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COUNTRYPROFILE19.02.21

MARKET PROFILE

THE SOUTH KOREAN MUSIC INDUSTRY looks set to record another year of growth when 2020’s year-end figures are totted up, with devoted K-Pop fans reacting to the shut down of the live music industry by buying and streaming more of their idols’ music.

The Gaon Chart, produced by the Korea Music Content Association and sponsored by South Korea’s Ministry of Culture, Sports and Tourism, reported a 40% rise in album sales in the first half of 2020, with the country’s top 400 albums selling 18.08 million copies (including exports). This was up 40% on the first half of 2019 and the highest figure recorded at this stage since Gaon started compiling charts in 2010.

Kim Jin-woo, chief researcher at Gaon, told The Korea Herald, that the cancellation

of concerts and fan meet ups due to the pandemic “seems to have aided K-Pop album sales because the fans didn’t have any other choice”. “Buying albums was the only way to show support for a while,” he added. Encouragingly, the second half of 2020 was expected to be equally strong - if not stronger - than the first, thanks to new releases from local superstar acts like BLACKPINK, NCT and Seventeen.

When the year’s final figures are released, it will be fascinating to see the break down between physical and digital sales. According to one local source, citing IFPI figures, 2019 saw revenue from physical music drop for the first time in four years in South Korea, down 6.0%, even as overall recorded music income increased 8.2%. You might expect the pandemic to further slow physical sales, as it

Population... 51.7m

GDP (purchasing power parity)... $2.2 trillion

GDP per capita (PPP)... $28,941

Mobile/cell phone subscriptions... 69.4m

Smartphone users... 48.9m

Internet users - total... 49.3m

Broadband connections... 21.3m

Broadband - subscriptions per 100 people... 41

Sources: CIA World Factbook / Statista

South Korea: statistics

has in many countries, due to restrictions on physical retail. But this has not necessarily been the case in South Korea, with some reports claiming that physical music sales actually increased in 2020.

Whatever the case, 2020 looks certain to have been another of digital growth for the South Korean recorded music business, which saw digital revenue increase by more than 60% in 2019. “Music consumption in Korea was growing before the pandemic hit and has continued to grow during it,” says Clayton Jin, CEO, Warner Music Korea.

“As working from home became the norm for many, people spent more time on their computers and mobile devices, driving up consumption. Digital marketing for artists and their songs has taken an even more central role as offline exposure has all but shut down.”

Jin says that K-Pop fans are still devoted to the physical product. “But they’ve also

Music consumption in Korea was growing before the pandemic hit and has continued to grow during it. As working from home became the norm for many, people spent more time on their computers and mobile devices, driving up consumption...”

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South Korea’s music business remains buoyant in 2021, with digital music in

particular on the rise - despite K-Pop fans’ enduring love of physical goods

Sth. Korea

Clayton Jin, Warner Music Korea

BLACKPINK

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COUNTRYPROFILE19.02.21

MARKET PROFILE South Korea continued...product, but other, fast-increasing, local genres such as hip-hop are much more skewed to digital consumption.”

Into this buoyant digital market comes Spotify, which launched in South Korea (without a free tier) in February 2021, full of hope. Alex Norström, Spotify’s chief freemium business officer, said that the launch “presents a massive opportunity for us to not only further our mission of bringing new and quality content to more audiences, but also help local Korean artists tap into Spotify’s 320 million listeners worldwide”.

Spotify has, undoubtedly, helped to spread Korean music globally, launching its first K-Pop flagship playlist, K-Pop Daebak, in 2014, followed one year later by a dedicated K-Pop hub. But the Swedish service will face a stiff battle in a South Korean streaming market where local DSPs like Melon, Genie Music and Flo are so well established. (A recent report by Korean news site Pulse explained that Melon has a 40.3% share, Genie 24.6%, Flo 17.7% and YouTube Music 5.7%.) At the same time, some local observers believe that Spotify’s South Korean service needs to improve its range of local music.

Overall, though, as you might expect, Jin is optimistic for the South Korean music market. “I think the final figures will show that digital revenue increased during 2020, offsetting any falls in the physical market,” he concludes. “As we hopefully emerge from the pandemic, I think you’ll see some big physical releases that were put on hold go ahead and that should boost the market this year.”

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become passionate streamers,” he explains, “hoping to contribute to their artists’ success stories by heavily consuming their music on DSPs. K-Pop is one of those genres where the release schedule can impact the whole market when it comes to physical sales.”

We should not let the global success of K-Pop blind us to the importance of other musical genres in Korea: one of the break-out hits of 2020 was tenor Kim Ho-Joong, whose album of classical music, The Classic Album, sold 1m units last year including half a million pre-orders of the physical release.

“Changes in physical consumption are linked to trends in the local music scene,” says Jin. “K-Pop idols still shift a lot of physical

FAVOURITE MUSIC GENRE IN SOUTH KOREA

1 K-pop

2 Pop

3 K-Trot

4 Classical / opera

5 R&B

6 Soundtracks

7 Rock

8 Dance / electronic

9 Christian / gospel

10 Hip-hop / rap

62%52%

36%

Listening activities

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Source: IFPI Music Listening 2019

NCT