K-Pop has become a global phenomenon across the world. It has become a cultural and economic machine which is one of the driving forces for the impact of Korean entertainment. In order to have such an impact, a lot of planning goes on behind the scenes. Behind every dazzling stage, captivating music video, stage outfit, video content release, and more, is a company with teams dedicated to guaranteeing the success of a particular artist.
These companies are of different scales and carry varying levels of influence in the industry.
Some of the most stand-out companies that you might've heard of include entertainment agencies such as HYBE Corporation, SM Entertainment, JYP Entertainment, and YG Entertainment, just to name a few.
These specific companies are known for being the top companies in their field and are credited for birthing some of the most prominent K-Pop groups that ever existed and having the biggest impacts on the Korean entertainment industry. In fact, they're referred to as the 'Big 4' (previously known as the 'Big 3' - more on this later) for this very reason.
Today, we'll take a look at some of the success factors behind the top K-Pop companies in the industry over the years.
What is the 'Big 3/Big 4' in K-Pop?
The term 'Big 3' refers to the top K-Pop companies with the most market capital share and the biggest impact on the K-Pop industry. The term 'Big 3' was derived to give well-deserved credit to the companies SM Entertainment (which is home to groups like NCT and Red Velvet - founded by Lee SooMan), JYP Entertainment (which is home to groups like TWICE and Stray Kids - founded by Park JinYoung), and YG Entertainment (which birthed artists like BIGBANG and BLACKPINK - founded by Yang HyunSuk).
Subsequently, HYBE Corporation (home to groups like BTS and SEVENTEEN - founded by Bang SiHyuk) entered the top ranks for their impact on the industry, and the nickname has since been changed to the 'Big 4'.
The Establishment of the Big 3 and the Original Companies in the Top Ranks
Whilst we've mentioned the current companies in the Big 3, there are other entertainment agencies that also once held a spot in the top ranks of the industry. In fact, the term 'Big 3' was only established in the early 2000s. Whereas, the K-Pop genre started in 1992.
Some fans believe that there are some companies that would've been considered part of the 'Big 3' if the term had existed earlier. For example, DSP Media (which birthed artists like KARA and MIRAE - founded by Lee HoYeon) is known as having been a top company in its prime, rivaling SM Entertainment. They had quite a big impact on the entertainment industry from the time before the term 'Big 3' was even created.
It is important to note, however, that some fans believe that the term 'Big 3' is reserved for SM, JYP, and YG Entertainment. Therefore, these companies will always be included in the term regardless of whether they perform well compared to other companies or not. They believe that it is an honorary title as opposed to an ongoing ranking.
However, for the sake of this article, we'll look at some of the companies that are in the Big 3/Big 4, and the companies that have or had the potential to be part of it based on rankings.
A Brief Look at the History of the Big 3 Companies Still Holding Their Place in the Top Ranks Today
If one had to identify the company that established the number one spot in the original Big 3, it would be SM Entertainment.
JYP Entertainment joined the ranks of the original top 3 K-Pop companies following SM Entertainment and thereafter YG Entertainment joined the race.
These companies held these three spots from the early 2000s into the 2010s. They are still in these positions as of the 2020s, too.
Top K-Pop Companies That Held the Fourth & Fifth Rankings
Other companies have also made occasional appearances in the top rankings or remained steadily in the fourth and fifth spots over the years.
According to the KRX, FNC Entertainment (home to groups like SF9 and P1Harmony - founded by Han SungHo) overtook the third spot of the Big 3 ranking in 2015, influenced by their entrance into the Public Stock Market (KOSDAQ). Thereafter they saw a great increase in market capital following events like the debut of N.Flying, and the entry of personalities like Yoo JaeSuk, Ji SukJin, and more into the company. However, JYP Entertainment reclaimed its spot in 2016. The two companies were neck in neck for sometime after that but JYP held its place.
Additionally, CUBE Entertainment stayed in fifth place in the market capitalization ranking during this time. They then took over the fourth spot in 2019 with FNC Entertainment moved to the fifth spot. This is all before HYBE Corporation entered the top ranks in 2020.
The Current Status of the Top K-Pop Companies
The Transition to the Current Big 4 and Current Ranking
Originally, as we mentioned above, the term for the top K-Pop companies used to be strictly 'Big 3'. However, due to BIGHIT Entertainment's (the initial company name before expanding to HYBE Corporation) rise to success, the need for the fourth spot in the ranking to be acknowledged arose. Hence the term 'Big 4' was born.
As of 2022, these were the biggest companies in the K-Pop industry:
Note: the figures mentioned below are estimates.
Cube Entertainment (home to artists like BTOB, (G)I-DLE, and more - founded by Hong SeungSeong) recorded a market capital of $263 million. This places them in the ranking as the fifth biggest K-Pop company.
YG Entertainment came in fourth place in the ranking with a market capital of $865 million.
JYP Entertainment came in third place in the ranking with a market capital of $1.56 billion.
SM Entertainment came in second place in the ranking with a market capital of $1.57 billion.
In the first place of the ranking, as of 2022, is HYBE Corporation with a market capital of $11.3 billion. They have placed quite the gap between themselves and the rest.
Contributing Factors to the Success of Big 4 Companies
Whilst market capital might be a defining factor of what makes the top companies so successful, it's important to look at other factors that guarantee these companies' place at the top. Let's look at a couple.
Company Divisions, Sub-Labels, and Subsidiary Companies
If you take a look at some of the most successful companies, they all have diversified business portfolios. These include divisions, overseas branches, sub-labels, and subsidiaries.
This helps the umbrella company to make money from different fields within the industry and appeal to different target audiences, expanding its reach.
For example, SM Entertainment has divisions like SM Studios which includes companies like KEYEAST, Mystic Story, and more.
JYP Entertainment has SQU4D (in charge of girl group NMIXX), Studio J (in charge of bands like DAY6 and Xdinary Heroes), and more.
YG Entertainment has divisions like YG Plus (for models and actors), The Black Label (in charge of artists like Jeon SoMi), and more.
HYBE has sub-labels/subsidiary agencies that they started and acquired like ADOR, Pledis Entertainment, Source Music, and more.
It is a common strategy for companies to acquire or merge with other companies and expand their force in the industry. For example, in early 2022, RBW (which birthed artists like MAMAMOO and ONEUS) acquired DSP Media. Similarly, Play M and Cre.Ker Entertainment merged to form IST Entertainment Corp (home to groups like THE BOYZ and Apink).
Some companies even have branches in different countries like HYBE America, SM Japan, JYPE China, YGEX (Japan), and more.
Loyal Company Fandoms And Fan Assurance
In some cases, fans might even stick to being fans of artists from a certain company because they enjoy their management style or ethos. For example, in K-Pop it's common for fans to be a 'HYBE fan' and be a fan of some or all of the artists under the corporation and its sub-labels. For example, a fan who listens to BTS, ENHYPEN, and NewJeans could be considered a HYBE fan regardless of the fact that all of these groups are under different sub-labels.
Additionally, some fans prefer to join fandoms of groups from the Big 4. Groups under these companies are seen as safe to stan for several reasons. Some reasons include the fact that these companies provide excellent marketing for their groups (which allows them to become globally acknowledged), create diverse content for fans to enjoy, the groups are less likely to disband due to a lack of popularity, and more. This makes it easier for fans to support their favorites and rest assured that they will be able to stan them for several years.
These are just some of the reasons that these companies are so successful.
What do you think of the companies that were and are now in the big 3/4? Do you have a company whose artists you particularly like? Let us know in the comments.