I feel like there's been a lot of talk recently concerning both the massive increase and apparent decline of physical sales in K-pop, so I wanted to further examine historical trends related to this topic.
I therefore copied all available monthly Album Chart data from the Gaon/Circle website (2011 to 2023) and pasted it into an Excel spreadsheet. After some manipulation of the dataset's formatting, it was straightforward to add up the sales for the top 100 albums in a given month. However, I soon decided that this approach of looking at *total* sales was not ideal, since those numbers can be easily skewed by comebacks from high-selling artists (e.g. BTS, Seventeen, or Stray Kids).
Thus, I decided to focus on median (average) sales instead, since these figures wouldn't be affected by extreme values, and would therefore be a better indicator of the typical sales for a given month. The results of this methodology are shown in the chart below, with the orange dotted line representing a six-month moving average:
GaonCircle_MedianMonthlyPhysicals.png
Thoughts and Questions
- The first thing I'll note is that sales actually decreased from 2011 to the end of 2015. This is likely due to the general decline of physical media that we've witnessed since the turn of the millennium.
- Next, we see that sales began slowly increasing in early 2016, but why? My hypothesis is that this is when the Third Generation really began taking over from the Second Generation, a phenomenon perhaps best exemplified by the meteoric rise of Twice during this period. This era of new artists got people excited to buy albums again.
- We also see that sales climbed even further in mid-2017. I'm guessing that this was due to the international breakthrough that BTS enjoyed around this time, which helped bolster the level of global interest in K-pop even further.
- Sales continued to steadily increase until mid-2020, when they exploded. I mean, just look at the inflection point in the moving average line. Previously, I had speculated that pandemic-era lockdowns were the main driver of the recent album sales boom, due to the extra disposable income people had. After seeing this, I'm absolutely convinced.
- That being said, COVID-19 was only a major impediment for a year or so, yet sales kept increasing. Therefore, I believe that there were other factors at play:
- Continued worldwide growth in the K-pop fanbase.
- Fandoms playing into expectations that sales would be ever-increasing, and planning their buying habits accordingly, perhaps compounded by a desire to "beat" competing fandoms.
- Better global distribution of albums, which made it easier for fans to purchase.
- Lower album prices thanks to the popularity of digipack versions.
- An increased number of album versions and photocards, which encourages collector and "completionist" fans to seek out more copies.
- More fan signs and video calls, which fans have a better chance of attending if they purchase more. Note that video calls weren't popular prior to the pandemic, but they now give international fans an excuse to buy multiple copies.
- The ascendancy of Chinese K-pop fans, who seem particularly prone to bulk-buying. The Chinese are also prone to be akgae fans for some reason, which may encourage competition between C-bars.
- Sajaegi and questionable reporting of album shipments may have also inflated sales figures, as we've seen with the recent accusations against Riize.
- However, as the chart above shows, sales largely plateaued in 2023, and in fact, we saw four consecutive months of decline to close out the year. This level of decline has actually been a bit shocking to me. Just this past week, we've witnessed significant degradation in both Itzy's and Nmixx's sales. Red Velvet's and Aespa's sales have also collapsed in the past year. Thus, what I'm most curious about is the reason behind this downturn. Here are some potential causes:
- People having less disposable income due to inflation and cost of living increases.
- With COVID-19 out of the picture, touring is back, and fans would rather spend their money on concerts.
- General over-saturation of the K-pop market.
- Decreased sales in China due to a stagnating Chinese economy.
- Decreased sales in China due to C-bars boycotting or not being able to secure discounts.
- Decreased sales in China due to the CCP clamping down on bulk-buying and K-pop overall.
- Entertainment companies re-thinking their strategy of "over-shipping".
- Do you believe that sales will continue to decline? And if so, what is the "natural" level at which they will stablise?
I feel that this provides a solid overview of the physical sales market over the past decade or so. Is there anything that I missed? Did I get something wrong? And do you have any other observations?
