Structural Weakness in K-POP’s Domestic Market Amid Global Boom... Album Sales Decline for First Time in 10 Years

Despite K-POP achieving record-breaking growth worldwide, the domestic market is showing signs of structural weakening. The South Korean pop music industry reached a turning point after the pandemic, and industry experts view this as a fundamental shift rather than merely a period of decline. A sharp change has occurred in album sales, which serve as the clearest indicator of the health of the K-POP industry. After showing a steep upward trend since 2014, K-POP album sales reached an all-time high of 100 million units in 2023, but they declined for the first time due to market adjustments following the pandemic. As of October this year, cumulative sales remained in the 80 million unit range, with annual sales expected to fall below or equal last year’s levels. Physical album exports are also struggling in key markets. According to customs statistics, album export revenue from January to October totaled $243.8 million, a 2.7% decrease compared to the same period last year. This figure falls short of expectations given K-POP’s rapid global expansion. In particular, exports to Japan—the largest overseas market for Korean albums—plummeted by 10.8% to $70.7 million, while exports to the United States also dropped by 5.1%. The domestic digital music market is also showing signs of stagnation. On recent Circle Chart digital rankings, only 4 out of the top 10 songs were K-POP tracks, a stark contrast to the girl group boom era when groups like NewJeans, aespa, and IVE dominated the charts. Recent streaming data for new songs also indicates that short-term momentum is slowing down, with long-term song popularity gradually declining. Meanwhile, while overseas concert revenues are rising sharply, profitability is worsening due to increasing production costs and expenses associated with new groups. Despite HYBE’s third-quarter concert sales nearly tripling compared to the same period last year, the company still recorded an operating loss of 42.2 billion won (approximately $31 million). The success stories of mid-sized entertainment companies are also fading. As the industry shifts toward large-scale marketing and global tours, it becomes increasingly difficult for smaller firms to survive, as production costs continue to rise amid falling album and digital sales. Amid this weakening domestic market, local indie musicians are seeking opportunities abroad. This is because the domestic music market is dominated by K-POP genres and large entertainment companies, making it hard to compete. Emerging bands such as the rock group Two More Low are targeting overseas audiences by adding Korean, English, and Thai subtitles to their latest music videos, setting Southeast Asian countries as their primary target markets. Band members are preparing for these expansions actively, even studying English while maintaining their jobs. Korean artists across various genres, including Wave To Earth, The Rose, ADOY, and Say Sue Me, are achieving success overseas through platforms like YouTube Music and Shorts. This is because social media-driven viral marketing has lowered entry barriers since the pandemic, opening up pathways to reach a larger global audience than what is possible in the domestic market.