisis in the late ‘90s led to President Kim Dae-jung completely redesigning South Korean pop culture. He hired a PR firm to change the country’s image, placing entertainment at the forefront. In 1999, the cultural budget was increased by six times the original amount and by the following year, the government was spending $1 billion on the cultural sector. A Ministry of Culture was formed with a specific K-pop department.

“It turns out that the Korean government treats its K-pop industry the way that the American government treats its automobile and banking industry,” K-Pop author Euny Hong told NPR.

In 2005, YouTube launched and South Korea was one of the first markets to adopt the idea of uploading music for free on the platform. In 2006, the country became the first music market to make over half of its revenue through digital music. It also helped open K-pop up to a global fanbase that has become one of the strongest and most relentless on social media. Nowadays, the stats prove K-pop fans outrank all other on social media. Last month, BTS logged their 130th consecutive week at number one on Billboard’s Social 50, a chart ranking the most popular artists on social media through mentions. At the time of writing, K-pop acts occupy 5 spots in the top 10 with BLACKPINK, EXO, NCT 127 and GOT 7 joining BTS.

While radio is yet fully to embrace K-pop, mainstream media has been observant. BTS has appeared on Saturday Night Live and had a heavy presence at the Billboard Music Awards and the Grammys. BLACKPINK meanwhile completed a successful US press run earlier this year appearing on Good Morning America and The Late Show With Stephen Colbert. 

K-pop has often looked abroad for producers but the collaboration with the West has become even more explicit recently. BLACKPINK teamed with Dua Lipa, BTS have worked with Halsey, Charli XCX and Nicki Minaj while G-Dragon has collided with Diplo, Skrillex and Missy Elliott. While the genre’s success is exploding now, some may have predicted it happening earlier off the back of Psy’s ‘Gangnam Style’ the 2012 global #1. Two years later he followed that up with a Snoop Dogg collaboration ‘Hangover’ that fell on deaf ears globally. In stark comparison, BTS’ collaboration with Halsey scored them their first US Top 10.

Becoming The Perfect Idol

Looking at how artists go from a regular person to a Korean superstar is one of the defining characteristics of the industry. In 2015, Reuters reported that 21% of Korean pre-teens had aspirations of becoming a K-pop idol. It’s rare that people will be spotted busking and be asked to join a group. Becoming a K-pop star is a lengthy task that begins with being signed to an agency. 

K-pop aspirants can train at a number of schools, known as K-pop Cram Schools. At Seoul’s Def Dance Skool, the number of students increased from 400 in 2006 to 1,000 in 2013. The cost of training varies but The Guardian reported that one training school, Acopia, was charging up to $3,000 a month for training and board which is not unusual.

From there, the chances of being signed to an agency aren’t high. Kim Min-seok, a former YG Entertainment trainer, told Vice that of his 200 students, only 15 are generally signed. Successful signees were once locked into lengthy contracts but in 2008, South Korea’s Fair Trade Commission ruled that aspirants can only sign a 7-year contract after boyband TVXQ took SM Entertainment to court claiming their 13-year-contract was restrictive and reportedly earned them very little profit.

The training may seem intense and unusual to Western audiences but this kind of training is not confined to the industry. In her book The Birth Of Korean Cool, author Euny Hong noted that K-Pop training was reminiscent of general student life in Korea rather than an anomaly. 

It’s deep-rooted in Korean culture according to Jose Wendell Capilli, a Professor of creative writing and comparative literature at the University of the Philippines.

“Traditional Korean culture has deep Confucian influences that came in through China, dating back to hundreds of years ago. The strenuous training can be attributed to this fact,” he says. 

That’s not to say that the treatment of K-pop stars hasn’t been immune to criticism by those within the industry. 

Former K-pop artist Prince Mak of group JJCC released a YouTube video last year explaining the financial burden of being signed to an agency. His group debuted in 2012 but they didn’t start turning a profit until 2015 because of a ‘break-even’ contract. This means that they must pay back the money invested in their training before they can start earning money themselves. Mak says that an average K-pop group earns $4,000 per show with 90% of that going directly to the agency. The remaining 10% is split between the members, most of which will be sent to the agency until their debt has been paid back. 

Before releasing music is even in sight, however, the burgeoning ‘idols’ are trained for several years. That includes voice-dance coordination lessons, physique training and even appearance alterations. 

“Less than perfect appearance can be fixed with exercise, diet, and plastic surgery,” Professor Saeji says.

