SB Chat Box #9: SM vs. YG market strategy

media

Written by Amy On December 15, 2011

This week we start our discussion based around a recently released article on the digital vs. offline strategies of SM and YG Entertainment, and end our discussion with Subi having posters of Yunho on her wall. Go figure.

SM vs. YG, offline vs. online (1:12)
Accessibility and aspirations (5:45)
SM merchandising (14:34)
SM, YG, JYP strategies (25:23)
K-pop fan loyalty (33:35)
K-pop becoming mainstream -> a dirty little secret?? (38:30)

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Download the podcast here.

Congrats to Kriscod who got all the songs on the previous chat box. Leave your guesses in the comments section!

As usual, look through our chat box tag for more of our past podcasts.

Until next time…!

Amy

I like angsty TV, boy bands, and can appreciate a good, non-creepy stare.

I Tumble and I blog.

More Posts – Website

Tags: Seoulbeats Chat Box

http://pulse.yahoo.com/_2HLWIJFBCMMYGQYBMYXOPTEXF4 Mq

- YG has to expand overseas. The Korean music market is a dying ground. They know this, which is why YG has been trying, although they have been underplaying their attempts, to crack the Japanese music market.

- I think comparing levels of difficulties between celebrities and us other people is unnecessary. Each person chooses their own lifestyle, and each lifestyle comes with its own difficulties. My difficulties are different but no less of a difficulty than say, Jessica getting criticized for X, Y, Z.
Kijy

About the 2ne1′s Best New Band win-

They may not be the BEST new band in the world, but they were definitely the most polished/marketable out of all ten contestants.

At the BNB concert, disregarding music quality, 2ne1 was the best.
La Vida Boheme was good but didn’t get my blood pumping; Yuna has a sweet voice but otherwise boring; and Gyptian [rolls eyes].

Whatever else there is to say about their voices, music, or dancing, they were the most entertaining of the bunch.

Entertainment value goes a long way for fans. No matter how awesome a song is, if the singer isn’t entertaining, then no one will pay attention.

I’ve been to a Skrillex concert and it was intense, but honestly, I’d rather watch a 2ne1 performance online.
ndr

Trying my hand at this…
Troublemaker – Troublemaker
Like the First Time – T-ara
Dreaming - B2ST’s Yoseob, Dongwoon, & Junhyung
Chocolate Love (Retro) – SNSDI Don’t Know – MBLAQ
Thanks girls for the podcasts! Very entertaining to listen to and look forward to more!
- ndr
  
  Sorry, the second last line got skewed… I meant to press enter to separate SNSD’s song and MBLAQ’s song.
- http://evacuatewithstyle.org/blog Amy
  
  Ding ding ding! That was quick. :D
Guest

i feel like you guys need to retake kpop sales 101. most of the comments made about digital vs physical sales were just, for lack of a better word, wrong.

1. album sales are more profitable – wrong. the album sales market is in a slump. 10 years ago, top kpop acts were selling 1 million copies a year. now, suju gets to 400,000 only with some dedicated bulkbuying and to crack 100,000 with one album is an achievement. plus, the cost of producing an album is much, much higher than a digital song. they have to spend money on designing the album, making it, producing it in bulk etc etc. all of that eats into the profit from the sale of an album. digital songs are easily accessible, there’s no material production cost and are downloaded in the millions. they’re much cheaper than an album but there’s no production cost outside of musical production and the sheer volume of downloads makes it way more profitable. and there are multiple ways to earn digital revenue in addition to song downloads like bgm and ringtone downloads. plus, you’re talking about korea, the world’s most wired nation. obviously, it pays more to be digitally successful than getting 1 teenage fangirl to buy 10 copies of the same album. which is why, the top selling digital song and the top selling album make about the same amount of revenue. but the 20th most popular digital song makes much, much more money than the 20th most popular album.

2. sm is aspirational – wrong. sm artists are the guys and gals next door. they’re on variety shows, on radio, they sell fried chicken and vegetable oil, they’re the nation’s little brothers and sisters, the ideal kids. yg, on the other hand, is aspirational. they do very few cfs, don’t do too many variety shows, don’t host their own shows but they’re still the highest paid cf stars (bigbang is as a group and top and gd are individually), they collaborate with high fashion brands like corso como for merchandise, their fashion is imitated all over dongdaemun. they work off the idea of exclusivity. to see 2ne1tv, you have to get cable tv. to see more bts of bigbang’s big show 2011, you have to buy it off olleh. and obviously, it’s working. bigbang’s appearances on shows often push up ratings and when they had their comeback show, it aired at midnight and beat out all the shows airing in that time slot, including kim jung eun’s chocolate. whereas, suju is on tv every day of the week and the wider korean population still can’t be bothered to pay $1 to download a suju song. and appearances on varieties are overrated. unless you’re a regular on one of the few shows with big ratings (see the rise of lee seunggi), it makes no difference. the ratings of most shows are absymal.

