The K-pop music industry sees new groups debut at a rapid pace, but few achieve the commercial success of Blackpink. So when contract renewal time came for the massively popular girl group, it sent shockwaves through their label YG Entertainment.
In September, YG saw its stock tumble over two trading sessions on reports that three of Blackpink’s four members would not re-sign with the company. This represented a major potential loss for YG given how reliant it had become on Blackpink’s commercial dominance.
However, YG’s share price rebounded as the year progressed. Further updates emerged indicating the group would continue activities together under YG even if individuals inked non-exclusive deals.
Wall Street analysts offered mixed takes on these contract developments. Some felt YG needed to diversify its roster more like competitors. But others believed the market had already priced in star departures, easing earnings uncertainty.
The stakes are routinely high for K-pop labels each time top groups reach the standard seven-year contract milestone. Idols typically sign exclusive long-term deals as trainees and debut under one banner. If a hugely successful act parts ways, it costs labels dearly, given the millions poured into training programs.
Blackpink in particular has generated immense commercial returns for YG through achievements like headlining major international festivals. While details remain unconfirmed, it seems the “seven-year curse” will be avoided for now through an innovative new deal structure. How Korean entertainment firms like YG manage contract renewals will strongly influence their prospects in the cutthroat K-pop industry.