K-Pop's Global Influence Grows... Direct Fan Connections Become Key for Entertainment Firms [Weekend Money]

Shinyoung Securities: "Direct connection with global fans will become increasingly important"
Unlike in the past, K-pop is now driving the global music industry
"Independent influence and agency to drive changes in industry valuations"

As K-pop builds an ecosystem of its own in the global market, an analysis has found that the ability to connect directly with global fans will become a key capability in the entertainment industry.

On Oct. 31, Shinyoung Securities said the influence of major entertainment agencies in the K-pop industry is weakening. “In the past, K-pop’s competitive edge came from using financial resources, trainee development systems, global distribution networks, and the fandoms of senior artists to make new acts successful,” said Kim Jihyun, a researcher at Shinyoung Securities. “However, as content production resources and global distribution channels have diversified, the exclusive advantage of major agencies has weakened.”

Shinyoung Securities said K-pop’s influence on the global music industry is also growing. It cited, for example, BTS’s refusal to submit an entry in the “Best Asian Pop Music Performance” category newly established for the 2027 Grammy Awards. BTS issued a statement on the awards, saying, “We hope music will be heard and loved for what it is, rather than being defined by region or language,” prompting a boycott to spread among other Korean singers as well. The Grammy Awards are known as the most prestigious popular music awards in the United States.

“In the past, being recognized on the global music industry’s major stages symbolized K-pop’s globalization. We believe this now shows that K-pop is evolving into a stage where it wields influence of its own without being incorporated into the existing order,” Kim said.

With K-pop now driving the industry, Kim emphasized that the entertainment industry’s key capability lies in connecting directly with global fans. “For the K-pop industry’s long-term growth and value creation, the ability to connect directly with global fans and who captures the economic value generated in the process will become increasingly important,” Kim said. “Independent influence and agency are expected to drive changes in entertainment industry valuations.”

For these reasons, Shinyoung Securities named SM Entertainment, which is preparing to debut its new group SMTR25, and DearU, which operates the fan messaging platform Bubble, as its top picks. It set a target price of 130,000 won for SM Entertainment and 35,000 won for DearU, maintaining a “Buy” rating on both stocks.

This content was produced with the assistance of AI translation services.