3. sm is good at merchandising – yes, they are. merchandising is their bread and butter because they rely on large fanbases for the bulk of their sales. merchandise is for fans. if your strategy is focussed on building fanbases, then you have to have lots of merchandise. but yg is not far behind. bigbang are monsters at selling merchandise and yg milks it for all it’s worth. this year, yg sold big bang chocolate ffs. bigbang has their own perfume, a board game, a comic, online game characters (and they’re the top-selling ones outselling rain) and a 100 other things that dedicated vips buy without fail. they also have merchandise for each of their solos that gets sold-out regardless of how ridiculous it is. $800 gd&top beats headphones? sold out in 10 minutes. but yg does this mostly for bigbang because they have the second-largest fanbase in kpop.

4. yg doesn’t do concerts – no. bigbang debuted at the yg fam concert and had a solo concert 4 months after debut. shinee had one 3 years after their debut. again, concerts are about fanbases. sm has more artists with big fanbases, therefore they have more concerts. but bigbang has done more concerts than most kpop acts. i think of the current groups, only dbsk and suju have done more. it’s also costly to put up a concert. yg really became a major player only after bigbang. and they still don’t have the kind of cash that sm does to hold family concerts at multiple locations around the world. yet, in addition to the yg fam concerts, 4 out of their 6 active artists have had sold-out solo concerts/tours this year and 2 of them have been outside of korea.

ultimately, strategy comes down to company size. sm is a behemoth. they have more artists, more major artists, more years of success, more reach, more everything versus yg. yg is a mid-sized company with one extraordinarily successful group. that they are even mentioned in the same breath as sm and even come close to sm’s revenues (and beat them on profit margins) is a testament to the power of bigbang and some damn good business sense. yg got really lucky with bigbang and then he took that opportunity and ran with it. along the way, he used some excellent pr and marketing to convince everyone that yg is at the cutting edge of kpop (and in some ways they are) and everyone believed him. sm is old money and behaves like that. they’re using the same tactics that they did in 2000 and it can be dangerous like the melting of dbsk’s fanbase has proved. but so far, they’ve managed to survive those scares and dominate because of their size.

and now i will shut up. a cyber cookie for everyone who read this.
- chelle
  
  If only I could change the like button to love
- Bianca
  
  why log in as a guest?? damn youuuu. i wanted to worship you! ahha. jk.
  
  great post though.
- anash
  
  you know what, i love you LOL
  i hope one of the girls talking above will try responding to ur comment with their arguments. sometimes i feel like some of the SB girls were just trying too hard to be overly critical w/o backed up arguments.
- http://www.facebook.com/profile.php?id=100000733800778 Mary Noona
  
  Though I agree with most, please know that because of SM’s focus on merchandising, their digital sales aren’t going to stack up against other companies. Their focus is album sales, and it’s apparent with all the Version A’s and B’s and C’s.
  
  Also, at some points, you come off as incredibly biased. YG actually has a larger performer roster than SM as of now. Yes, this means mainstream music. YG did score well with Big Bang, but they aren’t their only artist, just their most profitable (and possibly the only reason why they cash).
  
  Where SM excels, it’s the fact that they create these groups with these immensely dedicated fangroups and popularity one after the other. We can name almost all SM groups off the tips of our tongue. They rattle noise, we know them, and they rattle loud, for their popularity extend past South Korea. Oh… and boy do they pay.
  
  Yes, Big Bang is great and fabulous and brilliant, awesome. But to create something one after the other?
  
  These companies are comparable because they relate in size. I would definitely not call YG a midsize company. They are one of the big three because of their market share and size.
  
  I wish I could quote their market worth, but I can’t as the year is not over. But know, last year, SM blew YG out of the park, making over 3 times as much as YG made. Their net profit could not be compared, SM took over completely. That may be different this year because of Big Bang’s promotions, but from the looks of it, I wouldn’t count on it considering the big names of SM didn’t comeback until the second half of the year but we’ll see.
  
