Album Sales of the Big 4 Entertainment Companies to Decline 10% This Year
Concert and Merchandise Revenue Drive Improved Performance
BTS World Tour Expected to Attract 3.9 Million Attendees Next Year
The fandom structure that drives revenue in the entertainment industry follows a pyramid model of Mass-Light-Core. The core audience, which forms the most dedicated fan base, accounts for approximately 80% of total revenue.
On November 14, Heungkuk Securities released a report titled "2026: Stage Reopening," analyzing that, instead of album sales, which had driven the growth of the four major K-pop companies in Korea, live performances are now leading revenue growth and contributing to the expansion of the core fan base.
Album Sales Surge During the Pandemic Now in Decline
Album sales for the four major Korean entertainment companies surged during the pandemic, but entered a period of adjustment after peaking last year. This year, annual album sales are projected to reach about 57 million units, down 9.5% compared to the previous year. This is because the main axis of fandom consumption is shifting from albums to concerts and merchandise (MD). From a revenue perspective, this change is favorable.
Currently, the K-pop fandom is estimated to include at least 2.6 million core fans and around 10 million light fans. In order to expand the high-contributing core fan segment, the base of light fans must increase, and the conversion rate from light fans to core fans (core conversion rate) must also rise. As of the second quarter of this year, the K-pop core conversion rate is estimated at 3.5%.
More Concerts Lead to Fandom Expansion and Revenue Growth
With the global popularity of K-content, the brand value of artists has increased, boosting their ability to attract concert audiences and raising the ATP (average ticket price) through the introduction of premium seating. According to Billboard, Coldplay ($142 million) and Shakira ($130 million) ranked first and second in global tour revenue for the first half of this year, followed by Korea's Seventeen at $121 million. Stray Kids, who held a world tour from last year through this year, attracted a total audience of 2 million.
Photo by JYP Entertainment
The expansion of overseas tours not only broadens the K-pop fandom to the general public, but also triggers a chain reaction of increasing both light fans and core fans. It also contributes to the growth of MD sales, in addition to concert revenue. In particular, the recent introduction of more practical MD products has led to increased MD purchases by light fans.
As demand for K-pop concerts rises, the time it takes for rookie groups to generate revenue through performances is getting shorter. Compared to the third generation, fourth and fifth generation groups are entering arena-level (15,000 to 25,000 seats) venues more than a year faster, and dome (30,000 to 50,000 seats) and stadium (over 55,000 seats) venues more than three years faster. For rookies who debuted within the past two years, it is estimated to take about 26 to 28 months from their debut to enter arena-level venues.
Next year, a new chapter in K-pop concert history is expected to be written with the resumption of BTS’s activities. Song Ji-won, an analyst at Heungkuk Securities, stated, "BTS's world tour scheduled for the first half of the year is expected to draw about 3.9 million attendees and generate total revenue of $600 million (850 billion won), the largest in K-pop history." Song added, "Given the high volatility and the importance of sentiment and supply-demand in the entertainment industry, we recommend investment strategies that track the strength of event momentum." Heungkuk Securities named HYBE, BTS's agency, as its top pick, and YG Entertainment, which is expected to see Big Bang’s return next year, as its second choice.
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