A Formula for Empty Fan Wallets — Consumption Driven by Aesthetic
While most fans (i.e. ME) are crying about how empty their wallets are for the next comeback/concert/album/release/fan service, these music companies and their respective groups are making money!
Kpop has become an international market where the production companies reap most of the monetary benefit. Falling into second place, the idols also get a portion of the money made from their services and products.
One of the interesting economic aspects about this culture is the music company’s marketing skills. They utilize a lot of the money they make to put into creating the aesthetically pleasing music video of the A-track (promoted track) of the album. Some of these music videos take hundreds of thousands of dollars to make it possible. For example, BAP’s music video “One Shot” took almost $1 million USD to produce. In addition to paying for the music videos, they also pay the performers who contribute into bringing money into the company by stealing the hearts of devoted fans. However, they aren’t paid nearly as much as people think because the company needs the money to continue putting out videos with high-production value, paying the employees, and paying for the design of the albums. Additionally, most idols don’t start getting paid much until they have become more popular. Instead, they are paying for their “debt” with the company since the company provided a place to live (dorms) and some meals for them while they were training under the company. Usually though, when new groups start gaining momentum and popularity, they make around $40,000-$100,000 a year per idol.
Companies do put thought into the aesthetics of the albums as well and are VERY good at making it hard to buy just one album with the same tracklist. In America, when an album is released, it’s typically a jewel-case, CD, cover, and lyric/credit sheet. However, it is much more different in not only South Korea but Japan as well. First, albums have photo books. Because Kpop is reliant on aesthetic and concept, they have a photo book compiled of photos taken in their outfits from the music video and era that match the concept. Second, Kpop groups tend to release multiple albums within a year. Often times, they will be singles (1–2 songs), mini-albums (around 6 songs), EP (3 or 4 songs), full albums (around 12 or so songs), and repackages (taking a previous album and its tracklist and adding a new song or two). Kpop albums tend to have a random collectible out of a set created by the marketing crew. This collectible is usually a photocard of one of the members of the group. This is already a formula for empty wallets because if a fan wants to collect all of the collectibles, they’d have to, at minimum, buy as many albums as there are collectibles/members in the group (and remember that Asian groups tend to have a lot of members). An album in South Korea, depending on production costs, can range from $11-$20. However, for international fans, they also have to worry about shipping, bumping up the cost even more. However, this doesn’t stop there. Not only do companies have multiples upon multiples of collectibles, they also may make more than one version of the same album! The only difference are the photobooks. Some concepts may have multiple fashion styles for the photoshoots. For example, GOT7’s Flight Log Departure album has two versions: Serenity (pastel pink and blue outfits) and Rose Quartz (neon orange flight jackets). Essentially, the contents of the album remain the same. The only difference: the look. However, there may be different photo books as well for INDIVIDUAL MEMBERS and a GROUP VERSION. GOT7’s Flight Log Turbulence album did this where there were 7 individual member versions and 1 group version. In that album, you got a random photocard out of 21. To make matters even worse, you couldn’t even choose the version of the album you wanted because they designed the album to come with a slip cover that prevented you from seeing what version you got until you opened it. So, if you were lucky, the most you’d have to buy would be 8 albums for the photobooks. Since these albums were full albums, they were usually sold around $20 each in South Korea (yes, much more for foreigners). That’s $160 spent in South Korea, if you were lucky and got all different versions in one shot.
Some companies may have different units (small groups within groups) that also create music different from the full group and release albums as well. One example would be EXO who has three sub-units: EXO-K (performs in Korean), EXO-M (performs in Chinese), and EXO-CBX (a subunit formed by members Chen, Baekhyun, and Xiumin). For every group release, there are two versions that come out (one in Korean, another in Mandarin). On top of those activities, EXO-CBX may release an album as well and continue to rake in money for the music company. Music companies make it really hard to buy just one album, but that’s what helps further their endeavors and make them money. If you pre-order the albums, some companies may give you pre-order benefits like a poster, standee or special photocards that can only be obtained if you pre-order. However, if you wait a couple weeks into promotions, the group can also do an MWAVE Meet and Greet where artists take orders from fans for signed albums (either by whole group or individual members) which boosts the price up around $10-$15 dollars more than the retail price.
Now, you may be wondering, well what happens to all the copies of the same album that fans buy to collect the cards? Many fans choose to re-sell the album without the photocard for a cheaper price to fans who don’t want the photocards and/or don’t want to spend so much money on an album. This causes the creation of KPop merchandise groups on Facebook where people can sell their unwanted albums, photocards, and other merch to those that want them. This also becomes a place where people can trade photocards so that they can get their bias (favorite member) or complete their collections. People usually don’t gain too much when they’re selling as it’s more of a way of them getting rid of stuff they don’t want anymore without experiencing too much loss. There are scammers who will try to sell fake products or sell products for much more than it is worth, but that is apparent in most online cultures.
As mentioned in a previous scrapbook entry, fans invest in fansites as well who travel all the time based on their idol group’s official work schedule (which fans are allowed to follow) and take high-quality photos of their idol group/member to post and create fansite merchandise which is very high quality. Because of the cost of travel and time and quality product, fansites sell their merchandise to dedicated fans. Depending on cost of production, the prices vary heavily. A portion of the money that they get for selling their products is set aside to buy gifts or donate to charities for their favorite idols and groups. In doing so, this is another way that fans also contribute to the economy. If you would like to read more about this, you can read about fansites on my previous blog post here.
Fans also invest in concerts and fan meets. By paying for more expensive tickets, fans get the opportunity to meet their idols in person, take pictures with them, get their autographs, and meet all of them. The more expensive the ticket, the more fan services they get form their idols. This is another way the music companies make money. Concert ticket prices depend on the group popularity. Some of the prices for the more expensive tickets that come with fan services usually range from $200 to around $300. Scalpers make it harder to get tickets as they buy up a lot before it’s sold out and sell them at ridiculous prices (that surprisingly some fans actually buy) like $1000.
The fans usually spend a lot of money because that’s what the companies rely on to keep putting out quality product for the audiences. Their money helps fund the music videos, pay the idols, host big events internationally, and continue to produce more that pays more.
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