  Not many may like SM, but no one can deny how great they are at milking the cash. It’s a fact.
  - http://www.facebook.com/profile.php?id=100000733800778 Mary Noona
    
    To add by the way, the years of experience between the two companies actually holds a difference of just 1 year. YG created in 1996, SM 1995.
    - Guest
      
      again, that’s not the point. it took yg almost 10 years to get a foothold in the market. till then the company was being run with his personal fortune. yg was a bit player because they were not in the idol business, they were trying to make hip-hop mainstream and failed more often than not. bigbang was their first idol group and has been their biggest cash cow because idol groups are more profitable. sm has always been in the idol business. which is why sm made enough cash to go public 10 years before yg.
  - Guest
    
    - i don’t see what merchandising has to do with digital sales. they are two separate areas. merchandising is the side-project, excessive merchandising is the bonus when you have groups with a big fanbase. sales are sales. sm has low digital sales because their music, except for snsd and f(x) does not appeal to the general public. yg does a lot of merchandising. all of their artists and 1 of their actors has merchandise in addition to yg family merchandise.
    
    - yg has 6 artists. 2 idols groups – 1 male and 1 female, 1 ballad singer, 1 solo artist/idol, 1 rapper and 1 veteran soloist. out of this the regular money makers are the two idol groups, one of whom makes significantly more than the other. sm has 5 idol groups – 3 male and 2 female (one of which has two active sub-units), 3 soloists, 1 pop rock band and csjh (the grace), who i don’t know where to put. all of these artists have released something this year in asia. i’m pretty sure i’m missing someone.
    
    - i never said that sm is not amazing nor did i say that bigbang is better than any other group ever. bigbang’s popularity is largely chance. i just think that in the current korean market scenario, sm’s strategy is not the best in terms of a long-term outlook.
    
    - yg is a mid-zise company in terms of staff, artists, overseas operations etc. yg used to be big 3 by default. wheesung, 1tym and se7en gave them some credibility, bigbang made them rich.
    
    - again, this post is about comparing strategies, not about who makes more money. of course sm does better, but they do better because of their reach and their roster. what’s surprising is that yg does as well as it does and they do that well because of their strategy. if they followed sm’s strategy, which works so well for sm, they would flop miserably because they cannot sustain it.
    
    - sm will make more money than yg at the end of the year. no doubt about it. that doesn’t change anything i wrote in my post. profit and revenue are only 2 numbers in the balance sheet. there are a dozen other numbers and those numbers speak to long-term forecasts.
    
    you seem to think i’m anti- sm. i’m not. i was responding to the roundtable’s comments, not trying to big up yg.
  - G.
    
    “One after the other…” I think CSJH and f(x) are pretty much the foils to your claim.
the4thmonth

All I could think of why YG needs to expand overseas is because of money. In the long run they would earn more in America than Korea. I’m not trying to put the argument here that “YG only cares about money” crap but the man also runs a business and if the company earns more then he could put more stuff/groups out and eventually create more avenues for profit. Dunno, kinda juvenile response but that’s the only reason I could make.

About 2NE1 BNB, we can argue their qualification for being the best new band until the universe experiences another big bang (the explosion, not the group) but at the end of the day, I’m just happy that k-pop was able to reach the streets of New York and be heard by people who had no idea of what k-pop is. Whether the people passing by cared or not, whether it was DBSK or the Wonder Girls or Bigbang standing on that stage, it was just a great day for k-pop to be recognized for its existence. 2NE1 just so happened to play that role and for them to get knacked about it is just, in my view, unfortunate.
alexandre

You just cannot deny that in the marketing portion, SM bags it. No question ’bout it. They have groups that amass big fanbases. They really know how to work it. They know how to cater to the specific wants and music preferences of the crowd. And they really know how to make their fans stick to them like glue. I believe I understand the point of SM putting a lot of members in one group. Maybe SM wanted to take advantage the fans each member have. Like in SNSD, they have 9 girls and fans have their specific biases. Some may not like Sunny more than they like Hyoyeon but when it’s time to buy SNSD’s stuff, these fans cannot refuse to help just because Sunny is there. Of course they should support Hyoyeon, their bias. And to support Hyoyeon you have to buy the group’s merchandise even though you only feel like supporting your bias but you can’t help it, Hyoyeon is in the group. This itself is an indirect support to the group. See the logic? Having unnecessary members in a group is at least not useless because it is a smart marketing technique. If people won’t like one member they can still choose from the rest. And when fans are too inlove with their biases, they just can’t stop buying each and every single thing they are in, which includes the group’s stuff. Fans will deplete all their resources just to make sure they have the things that can keep their fantasies going.

