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[SPECIAL] Business strategies used by entertainment companies!

The K-Pop industry is very interesting topic which can be investigated through a lot of ways, whether it is the marketing factor or understanding its business activities. Let’s look into the many streams of the K-Pop industry and its entertainment companies to get a better idea of how they run their businesses! Let us be on our way, my fellow businessmen and women!


Most entertainment companies are Private Limited Companies, meaning that they have limited liability. Limited liability is when the amount of money the companies might lose is only limited to the amount they invested in the first place. In other words, they would not have sell their own possessions in order to pay for debts owed by the company!

Also, the company would have a separate legal identity from the owners of it, meaning that even when the owners die, the company would still exist (yay!). This ensures continuity for the business.

However, some companies would chose to IPO (Initial Public Offering), which is when the shares of a business are offered to public investors and shareholders as well. This would allow the business to grow in size in the future, but this could cause the business to lose control because there are new shareholders (oh no).

Examples: SM, YG, 1theK, Key-East




Ever wondered why people in the company, whether it is the idols or the employees, work for the company? This is called motivation which are the reasons why employees want to work hard and effectively for a business. Some of these can be:

Money– to pay for necessities and some luxuries (we all obviously want to buy K-Pop merchandise, duh)

Social needs (affiliation)– feeling part of a group/organisation, meeting people, and meeting friends at work.

Esteem needs (self-importance)– feeling important and that the job you do is important. Idols often like the feeling of fame and attention!

Job satisfaction– enjoyment derived from the feeling that you have done a good job

Security– a sense of security (e.g. knowing that you job and pay and safe and that you are unlikely to lose your job)

asian office workers

Ways of being the leader!

There are many leadership styles. There is autocratic leadership where the manager expects to be in charge of the business and to have order followed, or democratic leadership where employees are involved in the decision-making process or even laissez-faire leadership [leh-seh-feh] (meaning “let-do” in french) where objectives are known to the employees but they are then left to make their own decisions and organise their own work. Most of the companies use autocratic leaderships.


Promoting Idols 

The role of marketing includes many fields. This can include identifying customer needs by finding out what customers want, whether it is a group going in the innocent style or hip-hop style or others. They then need to use this information to satisfy customer wants, whether it is producing idol merchandise or debuting a new group.

However, the market is always changing, and companies would need to anticipate this changes and be ready to react to them! These changes can occur because of changes in customer tastes and fashion. During the 1980s, ballads were very popular, so companies would have considered debuting ballad duos or groups to suit this taste during the time. Recently, many groups going in the innocent style have debuting, including Lovelyz, G-Friend, Berry Good, OH MY GIRL, and many more. Companies might want to differ from its competitors by debuting a hip-hop girl group to attract new fans!

promoting idols

Increasing audience/fans 

K-Pop used to only have a niche market, meaning that the range of audience which are being aimed at are very small, usually specialised, and a segment of a much larger market, which might just be pop music. K-Pop used to be only listened to by mostly Koreans and was rarely known by international fans.

Nowadays, the market has increased into a mass market which is when there is a very large number of sales in the services, in this case, idols. The target audience has spread towards international fans from China, Japan, USA, Canada, Indonesia, and many more. This has been achieved through the releasing of English, Chinese, and Japanese songs of K-Pop songs which has managed to reach out to a more worldwide audience! Good job to entertainment companies!


Being unique 🙂 

Being unique and being different from other groups can be quite important to idols! This can otherwise be known as the USP (Unique Selling Point), the special feature which differentiates the product/idol from other competitors and groups. This would mean that the business would be the first to debut this style of group/singer, and might even help to attract new fans because of this new style. For example, female hip-hop groups are quite rare and debuting a group like this might make people want to becomes fans.


About Vivien Tam

Chief Editor of NowKpop Marketing Manager of iPopCon Media

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