YG vs. SM: Different Album Sales Strategy

With YG Entertainment’s recent entry into the Korean stock exchange market, more specifically known as the Korean Securities Dealers Automated Quotations (KOSDAQ), it has amped up its rivalry against an equally well-known label and one of the pillars of K-Pop: SM Entertainment.

With competition culminating to its very height, especially with the year-end music award ceremonies just a few weeks away, the two giants of Korea’s music industry should be briefly examined in its achievements over the past year. To start off, SM Entertainment houses some very familiar names in the K-Pop world with f(x), Super Junior, DBSK, and SNSD to name just a few. However, YG matches this with Big Bang, 2NE1, and Gummy, along with a wide range of talented musicians. 

Now, regarding album sales, YG takes the lead in sales online, with more people downloading YG Artist’s songs, but offline, SM Entertainment has the upper hand with people buying more of their Compact Discs (CD’s).

Starting with YG, from January 2011 to November 2011, the Gaon top 50 hit singles chart contains more than 10 YG songs every month; this accumulates to 20% of every top 50 song coming from this label. For example, the song “Hyped Up” by GG (the group formed by Park Myung Soo and G-Dragon for Infinity’s Challenge’s Song Festival) was written and produced by G-Dragon wrote and featured Park Bom’s vocals and ranked 2nd place of the month of July. Furthermore, Park Bom’s solo song “Don’t Cry” ranked 4th overall in April and her group 2NE1 qualified for 5th with their hit-single “Lonely” in May.

Now with SM Entertainment, their singer’s placed high as well, with f(x)’s “Danger” placing 6th in the top 50 charts in April while their “Hot Summer” ranked 23rd in June. However, the remainder of SM’s artists, such as DBSK, Super Junior, and SNSD failed to enter the top 50 range digitally.

However, this is where it starts to get interesting- the artists mentioned above who failed to enter the online charts’ top 50 garnered a heavy amount of success offline, accumulating 30% of the top 20 albums sold by retailers, which means that on average, more than 100,000 albums were sold by SM Entertainment. In particular, three SM artists managed to achieve an astounding 200,000 records sold by November. In YG’s case, Big Bang and 2NE1 hold the front very well, with both groups familiar with the top spot on music rankings and record sales, with Big Bang’s fourth album massing over 100,000 CD’s sold. 

More specifically, this difference in popularity online and offline regarding album sales and the resulting contrast with the two labels comes down to strategy. Indeed, YG Entertainment’s 2NE1 employed the tactic of releasing a digital single within the span of every month, thereby ensuring each song’s placement in the top 10 of music streaming sites thus maintaining their popularity. And yet, SM Entertainment deployed Super Junior’s well-anticipated album (the last one released a year-and-a-half ago) which led to over 300,000 records being sold. Even with this huge landmark, the group quickly released their repackage album which massed 130,000 CD’s sold. This tactic was again used by SM’s DBSK, which again reaped financial awards as well a soaring in popularity.  

Of course, just with a mere comparison of the online/offline sales of the two recording companies does not mean the superiority of one over the other can be fully concluded. There are many factors to be taken into account in order to fully comprehend the influence and might of both YG and SM Entertainment, one being the Hallyu wave. With K-Pop now reaching overseas, both labels have managed to accumulate over 7 – 9 million U.S. dollars in sales from concerts, fan meetings, and of course, record sales. Rivals being rivals, these two giants of K-Pop will no doubt collide once again in 2012, with new groups, new songs, and new surprises waiting just around the corner. 

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