Physical album sales dropped for the first time in a decade, alluding to intrinsic issues within the business model.
It’s no secret that K-Pop as a genre has been gaining popularity
in recent years. With more and more K-Pop releases swiping up spots on various international charts
and idols selling out global arenas, the genre has faced its biggest boom – but
is it also facing its biggest fall?
While K-Pop was already on a steady incline, the pandemic
saw the biggest spike in album sales. Circle Chart – the South Korean industry
standard ranking chart, previously known as Gaon – showed in their annual
year-end report that physical album sales had increased by nearly 64% between
2019 and 2020. The popularisation followed the shift into a more digital age,
with more interactions occurring online with increased usage of social and
music apps such as TikTok.
Annual physical album sales from years 2019 - 2024 showing a 19.5% decrease between 2023 and 2024
The incline continued at a moderately steady rate from the
beginning of the pandemic to when lockdowns started to lift, facing a sharp
incline in 2023. Over 100 million physical albums were sold domestically and
globally for the first time, with eight albums from five separate artists
selling over one million units. The top selling album sold over 3.5 million physical copies. However, the increase was followed by an
abrupt fall in 2024, where overall physical sales dropped by 19.5% - the first and most major drop in K-Pop sales since 2014. During the year, a total of zero albums sold a million physical
copies, with the top selling album selling just under 860,000 units.
Many factors have been claimed to contribute to the drop, such as high costs. International buyers will often need to pay double, or almost triple, the price of the original album, discouraging them from physical spending and therefore disrupting the increasing flow of international commerce. "2024 saw a significant decline despite multi-version releases becoming standard practice. BTS' military enlistment eliminated a major contributor to annual sales, while international shipping cost increases deterred overseas buyers," said Ciera Reeves, Editor in Chief and Founder of KpopWise. "An album could cost on average 13 USD, but shipping fees typically start at 20 USD for services. FedEx—and cheaper postal options became unavailable—many fans shifted to supporting artists through streaming platforms instead of physical purchases."
Number of physical albums that sold one million copies or more between 2019 - 2024, with at least one selling over one million every year except during 2024
The reason for the drop in sales has been a topic for debate amongst fans. The most common argument agrees with the overseas pricing issue, and that album collecting has simply become too expensive and impractical for the average fan.
"Albums and packages that contribute to overall album sales are expensive, so more people are bound to support their idols in easier ways [that require less monetary commitment] such as YouTube and MAMA awards streaming," said anonymous fan A, who has been a K-Pop fan for 12 years. "It’s a lot of time and effort to fully care for a group and understand their music style. Although there has been a significant increase in people interested in the genre, that doesn’t necessarily correlate to everyone buying an album because they’re interested."
The overall quality of "new" K-Pop since its globalisation has also been a cause for debate. Fans have questioned the priorities of K-Pop labels, with some claiming they have shifted focus from providing an artistic and pleasurable listening experience for fans, to the potential to go viral.
"I think companies are focusing more on 'TikTok challenges' and not actually making the song sound good," said anonymous fan B, who had been a K-Pop fan for 15 years. "Songs are now two minutes at most, only a small part of the title track chorus sounds good to make a dance to, and the rest of the songs are average."
In 2023, sales distribution was shown to be fairly balanced for
the first month sales of the top album, with overseas buyers
contributing to 53% of sales. The decline in 2024 however, brought with it a
drop in international sales, with first month overseas distribution for the
2024 top album dropping to only 9%. Distribution of albums between domestic South Korean sales and overseas sales, showing a dramatic decrease in overseas sales between 2023 and 2024
Pricing issues however, do not simply stop at albums. Concert culture alone, where tiers such as VIP or even "send-off" act as another avenue to generate funds. While it's understandable that international events cost more than they would domestically, the margins at which the industry prices concert tickets grows by the year.
"The recent prices are absurd, reflecting the real root issue that K-Pop is still treated as a niche commodity and an easy cash cow," said K-Pop journalist Kirsty Bright. "Especially in Europe, where international fans, afraid of missing out, end up paying ridiculous fees. It’s a catch-22. In fact, it’s cheaper to purchase a VIP ticket and fly to Korea."
When it comes to K-Pop concerts, it's not just the pricing that discourages fans. It's common for concerts to be announced more rapidly and closer to the show date than most other genres, giving fans little-to-no time to save or prepare.
"Fast and quick comebacks add to that problem, where fans will have to choose what group to spend their money on," Kirsty said. "As unlike other genres that announce tours well in advance, K-pop tours are often announced with little notice to ticket sales, with the tour happening in the next two months or so. Fans just want to be treated as customers parting with their hard-earned cash – especially in today's economy – and not with big money signs."
If we look at history, K-Pop had recovered from its first
fall in 2014 and had been on a steady incline over the last decade. While the
boom seen during the pandemic brought the genre into the mainstream, does it
have the longevity of other genres like rock or country? While domestic sales have more stability, the largest fluctuations seem to be with the international fans. With global costs of living rising, and luxuries such as importing albums at steep margins become less accessible, could the goliath rise of K-Pop be reaching its swift end? While it cannot be said definitively that the high prices are the result of corporate greed or rising costs of international travel and commerce, it still remains a barrier between the industry, and a large portion of their audience. The subpar treatment of fans has also been credited as a culprit to the decline, with fans wishing to simply be treated as human and be given a good experience, rather than used for their ability to consume.
Data from Circle Charts and similar databanks can only
evidence the observation from a commercial viewpoint. Could there be other
factors at play that are contributing to the decline? Whether the fall in sales
were just a fluke or the beginning of the end cannot be confirmed until the
end of 2025 when annual sales figures are released.
Until then, do you believe that K-Pop as a business model can recover from this fall? If not, what do you think the industry needs to do to salvage itself?
Let us know, and be sure to follow KpopWise for more updates.
Source: Circle Chart