This is not necessarily confined to K-pop as it’s reminiscent of a country-wide “drive to look good.”

“People see plastic surgery (when necessary) as normalizing your appearance not to bother those nearby.”

K-pop rapper Jessi is one of the few Idols that have publicly come out against the procedure. In 2015, she admitted that she underwent surgery but not because it was her choice to do so.

“I didn’t do it because I wanted to,” she told television program Happy Together 3.

“I chose to do plastic surgery because of my agency’s advice and to appear more photogenic.”

Agencies expect that their acts will not get into relationships with the opposite sex with some even imposing a dating ban. Idols in bands also have to be careful to keep the reputation of their act neutral by not expressing personal preferences.

While there is no imposed silence regarding coming out as queer, Saeji says, “It would be very hard to come out.”

“A member of a group would really hurt their entire group, so only a solo artist really could come out without hurting friends, and even in that case it would have big implications for the entertainment agency representing that artist,” she says.

Recently, the industry has been forced to face the reality of imposed perfection. In 2017, SHINee singer Kim Jong-hyun (known as Jonghyun) committed suicide and left behind him a tragic note that gave an insight into the dark side of the K-pop world. 

The note was posted by his close friend Nine9 from Dear Cloud and read, “The life of fame was not for me.

“Why did I choose this life? It’s a funny thing. It’s a miracle that I lasted this long… Just tell me I did well. Tell me that this is enough. Tell me I worked hard.”

BTS were one of the influential groups who responded to the news calling for more compassion in the industry.

Suga said, “I hope we can create an environment where we can ask for help, and say things are hard when they’re hard, and say that we miss someone when we miss them.”

The Underbelly

The K-pop community is currently being rocked by a scandal that has continued to unravel over the past six months or so. Lee Seung-hyun, known best by Seungri, was part of boyband BIGBANG and an owner of a strip club called Burning Sun, among other things. The club opened in 2018 but by this year it was already embroiled in controversy with the venue accused of everything from tax evasion to drug distribution and prostitution.

It began to unravel in January of this year when South Korea’s MBC News Desk reported that CCTV footage had allegedly shown staff beating a man who goes by the name of “Mr. Kim”. At Kim’s request, South Korean officials investigated and the club was shut down, leading a snowball effect of allegations. Seungri and his partners were allegedly under investigation for distributing drugs.

Text messages from Korean app KakaoTalk reportedly unearthed by a technician in February revealed that Seungri had plans to bribe foreign investors with prostitutes. He was charged for this but it ran even deeper. Another group chat allegedly housing eight other members of the K-pop industry sharing sexual videos of their pursuits with other women. The chat, which also featured jokes about rape, included several big K-pop artists namely Jung Joon-young of Drug Restaurant and Choi Jong-hoon of FT Island. A woman, who was featured in the messages, later testified and said she believes she was sexually assaulted by five of the members in the group.

While the investigation was still going, Seungri announced he was leaving influential agency YG Entertainment, who are home to BIGBANG, and retiring from music. YG, however, said the messages were fabricated despite Jung Joon-young admitting to filming women without consent. He was arrested while South Korean police reportedly requested a warrant to arrest Seungri for allegedly distributing illicit footage, tax evasion, and embezzlement. The investigation is ongoing but it’s sending ripples across the industry.

The fallout has continued with the co-founder of YG Entertainment Yang Hyun-suk standing down after he was accused of soliciting prostitution for business partners and also covering up the drug use of iKon member B.I. who was accused of purchasing LSD in 2016. Yang has denied all the accusations. 

The news has seen stocks plummet with the LA Times reporting that five major K-Pop firms have lost 18% of their value since the news broke. 

Saeji believes that the scandal may be more shocking to the rest of the world than it is to South Korea. 

The alleged behaviour of Seungri and his peers is reminiscent of ingrained misogyny in the industry and in the country. 

“K-pop needs to move beyond some very unhealthy gender representations, much of which is driven by Korean blindness to a pervasive culture of sexual objectification,” she says.

If there’s any good to come from the Burning Scandal, it’s a wake-up call to the industry to examine the expectation that is placed on its ‘idols’. 

“Perhaps as the scandal damages the myth of perfection this could create more realistic expectations of K-pop idols,” Saeji says.

The Burning Sun scandal is far from over and it’s all happening in the midst of an international K-pop revolution. Whether it will hurt its reputation globally remains to be seen. For now, the genre continues to surge again, making waves in the commercial Western market like we’ve never seen before. 

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