When YG Entertainment, one of Korea’s dominant entertainment companies, calculated its 2011 profits, its business strategy was confirmed a success ― domestic and overseas concert revenue accounted for 22.3 percent of its total revenue, a jump of 46 percent over the course of one year.

With continued piracy issues and low margins of the local digital music market, the Korean music industry is shifting its focus to live concerts. According to industry experts, the Korean concert market was around 150 billion won ($131.7 million) in 2011, and is showing consistent growth: Tickets and merchandise sales are hitting record highs, and domestic entertainment companies are increasingly looking to showcase their artists overseas.

“In the past, most of the money in the music industry came from album sales, but now, selling music is far from being lucrative,” says an industry insider who wished to remain anonymous. “These days, in Korea particularly, consumers expect music to basically be free. So now, having a hit song is more of a calling card rather than a money-making endeavor. After you have your name made with a popular song, the money comes from endorsement deals, and then from concert tickets and merchandising.”

Big business

Last year also saw CJ E&M, the entertainment arm of the Korean conglomerate CJ Group, launch its global K-pop concert brand “M-Live” in November. South Korea’s largest media company invested 10 billion won into the business, and is attempting to transform the concert industry in the region by tapping into its parent conglomerate’s previously established global resources. 

With the launch of the new brand, CJ E&M reported that they had doubled their revenue from concerts in 2011. The company’s biggest live music event, the Jisan Valley Rock Festival, recorded a 1.1 billion won increase in revenue from the previous year.

“With more value being placed on live performances, there is a strong demonstrated need for concerts,” says Ahn Suk-jun, head of music business at CJ E&M. “The market will continue to expand consistently, but will take on many new and varied forms. More collaboration, more festivals.”

Ahn says the rapid growth of the domestic concert industry is due in part to the recent flush of competition-based television programs such as “I Am a Singer” and “Superstar K.”

“These shows have launched a slew of singers who have been proven to be great live performers,” says Ahn. “Concerts used to be year-end events in Korea, but with these performers putting on concerts throughout the year, that perception has now been shattered.”

This year, M-Live is handling 200 performances, including 2PM’s Asia tour, Cube Entertainment’s Brazil concert and Jungle Entertainment’s LA concert.

Korea’s appetite for concerts is also why more global pop acts are flying in for performances. The likes of Lady Gaga, Maroon 5, LMFAO, Far East Movement and John Legend have recently put on sold-out shows in South Korea. Jason Mraz performed in June.

Korean entertainment companies and agencies are also being ambitiously global in their own business collaborations.

K-pop goes global

YG Entertainment’s boy band Big Bang’s first world tour this year is being held through global promoter Live Nation, the world’s largest concert promoter of tours such as those of Madonna, Jay-Z and U2.

Big Bang’s “Big Show” tour kicked off on March 2, and the group is slated to perform in 25 cities in 16 countries throughout the rest of the year. 

In addition to the larger scale, the artistic direction is also different from the group’s previous tours. Laurieann Gibson, who is known for orchestrating Lady Gaga’s spectacular productions, is undertaking the creative direction for this year’s series of shows.

“When we signed with Live Nation, they showed us a list of producers and directors, and the decision was made to go with Laurieann to try something new,” says YG Entertainment’s public relations team leader Hwang Min-hee. “In the past, Big Bang’s concerts were more interactive with the audience, but now more emphasis is being placed on performance,” says Hwang.

Despite the burgeoning business, some industry insiders say that the boom may be a bubble.

“It seems like everyone is being swept up by the massive popularity that concerts have right now,” says concert producer Randy Noh.

Noh runs Show Director, a production company that has put on concerts for famous singers Rain and Insooni. “But the concern is that the popularity is not sustainable.”

Too soon?

While local media has been continually reporting on the success of K-pop overseas, Noh says that the popularity relies heavily on the “exclusivity and mysteriousness” of the K-pop artists, and that increased frequent access to the performances by the artists overseas may actually hurt their draw in the long run.

“The quality of the concerts is also a concern ― a lot of idol groups put on concerts when they’re not ready,” says Noh.

In the past, artists needed to have at least three or four years of performing experience and a solid body of well-known work, but now, recently debuted K-pop idols are putting concerts without the necessary experience or repertoire.

“The guarantees for the artists are also too high, considering the quality of their performance ― most idols are commanding higher guarantees for concerts than U.S. artists ranked about 10-20 on the Billboard charts,” says Noh. “I think people are not thinking in the long term and are being blindsided by the popularity of the moment.”

Others predict that the boom is only just the beginning.

“The value of live concerts is only going to increase, with audiences wanting to experience more and more special performances,” says Ahn. “That’s the strength of our business ― even if the artists who are performing are always different, the concert brand will remain and expand. There are just so many opportunities for new businesses to develop naturally.” 

(Yonhap News)