Sunday, 16 June 2013

The Changing Face of the Korean Music Industry: Going Back to Live

Gaon recently published an article describing a trend in music sales. With digital music suffering from piracy and no iTunes or Amazon-like digital sales system and fairly low physical sales (compared to the 1990s), recorded music sales are stagnant. Live music sales are, however, increasing.

Before tapes, CDs and digital downloads became prevalent, most people had to attend live events to hear music, limiting the reach of artists often to local areas of a country. Touring was the bread and butter of singers. In the 80s and 90s CDs and then in the 00s digital downloads became big business and in many industries, live events were held to help boost CD sales. This can be seen in fan singing, fan meetings and handshake/touch events, particularly those in which one gains admission through a lottery by buying an album. The costs and profit from the live event are purely made through the boost in album sales.

The market has changed dramatically, particularly in South Korea where cheap access to the internet with often unlimited downloading has led to widespread piracy and then ridiculously low download prices in an attempt to ward off piracy. This has led to a resurgence of live events as the bread and butter of many artists.   Sales from live events is growing in recent years while digital and physical recorded sales remain fairly steady.

This chart show the expected trajectory of live music event sales compared to recorded (digital and physical) music sales in the next few years with real numbers from 2011 and 2012 used as a base. The red line is live music sales while the green line is recorded. The numbers are in millions of dollars and represent worldwide, not just South Korea.*

The article also mentions that two years (24 months) after their debut, Woollim idol group Infinite had sales (NOT earnings but sales) of 12 billion won ($10,632,000 USD) with 6 billion of those won coming exclusively through concerts/live events. Last year TVXQ's World Tour had an audience of 570,000 people totaling 1 hundred billion won ($88,600,000 USD) in sales which averages to 155 USD in sales per attendee although that may include more than just tickets**. Singer Lee Moon held a solo concert in Jamsil with a total of 80,000 spectators which brought in a lot of money, an amount that is a difficult number for non-idol and/or pop artists to manage through recorded music sales these days. 

This not only means that a wider variety of artists can make money through live events in ways which are no longer possible due to low recorded music sales, but also that artists might make more money as often artists are given a bigger percentage of concert and live event sales than they do of albums and digital sales.

The South Korean government has responded to this trend by building new concert halls, something desperately needed in South Korea. Abroad, if this trend in live event sales does indeed continue, we may see more artists take advantage of overseas support by holding world tours as BIGBANG, 2NE1, G-Dragon, Super Junior, Infinite, DBSK, Xia Junsu and Girls' Generation are doing. Still it seems K-pop companies aren't giving up on recorded music sales as many artists and companies make music available on iTunes worldwide and open eBay and other online stores to sell recorded music directly to international fans. Digital sales in particular have little overhead but with decent pricing can bring in significant profit without the potential investment disaster of a concert with low ticket sales.

What do you think? Are live shows becoming the re-new money makers with prevalent online piracy? Will we see a mix of the two as represented by Psy's concert which was also streamed live? Would you rather spend $150 USD on a ticket or $15 USD on an album?

*Some data courtesy of Price Waterhouse Coopers.
**It may also include VIP-type packages where a person buys a VIP ticket but also gets merchandise as part of the ticket among other things. It does not necessarily mean that the average price of a ticket was $155, the article was not specific enough, although that is the way I read it.
***Only a portion of this article is taken from GAON's article, it is not simply a direct translation.
If you notice any translation errors please comment.

1 comment:

  1. It explains why there are so many world tours this year.