The girl group Black Swan performs at the Waterbomb festival in Hainan, China, on April 12, 2025. (courtesy of DR Music)
“If things continue this way, only a few major agencies will be left, and it will be difficult for the middle players to survive. That’s not an exaggeration.”
This is what an employee at a mid-sized K-pop entertainment agency said during a phone call with the Hankyoreh. The employee said that rumors about a crisis in the K-pop industry that began circulating at the end of last year “are becoming a reality this year.”
Rumblings of a crisis in the K-pop industry began last year, when record sales dropped for the first time in 10 years. Record sales exceeded 100 million for the first time in 2023. Last year, that figure dropped to 93 million, a decline of 19%. Record sales are an absolute indicator as they make up 30% to 50% of an agency’s revenue.
This year’s situation is more serious than last year’s. According to data published by Hanteo Chart on Monday, only four albums this year saw first-wave sales (sales seen within the first week of album release) of over 1 million units. There were no albums that sold more than 2 million. Even during last year’s overall decline, there were 22 albums that exceeded 1 million in first-wave sales, four that exceeded 2 million, and one album that exceeded 3 million. For the K-pop industry, it certainly wouldn’t be an exaggeration to call this a crisis.
The lack of a “major player” was cited as the major reason for the downturn. The absence of BTS, due to members fulfilling their military service, continues to be felt. The boy band Seventeen, which sold 10 million albums in 2022, also sent a member to the military last year, with more members set to enlist this year. This absence due to military service is being called the “military vacuum.” Meanwhile, the girl group BlackPink has not made any announcements for new music, with members focusing on their own solo careers.
“After the explosive success of BTS’ ‘Dynamite’ in 2022, global popularity of K-pop continued until it died down recently, and this plunge is being felt in the industry,” assessed music critic Lim Hee-yoon.
“The next generation of groups who are filling in for the absent so-called major players have yet to exhibit mainstream appeal that extends beyond their devoted fanbases,” Lim added.
Members of the girl group NewJeans answer questions from the press after attending a hearing related to legal disputes with their label, Ador. (Kim Young-won/Hankyoreh)
Exactly one year ago, on April 22 of last year, Hybe began its internal audit of Min Hee-jin, the former CEO of Ador. The resulting spat between Hybe and Min went public and into the long term, and has been identified as one of the major factors behind the K-pop industry slump.
Following the court’s recent approval of an injunction, Ador’s cash cow NewJeans went on a hiatus, adding fuel to the fire.
“NewJeans was immensely popular, but now they’re out of the scene,” said Lim. “Combined with the explosive internal ‘idol review’ documents that came out during a National Assembly audit last year, the onetime industry leader Hybe is now not only suffering diminished revenue but has taken a major PR hit.”
“This negative publicity affects not only Hybe’s subsidiary agencies but the industry as a whole,” Lim added.
In fact, Hybe’s operating profits last year dipped 38% compared to 2023. For the first time since the company went public in 2020, Hybe saw a net loss.
Kakao founder Kim Beom-su and other executives are on trial for suspicions of stock manipulation involving Kakao’s acquisition of major K-pop agency SM Entertainment.
There are even rumors that Kakao Entertainment is looking to sell off agencies like SM, Starship and Edam.
But the problems extend beyond the industry in Korea itself, with declining sales in Japan and China being seen as yet another reason for the overall slump in K-pop. A great deal of K-pop albums make their way overseas not through official export channels but online orders from overseas, proxy purchases, and fan club group purchases. But sales in Japan and China, which accounted for a considerable portion of such purchases, are reportedly falling precipitously.
Seventeen, which now has members headed into their mandatory military service. (courtesy of Pledis Entertainment)
“In Japan, local idols that adopt all the trappings of K-pop are starting to pop up and gain popularity, while in China, the ban on Korean cultural products mixed with a bad economy means that we’re unlikely to see any growth in record sales there,” an agency insider lamented. “We’re heading toward a situation in which agencies are forced to rely entirely on the US market.”
While there growing expectations that China may do away with its bar on Korean cultural products — a legacy of the THAAD dispute — kindled by recent moves such as the rap trio Homies performing on the mainland for the first time in eight years, many within the industry say that it’s far too early to get their hopes up.
Still others say that the current crisis in K-pop could be the perfect opportunity to transition the industry to a more sustainable model.
“One could interpret [the fall in record sales] as actually a return to normal following the bubble that was Korea’s extremely high K-pop record sales numbers — numbers that were so high that they prompted suspicions of pushing them onto consumers,” said Kim Yoon-ji, a senior researcher at Korea Eximbank’s Korea Economic Research Institute. Kim said that the industry should “strike a balance by boosting sales of IP and performances.”
There are also those who say it’s time for K-pop to start rethinking how it approaches its music.
“The limitations of a K-pop industry that grew based on fandoms by putting unrealistic visuals above all else are becoming clear in the global market,” said Lim, the critic. “We need to give some serious thought to how K-pop can gain traction in the English-speaking world that gave us pop music, like Jungkook did with his solo work.”
BlackPink members are currently focusing on their solo careers. (courtesy of YG Entertainment)
By Lee Jung-gook, staff reporter
Please direct questions or comments to [english@hani.co.kr]
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