Reality check: How K-pop evolved in the absence of BTS

While BTS — as well as its devoted fandom, ARMY — appears more than ready to pick up right where it left off, the K-pop landscape the band returns to is certainly not what it used to be two years ago.

Between late 2022 and early 2025, during which BTS halted group activities due to military enlistment, the industry experienced both a surge and a stumble. Physical album sales — which have long been one of the industry’s key revenue drivers — peaked to an all-time high, only to face an abrupt downturn, marking the first slowdown in a decade.

The dip rang an alarm bell for some investors: Is K-pop losing its steam?

Now, insert BTS. The K-pop juggernaut is reportedly set to make a long-awaited comeback early next year, while the industry stands at a crossroads caught between lingering skepticism over the sustainability of its business model and rising hopes of unlocking the massive potential that is China.

So, what exactly happened in the world of K-pop during BTS’s absence — and will the group be able to reignite the hype anew?

Shrinking album sales

In 2023, physical album sales of the top 400 albums soared a whopping 50.1 percent on year, surpassing the 100 million mark for the first time ever.

Yet the rally didn’t last. According to Circle Chart, operated by the Korea Music Content Association, the figure dropped 19.4 percent on year to 93.3 million last year, the first downturn since 2014.

Album sales still remain sluggish, as the cumulative number of top 400 albums sold from January to May this year stood at 35.9 million, down 4.26 million units, or about 10 percent less, compared to the same period last year.

What drove the decline?

While answers vary, many pointed out that the downturn is more of an inevitable correction than a crash, especially amidst the absence of mega bands like BTS and Blackpink.

“While there is no single reason to clearly explain the steep rise and fall in album sales, it is largely understood to be driven by fans focusing their spending on album purchases following the liquidity increase during the pandemic,” Hanwha Investment & Securities analyst Park Su-young said in a January report.

Now, fans are spending money on other things, such as concert tickets and goods.

“Live concerts by K-pop artists, which resumed in full swing in the second half of 2023, coincided with a decrease in liquidity to create some kind of balloon effect, bringing down album sales significantly in 2024,” said Park.

In its March report, Goldman Sachs suggested that offline concert audiences — rather than album sales — “are the superior metric to measure the growing reach of K-pop.”

And by that standard, the genre still shows strong momentum for growth, according to the investment bank.

NH Investment & Securities analyst Lee Hwa-jeong also projected that streaming revenue and in-person concerts will gradually replace physical album sales as the bedrock of the K-pop business.

“The growth over the previous five years has been largely driven by album sales fueled by the rapid expansion of the global K-pop fanbase,” said Lee. “But over the next five years, we expect the growth to be led by streaming success following wider mainstream acceptance of K-pop and a concert expansion.”

This shift adds further weight to recent signs that China is potentially easing its restrictions on K-pop. After years of an unofficial ban following Seoul’s decision to deploy the U.S.-led Terminal High Altitude Area Defense system in 2016, an uptick in fan events in mainland China has sparked renewed investor optimism, particularly regarding tour stops in the country.

IBK Investment & Securities analyst Kim Yu-hyuk noted that “the current K-pop growth cycle is being driven by concerts, merchandise and China, with all three factors simultaneously gaining traction,” in a report released on Tuesday.

Based on the number of K-pop group followers on the Chinese social media platform Weibo, Kim estimates that the Chinese market could bring an additional 5.5 million concertgoers annually, which could raise operating profits for K-pop agencies by 9 to 19 percent each.

Rookies take off, fandom expands

Following an era dominated by girl groups from 2022 through 2023, a new wave of so-called fifth-generation boy bands, debuting in 2023 and after, has been making noticeable advances.

Rookie groups from major agencies have gained quite a bit of traction over the past two years, with SM Entertainment’s NCT Wish and Riize, HYBE’s BoyNextDoor and WakeOne’s ZeroBaseOne all becoming million-copy sellers.

“These rookie boy groups have secured their positions now, and are entering a phase where they are proving themselves,” said an industry source who wished to remain anonymous. “Looking at how well groups like Riize and BoyNextDoor are performing on streaming charts, I believe it’s fair to say fifth-gen groups are beginning to take off in the streaming market as well, which has been a weak point for fourth-gen boy bands.”

Still, a key challenge remains: Will the boy bands be able to reach beyond their core fandoms — which have been showing signs of slowdown in quantitative growth — to a mainstream audience?

“Now is the time to expand our focus from short-term marketing strategies aimed at boosting sales within the current, limited fandoms to working to enlarge the overall consumer base by converting casual listeners somewhere between the fandoms and the general public into fans,” suggested Kim Jin-woo, head researcher of Circle Chart.

Pop culture critic Kim Do-heon noted that K-pop’s rapid advances earlier this decade were certain groups’ breakout successes that shouldn’t be mistaken for the success of K-pop as a genre, but also stressed, “there’s still plenty of room for K-pop to grow.”

“As the industry is currently undergoing a reorganization, with the focus now shifting to live performances, concert production will continue to gain significance,” Kim said, adding, “Given that the K-pop industry expands based on their original intellectual property, the potential for adaptation is limitless.”