Love by Numbers: The Parasocial Financing of K-pop
Whether you are an active K-pop fan, a passive enjoyer of mainstream songs, or a die-hard sceptic, there is no denying that K-pop is a fascinating part of the entertainment industry.
Korean pop music is the dominant branch of the Korean entertainment industry and is growing in popularity worldwide, with groups like BTS, BLACKPINK, Stray Kids, and TWICE standing out for their visuals, performer roles, and fan culture. From music videos with intertwined storylines and flashy outfits to sold-out concerts, fan-signing events, photocards, commercials, and v-lives, K-pop spans multiple forms of content consumption, drawing an audience known for its loyalty to performers better known as “idols”.
INTRO: Unique traits of the K-pop industry
The K-pop industry is captivating from both financial and artistic perspectives. Financially, 4 major labels dominate the industry, with a collective market share of 71%, namely SM, HYBE, JYP, and YG.
Along with smaller competitors, these four entertainment companies recruit, train, produce, and manage stars for television, film, and, most notably, music. Labels train their recruits alongside industry professionals for many years, then decide to launch those who are ready, either as part of a group or as a solo artist. These investments also come with restrictions for the trainees, who are famously subject to “no-dating” clauses in their contracts, extreme diets and intense promotion periods for new releases.
From an artistic point of view, K-pop seems to flip the role distribution characteristic of Western music. The artists are often not the drivers of the concepts that they end up performing, but rather the actors who play the perfectly engineered role of an idol: perfect skin, sharp dance moves, perfect outfits, colourful hair, charisma and confidence, all put together by a big team of producers, choreographers, make-up artists, stylists, and social media managers. These jobs are not unique to the K-pop industry, but their importance is. This isn't a criticism of the quality or execution of the idol image, but the highlight of a captivating idea: K-pop as a continuous performance rather than self-expression.
This leads me to question the authenticity of the feelings portrayed in K-pop performances. Have these artists felt the motivation, heartbreak, lust, and hunger that they sing about so perfectly? Or is this a well-engineered play, meant to convince the audience that the idol on stage has explored the depths of emotional dependence while being contractually forbidden from sustaining romantic relationships?
In an industry that does not place the performer at the centre of the creative process, fans still become deeply attached to idols and the images they project in public. This attachment is then channelled and “tested” by the industry via financial commitment from the fans.
But what transforms this wish to be emotionally close to the people you admire into a financial incentive? Why does admiration come with a paycheck? And why are we so willing to pay for it?
SIDE A. Financials of love - how attachment creates demand in K-pop
Although the creative process does not require the idols' personal involvement, fan interactions seem to do the opposite. The K-pop industry has developed clever methods to cultivate and maintain a dedicated fanbase. The most striking of these methods is the complex task of building a strong one-on-one relationship between idols and fans.
Through hours of personal video calls with idols, personalised text and video messages, private chat apps, and fan meetings, idols become long-distance companions meant to support their fans through tough times, challenging relationships, and to celebrate their happiest moments alongside them. An idol thus becomes a being that exists only for fans, or rather for each individual fan, so as not to cause jealousy.
This role comes with restrictions. Idols do not have a public life outside of being idols, they do not have opinions on social and political trends, nor do they have romantic partners they can be seen out in public with. Backlash strikes when an idol is proven to be in a romantic relationship, as with Karina, the leader of the girl group Aespa, when her relationship with a Korean actor was made public by their agencies. Idols exist in an illusion of emotional codependence with their fans, a parasocial illusion.
This is where the financials of attachment come into play. Because of this emotional codependence, the lines between artists and fans become blurred. When attending a concert feels more like supporting the achievements of a good friend, secret crush, or long-distance life companion, prices are all justified, no concert ticket is too expensive, and no city is too far away.
Economics analyses this phenomenon through the lens of the endowment effect, which describes the fact that “people tend to value items that they own more highly than they would if they did not belong to them”. These small but highly personal online interactions between fans and idols thus increase fans’ utility of “buying” more of the same experience, since they already feel as if they own it. Adding these strong personal feelings to your utility function increases the happiness you derive from being an active K-pop fan. This acts as an incentive to keep performing as one by flying to concerts, buying merch, and dressing up to match the idols’ visual style, all of which increase spending on “playing the part”.
SIDE B. Supplying love - the big 4
Idols, unlike artists in other countries, are created and sustained by one of the 4 major K-pop companies. After meticulous selection during auditions or talent scouting, those recruited become trainees, and the companies spend up to $30k per month to train each future idol. This high cost reflects an investment in the future revenue these idols will generate for the company. The labels’ willingness to pay this price is both a blessing and a curse for aspiring idols, as the perks come with high expectations for the trainee’s future financial performance.
For companies, an idol is a product in which labels invest in hopes of future profits, a corporate decision. Much like Apple controls the hardware, software design, packaging, and retail of every iPhone, K-pop labels control the personality, look, weight, online presence, and social life of their “inventions”. Apple also designs users’ interactions with its products through software and Siri programming. Similarly, K-pop labels design and closely monitor the idols’ interactions with fans. In this economic model, idols are not artists in the usual sense.
The design choices go so far as to assign roles to the members of each group, roles that define each member's accepted behaviour. The main roles within groups are leader, main dancer, lead dancer, main rapper, lead rapper, lead vocalist, centre, and visual, with special attention paid to the oldest and youngest members, the latter also known as the “maknae”. These roles define expectations, homogeneous across groups but different from fellow members. For example, the maknae is expected to be cute, with a pure heart and a joyous appearance, meant to be protected by their fellow members. The oldest, who is usually also the leader, takes on a parental role, defending the group and intervening in conflicts.
All of this ensures that labels supply the perfect idol to the market, one that can match their fans’ need for connection and their firm’s predicted future revenue.
OUTRO: Rationality?
Supporting your favourite artist is not irrational, no matter which country or industry they come from. K-pop stands out as an industry of contrasts: individual attention to millions of fans, personal attachment to an impersonal act, engineered creativity and contractually forbidden love. This system commodifies feelings and turns them into goods to be traded. In contrast, economic theory treats feelings as an indicator of utility, not as a good to be traded itself. Thus, K-pop pushes beyond classical economics and challenges us to redefine the boundaries of rationality in decision-making.
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