Messaging with aespa: K-pop agencies expand offering for Chinese fans via partnerships

Major K-pop agencies are partnering with Chinese firms. The collaborations aim to tap into the growing streaming market.

Fans of girl group aespa can communicate with the members through DearU bubble, a private chat service operator affiliated under SM Entertainment. [SCREEN CAPTURE]

[NEWS IN FOCUS]

Big K-pop agencies are striking partnerships with Chinese companies in a scramble to capture the country's K-pop market as it rebounds from a rocky period of declining album sales.

Two major Chinese streaming companies, Tencent Music Entertainment (TME) and NetEase Cloud Music inked deals with Korea's Hanteo Global and JYP Entertainment, respectively, earlier this year, with the stated goal of increasing Chinese fans' access to K-pop music and popular acts like aespa and Stray Kids.

TME announced Monday that it would collaborate with DearU bubble, allowing Chinese users to access the chat service — to message K-pop artists — via Tencent's QQ Music. China’s music fans will be able to communicate not only with K-pop acts, but also with an array of Chinese singers who are expected to join the platform.

Although DearU bubble is an affiliate of SM Entertainment, both actors and singers that are signed to other labels use the service to chat with their fans.

Tencent has not yet disclosed when DearU bubble will roll out in China, but say to expect it in the early months of 2025. China’s Android users are currently blocked from accessing the platform; the Google Play Store is banned in China even though Google's operating system has a mobile market share of more than 77 percent in the country, according to market researcher Statista’s September report.

About 70 percent of DearU users are overseas. Chinese members take up the largest chunk, accounting for 35 percent, or 753,000 subscribers, according to the platform’s report based on second quarter of 2024. Meritz Securities analyst Kim Min-young estimated that royalties from the country ranged from 2.4 billion won ($1.7 million) to 89.4 billion won “based on assumed subscription fees and conversion rates” in a report released Tuesday.

The report predicted that the influx of new Chinese users could increase the value of the four major K-pop agencies — SM Entertainment, JYP Entertainment, YG Entertainment and HYBE — by 11.3 percent to 239.3 percent, based on a projected 2025 price-to-earnings ratio of 18.5.

Screen capture of a private chatroom with Winter of girl group aespa [SCREEN CAPTURE]

The partnership could be SM Entertainment's big step into China’s streaming market. Tencent Music houses popular streaming platforms as KuGou Music, Kuwo Music and WeSing, which have more than 800 million active users in total.

Korea's Circle Chart will also begin reflecting TME's real-time K-pop data in its daily charts in November.

Netease Cloud Music has partnered with both Kakao Entertainment and JYP Entertainment to release new K-pop songs from each agency in China and provide access to their K-pop archives.

The new agreements are a contrast to the red alerts that have rung through China's K-pop industry since last year.

China's export volume of audio-related products, including physical K-pop albums, fell 18.7 percent on year to $18.4 million in the first half of 2024. Korea's exports of such CDs fell 2 percent to $133.2 million over the same period, the first downturn in the nine years since 2015, according to the Korea Customs Service.

Despite disappointing album exports, analysts maintain a positive outlook for the K-pop industry, pinpointing streaming as the most important medium for global expansion.

“Core fandoms have led to K-pop artists’ immediate global spotlight after album releases through topping streaming charts and immediate rises in album sales,” analyst Kim Ji-hyun of Heungkuk Securities said in a report. “Now, their influence is spreading to many of K-pop’s light fans. For instance, in the past, K-pop’s presence was limited to certain Asian regions. But as core fandoms grew, they began appearing on popular charts and playlists, positively impacted by recommendation algorithms on major global platforms.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]