About the CFs and variety shows, well they are ways to keep a group’s exposure at par. If random non-Kpop fans will run across Kpop idols on shows, the stars might spark some interest in the viewers and so people will get curious , learn about them or worse get totally hooked. People might see these guestings as mere fan service but if they dig deeper, they’ll realize, it is really to sell their group. Letting people know about a group will help them get more attention and popularity. And yes that is what companies would love to: people fueling a group’s popularity more and more. Here’s how it works: More variety shows= more popularity,more popularity=more money. So these techniques may seem very trivial but they are actually big factors in marketing an idol group. At some point, companies have done it a lot or changed their ways to sell more.
- Guest
  
  i don’t think it’s that hard to amass a fanbase. most boybands get a dedicated fanbase with some good marketing and sustained exposure. like how cube has done for b2st. all of sm’s big groups rn are boybands, so they seem to have the market cornered on fanbases. snsd is the real story in that they’re both popular with the public and have a large fanbase and sm has done very, very well in ensuring that. the only other idol group that has the same balance is bigbang.
  
  but sm’s reliance on fanbases can be dangerous because they end up fighting with each other and that can sometimes cause an artist harm. like the black ocean that snsd faced was largely organised by elfs and cassies. the halving of dbsk’s fanbase has also affected homin’s relevance in korea. though sm’s artists seem to get along fine, their fanbases are constantly working at cross-purposes. while jyp nation, sm town and yg family are all marketing ploys, sm town seems to be the least successful in fostering loyalty to the company and not just the group. yg family, on the other hand, seems to be the most successful in that sense with vips buying 2ne1′s first release in a show of support and minimal bickering between fanbases (any major tussles are between the fanbases and the company). and even companies are taking notice. they’re the only entertainment company with ad contracts for the company. nikon, cj group and me2day are endorsed by yg family, including the big actors, and not just bigbang and 2ne1.
  - alexandre
    
    Yes I do agree that it’ not hard to amass a fanbase. Like I said, companies just need to see what groups would mostly sell out to people. And although I can see your point in saying that SM reliance in fanbase is dangerous but it is also very essential. I think the bickering thing among the fans is indeed very uncomfortable and risky for the stars but it has certain benefits on the side of the companies.You know why? It is because when a certain group is more popular and have more sales than all the others, the fans of the other groups wouldn’t want that and would do everything they can to make their group in top. Take the case of ELFs and Sones(sorry for the constant use of SM artists and fanbases but I can apply theirs better because of its enormity and popularity). Some ELFs don’t like SNSD having a lot of awards , gaining more sales and attention than Super Junior, it can be apparent in the comments of ELFs in Suju vids where they say stuff like *Oh we need to watch this video more so that we can have more views that SNSD’s Run Devil Run video.” and so much more. Because of their want to do this to SNSD and make Super Junior on top again, they bulk buy their albums , watch their videos endlessly and buy every single merchandise of Suju to create the idea , through the reference of their sales, that Suju is indeed better than SNSD. Although I despise this kind of tactic but it can’t be helped. This does not only happen inside SM fanbases but pretty much to the majority of Kpop fandom. And with the loyalty thing on YG, yes I second that . They have the most smart marketing techniques as compared to SM. SM may have the biggest fans but YG has the most supportive ones.
    - http://kpop-rumblings.blogspot.com/ Enigmatic Sphinx
      
      It helps with the money making part, but it sure as hell does not help with inter-fanclub relations. There is not much family love to speak about when the “end game” of sorts is to shift as many albums to prove your group and fandom is “the best”.
      
      Also another interesting effect of this “game” is how many repacks can be shifted on this premise. Not much effort to produce and little marketing efforts needed, but a nice way to bump up the bottom line.
      
      And another one: “The album i buy and keep in packaging”. Too many that they become collectors’ items, never used for their original purpose as music.
      - alexandre
        
        I know. It is a shame that the companies use the trick of album repackages when they have exactly the same contents as the original one. Music that the idols make are highly compromised in this regard and what ticks me off is why the people actually buy it. The only difference they have are the pictures and the covers LOL. Bulk-buying has never impressed me either. It just shows how mediocre the idols are doing and the fans are more than ready to tolerate that.
http://kpop-rumblings.blogspot.com/ Enigmatic Sphinx

The fan loyalty thing is something the companies harvest for sales, especially merchandise wise (Looking at you there SM). It is also something that gives K-pop its uniqueness especially to Western Pop listeners, who do enjoy the unique relations between “artiste” and “fans”

On the downside, there’s this very artificially stifling environment created, where criticism is suppressed, and a fan is expected to defend his/her idol, and all aspects of him/her to the death.

