K-pop supported disproportionately by groups of core fans

BTS concert in Las Vegas on Jan. 28, 2021 [YONHAP]

The K-pop market is supported by relatively small groups of people that buy, boost and brag, often in a coordinated fashion, in favor of a given group or band.

There are fans. Then there are fandoms.

Their impact is very real, as they can lift album sales — actually CDs — increase streaming numbers, buy out concerts and hoard merchandise. Success is often reserve engineered by loyal hordes picking a benchmark, such as the number of YouTube plays, and then making it happen.

ARMY — not Army or The ARMY, but ARMY, ARMY insists — is the best example, a fandom that sets the standard. Members are exceptionally zealous, to the point of threatening anyone who dares criticize BTS.

One investment firm has done some analysis on fandoms and published some numbers to quantify the phenomenon.

In a report published in January, IBK Securities estimates the number of "core fans" supporting the four major agencies — SM, JYP, YG and HYBE — at 3.5 million. HYBE led, with 1.6 million. SM Entertainment followed with 760,000, JYP Entertainment 640,000 and YG Entertainment 420,000.

BTS has the biggest core fan base, at 700,000. That is followed by NCT (350,000), Seventeen (320,000), Stray Kids (320,000), Blackpink (280,000), Tomorrow X Together (250,000) and EXO (130,000).

Core fans are not like normal fans, who go to the occasional concert and stream a song now and then. Core fans connect on a deeper level and are willing to buy whatever they can get their hands on if it's connect to the band of group.

These core fans purchase an average of seven to eleven albums, with some buying hundreds to boost rankings on the charts. They spend money opening "birthday cafes," on Times Square ads or sponsoring customs plane and train ads praising the artists.

The annual sales contribution per core fan of the four major entertainment companies is estimated to range from 520,000 won ($412) to 1.04 million won.

The size of a core fandom is small compared to the entire global audience for K-pop. According to the Korea Foundation, affiliated with the Ministry of Foreign Affairs, the size of the K-pop “fandustry,” a portmanteau of “fandom” and “industry,” reached 8 trillion won in 2022.

According to Content Industry Statistics published by the Ministry of Culture, Sports and Tourism on Feb. 2, Korea’s content exports reached a record high of $12.45 billion in 2021. Of that, exports of music — led by K-pop — was $775.27 million, also a record-high.

“The absolute value of core fandom is very low,” IBK Securities analyst Lee Hwan-wook explained, “It is expected to grow through various activities and continuous debuts of new K-pop idol groups.”

The growing K-pop core fandom can be seen by the increase in old album sales. Fans snatching up old albums in addition to new albums are considered to be especially devoted.

For BTS, 38 percent of total album sales last year were old albums as people who were not fans before became fans. Back catalog sales might help a band or group even though it is inactive now.

Among the girl groups, Twice and Red Velvet recently experienced a major boost for old album sales, leading to their highest yearly sales in 2022. This helped them break the seven-year curse — a term referring to how many K-pop groups lose popularity or disband altogether around their seventh year in the business.

These zealous fans are changing the business models of K-pop companies. From purchases of albums, concert tickets and merchandise to accessing to premium contents, there are more products being created that cannot be maintained without a fan economy.

Of the revenue sources, paid membership services that allow K-pop stars to directly communicate with their fan bases have risen as the future of K-pop. It is a new business model that emerged in the last two to three years. Weverse by HYBE and Bubble by SM Entertainment are examples.

“There is a time difference between when one falls for an idol and when it leads to an actual consumption,” said Lee Hye-in, an analyst with Yuanta Securities.

“Consumption usually occurs one to two years after joining a fandom,” Lee said. “Light users of K-pop who became fans during the pandemic are now turning into heavy users one after another.”

BY BAE JUNG-WON, SEO JI-EUN [seo.jieun1@joongang.co.kr]