In the world of K-pop, tattle about the latest scandal or rumour involving a Korean pop star is not just light entertainment — it’s market-moving information. Even the smallest details of a star’s personal life can affect share prices of South Korean entertainment companies. Yet, there is a risk greater than celebrity drama: political tensions.
For K-pop entertainment companies, fandom has become as valuable as album sales and streaming revenue. K-pop groups make their fortune through a combination of concerts, brand endorsements, merchandise sales and sponsorships, which account for about three-quarters of total revenue. All this is fuelled by fan engagement.
This model relies on scale. The larger the fan base, the more opportunities for revenue generation. K-pop’s biggest constraint, at present, is the size of its home market.