I’m sure most have heard this comment “one’s a bad fan for not buying the album” or “one’s a bad fan for saying the songs suck”. As music is something quite subjective, and K-pop is not exactly the highest art form, we tend to pick on some things, but only blame where it’s due, and never slag off the artiste.

On repackages: They are rarely worth buying unless thought has been shown in the work, beyond new photos or covers. Still… one tends to be psyched into buying, due to the fact “they starve if we don’t support them”.

I also agree that it creates a very microscopic scrutiny of how the idols live and what they do, seemingly affording them very little freedom or private time, to present that ideal “single, available and virtuous” image we so love. Sometimes it’s so polished that we do have a hard time differentiating an “augmented” reality from what really happens, and that’s where the saesang fans come in.
Lee

listening to the podcasts is like listening to some school girls having a discussion during their lunch hour..I mean cmon you can’t even back up your statements, like the organic statement
- http://pulse.yahoo.com/_ZYL37XT5WPZ2WFUIMMBV7OECB4 D G
  
  What else do you expect from the ‘authors’ on this site? They spout their opinions and pretend it is fact.
  
  That is why this website is a total joke.
  - jhg
    
    lmao yes.
  - Anonymous
    
    I don’t understand, since you don’t like this site so much, why you always appear here? I don’t like allkpop so I only comment in some spazz-worthy article. Can you do at least the same? Come back when Seoulbeats finally write something you like.
  - http://twitter.com/KimcheeSushi フェィシア
    
    my thought exactly. why are you here, D G?
http://twitter.com/missyu8shi Yushi Wang

This may be a little bit irrelevant, but I wanted to ask about U-Kiss.
Why is it that they aren’t as popular and that people don’t really want to introduce friends to U-Kiss? I feel like U-Kiss as a group is as good as Super Junior (especially with the new member line up), their vocals are a lot tighter now as a group, and the last few songs have been really good.
Also, I don’t understand why SM is seen as such a good company, is being packaged really that much of a good thing? Like, sure they’re good at merchandising and all that stuff, but is that music really worth listening? Not saying that SM doesn’t have good songs, ’cause they do, but I don’t think they’re number 1 in terms of entertainment company.
This would be my first comment on seoulbeats in which I stated my opinion, LOOL I hope I don’t get bashed XD
- Katherine
  
  My friends are die-hard U-Kiss fans and they showed me random clips of one of the members dressing up as SNSD’s – Jessica (forgot who it was) and also introduced me to a song or two of theirs but honestly none of the songs were that great plus my friends were trying to make them come across as masculine/sexy and I couldn’t see any of the members as masculine. To me they seem like another group amongst the rest of the idol groups out there, they don’t seem to have something distinctive about them to set them apart from everyone else. – Just my 2 cents.
  - http://twitter.com/KimcheeSushi フェィシア
    
    Oh. the member dressed up as Jessica was kevin. My friend showed it to me too :P
    I used to not really like their songs but 0330 and Neverland got me. I think they’re a talented bunch and it’s sad that they don’t have as much support in korea cuz they prolly have a lot of international love they can’t see.
Mija

I’m glad you guys brought up the fan loyalty thing because I often think about what makes kpop fans so possessive and crazy about their idols but when it comes to American artists people will express their love for them without going overboard. You will rarely see someone fighting over Usher saying “he is my man” online meanwhile you can go on kpop secrets tumblr and see people admitting that they cry themselves to sleep over their bias. I thought maybe its the variety shows because you really get to see how the idols act when they are off stage which is something you don’t get with American artists but I don’t really know what it is.
http://twitter.com/AuNaturale_Yau MzChungai

From my little knowledge of economics, I think YG’s marketing strategy is more profitable and SME needs to go back to their drawing boards. I say this because I believe SME has in a way being able to fool people into thinking they are the still top of other entertainment companies since they are always first in the end of year sales and profit records. But the thing is SME attains that spot due to their large number of groups, numerous repackaged albums and low cost of production. While YG has always been some few figures behind that of SME’s records with only two groups, albums (sometimes mini albums) and high production cost. In fact with this same two groups YG was able to surpass SME during the mid-year. If SME has to do all these just to stay some few digits ahead of these mid-size companies, then I think they should realize that their strategy has not been as profitable as it seems.
- Guest
  
  it’s not even two groups that put yg ahead mid-year. it’s mostly bigbang and seungri. the bulk of gd&top’s sales were from 2010 and the bulk of 2ne1′s sales were post june 30. so, from jan-jun, yg had seungri’s mini, bigbang (concerts/mini/special ed/japan revenue), 2ne1′s lonely and bom’s don’t cry. that’s all it took to overtake dbsk, f(x), csjh the grace, all japanese revenue (shinee and snsd) and any other korean releases by sm.
  
