Arama They Didn't

11:58 am - 05/12/2012

80% of K-Pop’s sales come from Japan

In Korea, a problem has arisen regarding the business of hallyu. Although the country’s reach has has expanded across the globe, profits of the Korean Wave still remain 99% in Asia, and profits even in Korea do not reach high to that extent. Already, there are estimates that the influence of hallyu will end in roughly 5 years, and currently Korea’s “national prestige” is standing at a crossroad.

“3 Times the Olympics”

In March, Korea’s Economic newspaper published a report about how Korea’s hallyu wave effects it’s economy. Factoring in exports like music and dramas, in 2003 profits were 86 million dollars, but jumped to a staggering 220 million dollars in 2008. For K-Pop between 2007 and 2010, it has risen from 189 million dollars to 313 million dollars.

This has had a ripple effect on all of Korea’s industries, crossing over entertainment and culture. In 2012, it’s estimated the car industry brought a result of a 2.7 trillion won increase (about 190 billion yen), and broad industries like games, food, tourism, consumer electronics are seeing an increase in about 12 trillion won. At this rate, it’s estimated that all these industries will rise to 19.8 trillion won in 2015, and 57 trillion won in 2020.

License Barriers

On that note, the problem arises with the high degree of dependence the Korean Wave has on Japan. Although K-Pop has mainlined to the point where concerts are now held in the West, Asia accounts for 99% of K-Pop’s sales, with Japan taking up 80% of it.

According to the Korean Economic Newspaper, when calculating the revenue of the 5-member idol group KARA’s activity in Japan, including character goods and performances, 84% of it is given to the Japanese distributors, a remaining 8% left to Japanese promoters. The final left-over profits for KARA’s entertainment agency is only an 8%, an amount said not be close to enough money.

Oingyu, head of the Hallyu Research Center in Daejeon, Korea points out the main problem hallyu holds is that it is “attaching too much onto Japan” and it’s ongoing “revenue imbalance”. Regarding that circumstance, although Japan is K-Pop’s biggest market in the world, Korean industry cannot directly sell in Japan due to “licensing agreements”.

In Korea, recognition of the revenue imbalance is gaining strength, and although Korea is directly tied up with Japan in the telecommunications industry, and are attempting to find a way around online music selling, the view that it’s “impossible to operate in Japan but ignore Japan’s entertainment distribution network,” as stated by Korean company promoters, has become a popular view.

The final blow to all of this is a poll taken in by economic newspaper. This February, the paper asked 1,200 people made up of Chinese, Japanese, and Taiwanese people questions regarding hallyu. 62% of people believed hallyu would end withing 5 years, and 18% believed hallyu is already ending. Combined, 80% already have negative outlooks on the future of hallyu.

Although Korea wants to break away from Japan’s market as being K-Pop’s singular dependence, if it leaves business will almost cease to exist. It seems even hallyu itself is bringing about a dilemma in Korea.

Translated by: omoxi
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karavanuemura 12th-May-2012 06:16 am (UTC)
Hmmm. . .one reason, why even rookies in Kpop are flying to Japan.

Edited at 2012-05-12 06:19 am (UTC)
tabbytabitha 12th-May-2012 06:18 am (UTC)
how ridiculous.
chizzyrei 12th-May-2012 06:18 am (UTC)
so they mean, a chunk of the expenses and profits go to the Japanese distributors?
vilain_garcon 12th-May-2012 06:24 am (UTC)
oh bsit omg
quietspeaker2 12th-May-2012 06:34 am (UTC)
damn 80%.... thats a lot
love323able 12th-May-2012 06:53 am (UTC)
I think it's starting to end, this year we will probably see who stays and who goes~ I'll be impressed if next year is still filled with kpop
kamelover101 12th-May-2012 07:27 am (UTC)
this tbqh. hallyu wave is really ruining it by themselvs by debuting 74386938793 groups everyday, doing crappy remakes, and making it seem like the kpop industry is taking over everyone and anyone.

i predict only kara and tvxq will triumph the battle, with snsd garnering casual interest.

groups like shinee, 2pm, super junior, rainbow, t-ara will resign themselves to 50-100k sales, and the rest will disappear.
yuma_daisuki 12th-May-2012 06:55 am (UTC)
No wonder the companies are all debuting their groups in Japan~~
asaphira_sachi 12th-May-2012 07:06 am (UTC)
Not too surprising.
kamelover101 12th-May-2012 07:21 am (UTC)
this should be an eyeopener for black jacks and yg stans who say
"japan is only one country anyways, my unnie is popular elsewhere"

also most of the cuts go to the japanese labels so this is more money for japan.
honestly don't care tbqh, but will be using these statistics to troll kpop fans who think japan is nothing srsly.

also i hope 2ch or japanese right wingers dont get a hold of these stats, coz then all hell will break lose tbqh. i hope they realize that its like 90% for the japanese more revenue to build the country.

idk tho tbqh, must admit i am thoroughly sick of all the hallyu wave hype. hope it goes away but tvxq and kara stay..

Edited at 2012-05-12 07:31 am (UTC)
mecha_danger 12th-May-2012 08:36 am (UTC)
Yeah 2NE1 is just not suited for the Japanese market right now, whereas KARA is unique in that they have had more relative success in Japan than in Korea.

And agree 100% on the right-wingers/Japanese netizens point. I'm glad that this post didn't bring up any of that ugly stuff on Arama; I guess people were tired from yesterday.
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convenience93 12th-May-2012 07:52 am (UTC)
True story why everyone wants to make it big in Japan.

Japan has a very receptive and supportive audience.
squallina 12th-May-2012 07:56 am (UTC)
I'm not a Kpop fan, but I was watching a show on these statistics the other day and I felt so sorry for the artists trying so hard to make it big and even when they do, not getting much to live off out of it. :(
kamelover101 12th-May-2012 08:01 am (UTC)

groups like tara are so overworked it sad. they have to practise 24/7 and promote in many different countries :\
quietspeaker2 12th-May-2012 08:44 am (UTC)
just my opinion though...its not that I hate the hallyu wave, but I feel like they over do it. They over promote in japan with remakes after another. Also too many rookie groups debuting in japan, like TOO many! It kind of seem like some are trying to go a cheap way with remakes. I would feel bad for artist that aren't just remaking, if something happens. Getting tired of hallyu wave though.

Edited at 2012-05-12 08:45 am (UTC)
kamelover101 12th-May-2012 09:01 am (UTC)
pretty much this.
aquariia 12th-May-2012 09:09 am (UTC)
Even if you're flopping in Japan it still worth to debut there.
kamelover101 12th-May-2012 09:12 am (UTC)
lol ikr.
aisasami 12th-May-2012 09:28 am (UTC)
BoA will always reign supreme in Korea and Japan...

...but I still see a future in Japan for SNSD, KARA, and After School. The rest can gtfo.
kamelover101 12th-May-2012 09:31 am (UTC)
don't forget the mighty tvxq.

they deserve their success anywhere tbqh.

disagree with after school tho
hazel_darlene 12th-May-2012 11:11 am (UTC)
see kpop fans how important Japan is to your idols... so stop saying bad things abt Japan >__
asth77 12th-May-2012 11:16 am (UTC)
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