[Indonesia Hallyu⑥] Paying Half the Salary to Attend... K-Pop Concert

'Gwangya@Jakarta' Huge Success... One to Two Hours Waiting Time for Entry
Underlying Concept is 'Virtual Nation' Emphasized by Lee Soo-man
K-Pop Widely Consumed Across Indonesia
"Income Levels Improved, Growth Potential Still Large"

"Shall we go in for coverage? Please help me buy an NCT lightstick." This was the request from Indonesian women I met on the first floor of Lotte Shopping Avenue in Kuningan, Setiabudi, Jakarta, on the 3rd of last month. They were waiting in line to enter 'Gwangya@Jakarta,' which opened that day. It is a flagship store operated by SM Brand Marketing, a subsidiary of SM Entertainment. It sells various products related to affiliated artists such as NCT, Super Junior, Girls' Generation, EXO, SHINee, aespa, and Red Velvet. It took at least one to two hours to get inside. The crowd that gathered from 8 a.m. showed no sign of thinning even at 6 p.m. The displayed products sold like hotcakes. The NCT lightsticks were sold out within two hours.

The women, though disappointed, did not leave the line. Ajeung (24) said, "If there are no lightsticks, I can buy other items," adding, "I'm just glad to have the chance to buy authentic products." Dediya (25) also said, "Until now, to get authentic products, we had to order collectively in small groups," and "The purchasing process has become simpler, and we can enjoy various content, so I'm excited."

Gwangya@Jakarta is not just a store. It is closer to an experiential theme park showcasing intellectual property (IP) content by SM Entertainment. Under the concept of the virtual world 'Gwangya,' various contents are produced and provided to convey the unique stories and worldviews of the artists. Kim Juhan, Head of Asia-MENA Management at SM Entertainment, said, "Local fans actively participate by dancing along to music videos played on large screens and posting on social media (SNS)," adding, "We plan to expand the space to encompass the entire K-pop scene by broadening the interaction with artists."

[Image source=Yonhap News]

The foundation of this success lies in the 'Virtual Nation.' It is a cultural community where people with shared interests online form strong bonds offline as well. Its influence has grown recently due to the development of the internet and SNS. Most fans gathered that day had close relationships through various groups and community activities. Lee Soo-man, SM Entertainment’s Chief Producer, foresaw this trend early on. In June 2012, during the keynote speech at the 'Regional Development Strategy Forum through Energy and Cultural Content Convergence,' he declared the construction of a virtual nation centered on SM Entertainment.

"In the future, everyone will be born with two citizenships. One is the analog birth country, and the other is the virtual nation. The first that comes to mind among virtual nations is SM Town. Last year's concert in Paris was to comfort the citizens of SM Town living there. SM Town citizens also live in Africa, South America, and the Arab world. Korea could be a great nation with billions of people, not just 50 million."

Two months later, the producer held the 'Music Nation SM Town Proclamation Ceremony' to enhance fans' sense of belonging and loyalty. It materialized into various business models such as fan tours where overseas fans visit Korea to watch performances. The challenge and adventure shone even in 2020 when the entire music market was shaken by the spread of COVID-19. SM introduced the world's first online paid concert platform, 'Beyond Live.' It was not merely a live broadcast of offline concerts. Using the latest technologies like augmented reality (AR), virtual reality (VR), volumetric video, and multi-video connection systems, it gave the feeling of being with the artists on-site while encouraging real-time interaction.

The new revenue stream was effective overseas. Especially in Indonesia, K-pop's popularity surpassed North American pop over the past two years. Dediya said, "There have been many opportunities to actively participate online, so I could continuously support NCT," adding, "I plan to visit Korea soon to experience foods that the members enjoy." Jaffy (26), a Girls' Generation fan, and Ajis (23), a Red Velvet fan, both said, "K-pop's popularity grew even hotter during the COVID-19 pandemic. Many friends around me have become proficient in Korean."

Luna (17), who visited Gwangya@Jakarta with her mother Lori (44), said, "More than half of the songs we practice in the school dance club are K-pop," adding, "My mom even memorizes the lyrics, so we enjoy listening to it at home." Kim Young-soo, Head of the Indonesia Business Center at KOCCA, said, "K-pop is widely consumed throughout Indonesia to the extent that artists advertise domestic products," diagnosing, "The overall income level is steadily improving, so there is still great growth potential."

According to global industry analysis firm Statista, Indonesia's music concert ticket sales amounted to $36 million (about 45.9 billion KRW) in 2019. The following year, due to the spread of COVID-19, it shrank to about 17% ($6.32 million). Last year, with eased restrictions and resumed external performances, it is estimated at $43.96 million (about 56.1 billion KRW). It passed the recovery phase and entered an upward trend. Statista forecasts that by 2027, about 2% of the total population will purchase music concert tickets.

The rapid growth is also noticeable at outdoor venues. The 'Allo Bank Festival' held last May featuring NCT Dream and Red Velvet saw the ticket purchase website crash due to overwhelming traffic. Fans waited 12 hours in front of Istora Senayan Stadium in Jakarta before buying tickets.

Ticket prices for K-pop artists' local concerts range from 1 million rupiah (82,000 KRW) to 3 million rupiah (246,000 KRW). Considering Jakarta's minimum wage is 4.6 million rupiah (377,200 KRW) per month, this is quite expensive, but almost all concerts sell out. Kim said, "Companies aiming to appeal to young people frequently plan invitation concerts to raise brand awareness," and predicted, "K-pop artists will also hold concerts more often as COVID-19 restrictions ease."

The rosy future is not guaranteed. Overseas artists' concerts are complicated from the preparation stage. The Indonesian government requires quite complex paperwork. Except for companies like SM Entertainment that operate local offices, most express reluctance. There is no standard for royalty distribution, causing frequent conflicts. Dani Satrio, PR Director of local music entertainment agency 12 Wired, advised, "While a music ecosystem exists, the industrial foundation supporting it is very weak. Procedures for standard equipment and event management must be carefully checked when planning concerts." He also offered the following advice to small and medium Korean entertainment companies planning to enter Indonesia.

"Indonesia is not just Jakarta. While the capital city is the top priority because people gather there, I recommend considering regional markets for differentiation. The population is large, and economic growth is ongoing, so the music industry can also expand. It truly is a huge potential market."