  and yes, neither suju nor snsd promoted in the first half of 2011, when yg overtook sm but they both promoted in the first half of 2010 and sm earned $47 million then. yg earned $41 million in the first half of 2011 with largely bigbang.
  
  yg’s strategy seems to result in bigger bang for their buck in the current market scenario, pun fully intended.
- http://pulse.yahoo.com/_ZYL37XT5WPZ2WFUIMMBV7OECB4 D G
  
  You do have little knowledge economies but of course all the anti-SM people that dominate Seoulbeats (and no place else – I guess that is why they all gather here on SB or their little fan sites) that have no brains themselves love to ‘pat you or themselves on the back for every little dig’ they make against SM even when the facts you give are completely wrong.
  
  Both SM and YG are both listed on the KOSDAQ (Korean Stock Exchange) and SM is 2x the size (market cap) than YG.
http://pulse.yahoo.com/_ZYL37XT5WPZ2WFUIMMBV7OECB4 D G

SNSD (by themselves) had more revenue/sales than YG (the entire company including all its artists) in the entire year 2010 and the 1st half of 2011.

YG revenue for 2010 = 41 Million; YG’s revenue for 1st half of 2011 = 45 Million
Source : http://www.soompi.com/news/yg-entertainment-surpasses-sm-entertainment-in-half-year-sales

1) SNSD’s revenue from albums, singles, dvd sales in Japan for ’1st half of 2011′ = 32 Million
Source : http://www.tokyohive.com/2011/06/oricon-reveals-just-how-much-money-acts-made-in-the-first-half-of-2011/

2) SNSD’s revenue from their soldout 14 Japanese concert tour with over 150k concert-goers = 20 Million
Source : http://news.nate.com/view/20110718n06656?mid=e0100

3) Unknown revenue from endorsements in Japan (Dior, Liption, 7-Eleven, etc). Unknown revenue from merchandising in Japan

4) SNSD “The Boys” is currently the #2 best-selling album in Japan with 300k sold.

5) SNSD is the #1 in CF’s this year in 2011 with 28 endorsements commercials in Korea
Source : http://star.mt.co.kr/view/stview.php?no=2011121510470684533&type=1&outlink=1

6) Soldout concerts from their 2nd Asian Tour from Korea, Taiwan, Singapore, and the upcoming one in Hong Kong

7) etc etc etc etc etc …

From just SNSD’s revenue in Japan ($52M from media sales and concerts), SNSD, by themselves, had more revenue/sales than the entire company YG had in 2010 and the 1st half of 2011. The “$52 million” doesnt even include all the revenue from Korea, their concerts, and their endorsements. The “$52 Million” doesnt even revenue that SNSD had from the 2nd half of 2011.

SNSD (at least) $52 Million > YG (2010) $41M or YG (1st half of 2011) $45M
SNSD is truly the #1 girl group in Asia, #1 girl group in World and with their Interscope record deal, on their way to become the first Asian Global Superstars.
- xian
  
  let me ask you this… are that SNSD deserves what they are taking now?
- Anonymous
  
  So SME only claimed $38m of revenue for the first half of 2011(Jan to June – http://www.allkpop.com/2011/09/yg-entertainment-surpasses-sm-entertainments-mid-year-profits-for-2011)
  
  Yet you say SNSD alone made $52m in the same period?
  
  Lol, are they laundering money or what?
  
  Anyway missy, just a couple of details you completely ignored:
  
  1) The ‘at least $20m’ SME claimed from their Japan tour refers to concerts from May to JULY. You can’t compare YGE revenue in the first half of 2011 (Jan-Jun) with SNSD’s if you’re going to include an extra month in SNSD’ calculations
  
  2) Oricon presents national estimates based on reported sales from a number of retail outlets, therefore their ranks are not accurate (source: they explain this on their site). Regardless, even if the $32m are real numbers, they refer to RETAIL sales and have nothing to do with SME revenue.
  
