BTS was just plain unsustainable

Kim Won-bae
The author is an economic and industry news director of the JoongAng Ilbo.

It deserves to be called the BTS shock. The K-pop band announced a temporary suspension of its group activity last week. The band has sold countless records, dominated the Billboard chart, been nominated for Grammy awards and even been invited to the White House by President Joe Biden. It gave a speech at the United Nations. Not too shabby. It can hardly be considered surprising that BTS wants a break, or that its members want to devote their time to performing on their own. HYBE, which runs BTS, claims the band will still perform as a team. But global fans are starting to come to the realization that something has changed, probably forever.

After the bombshell announcement by BTS, the stock price of HYBE plunged by 25 percent on Wednesday and its market capitalization decreased by a whopping 2 trillion won ($1.54 billion) overnight. Despite a rebound the following day, the stock prices of HYBE plummeted by more than 60 percent compared to November 2021.

In a one-hour YouTube video released on Tuesday, members of the band exposed the pain its members have suffered so far. The remarks it leader RM made were shocking. “The K-pop idol system does not let group members mature,” he said. “We have no time for growth on the individual level.” His comments reflected the so-called “factory system” of talent agencies in the entertainment industry. As RM’s confession suggested, K-pop is not a genre of music but a by-product of highly-sophisticated production system.

A talent agency gets songs from renowned songwriters from across the world, choreographs and films a performance of the song, and embarks on marketing the whole package globally. After going through hard training, members of K-pop bands live together even after their debuts. They work tirelessly to communicate with a global audience and create a consolidated fandom. In return, those fans buy their albums en masse, attend their concerts, and give huge profits to their talent agency.

Under such circumstances, the fact that Korea’s most successful band declared a suspension of their activity at the height of its success raises suspicion about the way they have been treated. BTS has consistently sent the message, “You should love yourself first.” It seems to be taking that advice seriously now. Fans will surely miss the band, but it does not necessarily mean the end of the group. The band says its members will continue performing as individuals.

But HYBE, a listed company, cannot feel at ease, as any lull in the activities of its most profitable asset will deal a critical blow to its top and bottom lines. BTS members could find a way to perform on individual levels. Whatever their plans, any change will be traumatic for HYBE.

The company earned record profits last year, but its flagship act was pushed to its mental limits. That raises questions about HYBE’s ability to manage any kind of crisis. Despite its promise to create another promising boy band, who can believe it will be as successful as BTS?

Conventional approaches are not likely to create another BTS. The dismal plunge of HYBE’s stock could signify a stark reality our economy faces: a serious lack of growth engines for the future. There are countless cases of local companies that declined after failing to meet demand from markets.

Samsung Electronics, an icon of Korean manufacturing, raked in record profits last year, but its stock continues to drop. Samsung has a tough contest with its rival Taiwan Semiconductor Manufacturing Company (TSMC) in the foundry business largely due to a lack of qualified manpower needed to upgrade its fab capabilities.

Success calls for a long period of accumulation. But after passing a certain level, you must change your strategy. Replacing an old members with new ones cannot work for K-pop bands anymore. In other words, forcing a seven-member boy band to live under the same roof to help perfect their performances simply cannot be sustained.

We must find a breakthrough in different ways. The government and National Assembly must create an environment where creative people and challenging enterprises can open a new future, along with concurrent changes in our social systems.

On Thursday, the Yoon Suk-yeol administration announced a new direction for economic policy focused on reforming five major categories — the public sector, labor, education, finance and services — to help spur the country’s growth potential over the long haul.

But the road to bold reforms will certainly be bumpy as they demand revisions of a plethora of laws by a legislature dominated by the Democratic Party. The election-free next two years could be a golden time for reforms, but confrontation between the two major parties is inevitable. The new administration must weather such obstacles wisely. President Yoon’s leadership will be tested in an uphill battle with the party holding a super-majority in the legislature.