Asian Pop Stars?

Why do Korean Pop Stars always make less money than American Pop Stars?

• You always see American Pop stars like Katy Perry and Justin Bieber living in mansions with multiple sports cars but K-Pop stars living in dorm/apartment rooms that their labels have ...show more

• Answer:

  There are hundreds talent agencies in Seoul. SM and YG earn $150 million last year. GDP of Seoul metropolitan area is #4 in the world after Tokyo metro, New York metro and LA metro. Then why can't K-pop idols earn more money than American pop stars? SM and YG, the largest talent agencies are growing rapidly. It means two years ago the profit they made was half of today. Then how about five years ago? There wasn't even a word "K-pop". First, the difference comes from the difference of scale of market and audience. South Korea is size of Kentucky and its population is 50 million. Excluding North Korea, world Korean speaking population is just 1% of the world while English speaking population is dozen times larger. Thus market for American pop is much larger and profitable. Second, K-pop idols has only been around for 17 years same as South Korea to join the developed world. Korean talent agencies are still young and not experienced and matured as American and J-pop industries. Why idols have to train so much then busy after debut? Korean domestic market is too small to bear a world class company so they target foreign market from the beginning which requires company and singers to have a lot more preparation and language skills than Americans. Besides Koreans prefer buying song files from internet so physical album sales dropped down which is major income for all singers. The singers had to find other ways to make money, such as getting on various TV stages and shows, CF, endorsement, magazines. but holding concert is the largest profit. Then why company and idols aren't rich? A company spend lots of budget for a project group and is sustained by the group's income. SM's SNSD for example SM held global auditions with ten thousand participants and offered free idol boot camp for a hundred talents. about twenty candidates to give free dorms and training. Thus, It cost $3 millions for each SNSD member to debut. A rookie group in the first few years don't make a good profit and not all project groups are commercially successful. In the worst case, if the project fail and disband, the stock value will drop without any repay for the huge spending which damages a company's financial status. With all these risk and spending, company can survive and make profile out of a successful group's income. There will be cost of Song royalty, music video, album production and advertisement so when the agency's revenue is 100, the idol group will receive 35-45 and each member will share them. More members mean smaller shares.