  Let me put this simple for you: SME sells CDs+DVDs+whatever to Distributor, making Y revenue from that sale. Distributor then sells to Retailer, making Y+X revenue (whereas X minus expenses involved is his net profit). Retailer sells to public, making Y+X+Z revenue. Retail sales are then reported to Oricon.
  
  The retail value (retail sales) is the value of the purchase, i.e., the money you need to buy a SME product at a retail shop. The retail value is NOT the value SME gets from the sale. What SME gets from the sale is the retail value minus the distributor margin minus the retailer margin. Therefore, unless SME suddenly decided to buy every retail shop in Japan, $32m is not what they got from SNSD merchandising.
  
  Again, SME declared $38m for the first half of 2011, YGE declared $41m. SNSD alone is not enough to beat YGE’s revenue.
http://pulse.yahoo.com/_ZYL37XT5WPZ2WFUIMMBV7OECB4 D G

From Guest : “album sales are more profitable – wrong. 10 years ago, top kpop acts were selling 1 million copies a year”

I love this made-up lie that Kpop stars were selling millions in the good ‘ole’ days (10 years ago). FACT : album sales are increasing (and not decreasing) in Korea than 10 years, this is mainly due to overseas buyers purchasing Korean albums

Here are some facts about Album sales in Korea :
1) Hyori’s First Album Stylish (2003) = 153K
Source : http://en.wikipedia.org/wiki/Stylish_(album)
2) Rain’s Top selling album in Korea “Its Raining” = 202k
Source : http://en.wikipedia.org/wiki/Rain_discography

Too lazy up other top artists in the good ‘ole’ days. So please stop with this ‘myth’ …

FYI : Physical albums sales are MUCH MORE profitable than digital sales. I laugh when somebody gives this totally uneducated and uninformed opinion Why do you think ‘everybody and mother’ in Korea is rushing to release their music in Japan?
- Anon
  
  i love that you say something is a fact that then source wikipedia. you also talk about 2 soloists and not idol groups. and bring in japan which undercuts your own point. everybody is going to japan because it’s the 2nd largest music market in the world. because the korean market is dying. it started with the collapse of the physical market and if things continue to be the way they are, then the digital market may collapse as well.
  
  call me when someone sells 1 million copies like g.o.d.
  
  and your comment below is irrelevant to the conversation because we’re talking about the korean market, not the korean and the japanese market. you’re also proving my point. that yg is as successful as it is is because they focus on digitals i.e. despite being a mid-size company, they’ve had tremendous success in the last few years. and good job on brining up the market cap of a company that has just been listed and one that has been listed for 10 years. and also, once again shooting yourself in the foot. so yg is a “giant megacorporation” that has half the market-cap of sm and whose revenue is half of snsd’s in japan? doesn’t sound like a giant megacorporation to me.
  
  ps dear candyforeae/dana,
  
  go back to allkpop.
  - http://pulse.yahoo.com/_ZYL37XT5WPZ2WFUIMMBV7OECB4 D G
    
    What is wrong with wikipedia? Go to the link for Rain’s discography :
    http://en.wikipedia.org/wiki/Rain_discography
    
    See that little number notation next to the number sold? It takes you to references at the bottom of the wiki page, where you can click on the link to where it takes you to cache of the Korean Recording Industry Association website where you can verify the number for yourself
    
    GOD and HOT were the only over 1 million idol group sellers. From SES, Finkl, Shinhwa, etc all sold well below 1 million. Also, it is stupid to compare albums sales from pre-internet and after-internet. Top selling album in 2011 in the US was Adele with around 2.5 – 3 Million. Nsync sold 2.4 million in one week in 2000 and around 11 Million total with “No Strings Attached”. The popularity of idol group in Korea fell in the early 2000′s and the kpop scene was dominated by the likes of Hyori, Rain, BoA, Se7ven, etc.
    
    FYI : The #1 best-selling album in Korea is from a soloist – Kim Gun Mo
    
    YG doesnt get revenue from Japan? For example, since 2008, Bigbang have released in 4 albums, 5 original singles, 6 dvds, etc in Japan and had numerous Japanese concert tours including “Electric Love Tour”. A new YG/AVEX partnership (YGEX) was formed and 2NE1 released 1 album, 1 single, and a concert tour in Japan from the YGEX partnership. I guess revenue from Japan is only irrelevant when SNSD or SM does it?
    
    FYI #2 : YG’s market cap (share price x number of shares) is currently valued at $400 Million. SM is around $800 Million. $400 Million sounds like a mega corporation to me. Stop trying to delude yourself that YG is some ‘indie startup’ trying bring down the big bad evil SM.
    
    PS dear Anon. I will post where ever I want to, especially when it involves delusional YG-stans writing lies against SNSD because they cant stand that SNSD is #1 and they piss all over their biases. Seoulbeats should really rename itself into ‘I hate SM and SNSD.com”
    - Guest
      
      just the fact that one group was able to see 1 million records is enough, that there were two is surprising because korea is such a small market. the internet was always around in korea during the kpop heydays, so there is no after internet. the digital market strengthened purely because the physical market collapsed because of piracy.
      
      fyi: kim gun mo is not an idol. and the top-seller during at least one of these years was wheesung.
      
      yg does but this debate is about korean market strategy. so japan doesn’t matter in this particular argument.
      
      fyi: i never said yg is an indie start-up. it’s a mid-sized company. and since market cap is an evaluation directly connected to the number of shares a company has made public, your comparision is moot. get over your sm addiction and work on your reading comprehension.
      
      ps you would know a lot about delusion.
      - http://pulse.yahoo.com/_ZYL37XT5WPZ2WFUIMMBV7OECB4 D G
        
        “just the fact that one group was able to see 1 million records is enough”
        
        Kpop Idol Groups selling 1 million album before the internet and not after the internet. The internet was around also during Nsync’s time early 2000′s also in the US. I know you would like to discount the effect of the internet because it destroys your argument but only a delusional person like you cant see the tremendous drop all over the world (and not just in Korea) from the US, Europe, and Japan in album sales after the internet (and high speed internet) became common-place.
        
        “this debate is about korean market strategy”
        
        Korean market strategy is Hallyu or have you been in a coma for the last few years. You mention YG’s revenue ignoring that a HUGE part of the YG’s revenue is from Japan and not their ‘digital strategy”.
        
        “it’s a mid-sized company”
        
        $400 million company is a mid-sized company? Your definition of a mid-sized company and the rest of the business world must be completely different then. FYI : Do you know how the stock market works? If you have more shares on the market, your stock price goes down and if you have less shares on the market, your stock price goes up. When a stock splits, the stock price doesnt stay the same but gets cut proportionally to go along with more shares on the market… ‘the laws of supply and demand”. So you ‘theory’ about market cap shows how uninformed you are along with the rest your ‘rant’
        
        “ps you would know a lot about delusion.”
        
        Delusional is ignoring facts/reality and arguing against those facts/reality. That sounds like you.
Anonymous

You can see success of marketing strategies when you look down at the company’s profit.
SME net profit for the first half of 2011 was about 9.6% of their total revenue, while YGE was 16% during the same period.

I believe that part of that reason is because YGE manages costs better than SME. Digital sales are more profitable than physical albums, because you don’t have to pay for half of the costs that are involved in the packaging, plus the damage margin. I’m also pretty sure that The Boys MV ended up costing quite a lot (more than IMTB definitely) and that is possibly why SME decided to compensate the expenses with a simpler MV for Mr.Taxi promotion.

Concerts are a way of promoting your product, but they can also be highly expensive if you’re going to tour around a country. SNSD apparently made $20 million in Japan, but they had to perform 14 concerts, which involves a lot of costs (transportation, renting equipment, staff & artists payment). 2ne1’s concert in Japan came out certainly less expensive for YGE, as they only did a 3-days Nolza (if I’m not mistaken, I read this on allkpop). Yet considering they managed to gather almost $10million in revenue, it does not take a brain to figure out which company ended up profiting more from their concerts.

So to make it short: YGE marketing is revealing to be the most successful so far. If you were an investor and wanted to invest in one of these companies, you’d chose the one who has better NPW (net present worth). YGE’s NPW is probably better than SME’s NPW because SME made less this half year than the first half of 2010 (although I don’t know about their previous revenues, so I can be wrong).

Anyway, sorry for my English. You people update way too fast for my schedule.
felicia elasih

wow my comment just got eaten. … i had a long one, too.

but subi, you’re roflcopterr? really? from akp? if so… remember cacc? no? ok fine.

Kpop. As long as there is no competition within the kpop fandom itself, fans will scurry on to their internet devices and vote for that one single kpop artist for them to win because we all like to see people from ‘our side of the music’ win.

ok yeah I really can’t remb what i wrote er.. typed. <- useless comment.

sorry you ahve to read that ^

…. HAPPY BELATED NEW YEAR
Anihseyo

Is there a way to be part of these chats i feel like you need a JYPE lover lol : )…love these chats