Is YG No Longer Part of the Big Three in K-pop?

There is a debate about whether YG Entertainment has fallen from the ranks of the Big Three in K-pop. Traditionally, the Big Three refers to the companies that have both helped cultivate legendary K-pop acts from the 1st generation as well as the ones that generate the most income among all K-pop companies. While YG still holds significant ground, the company's recent performance raises questions about its standing in the industry.

The Big Three in K-pop

The Big Three are traditionally known for a dual role—building legendary acts like SNSD, VIXX, Big Bang, Miss A, and 2PM, and being among the most lucrative entertainment companies. However, YG's profitability in 2020 fell short compared to SM Entertainment and JYP Entertainment. Specifically, in 2020, YG recorded a profit of 5.4 billion won, which was less than SM’s 6.4 billion won and JYP’s 40 billion won. Due to this, both YG and SM have seen their profits on par with mid-level K-pop companies, which means they are no longer leading in that aspect.

Reputation and Current Status

Despite the drop in profitability, YG still retains its reputation for launching new and refreshing girl and boy groups. The company has also been lauded for cultivating idols with extraordinary rapping skills and for accepting foreign members. However, this does not guarantee a lasting position in the Big Three.

Market Value and Stock Prices

Financial analysts predict that YG may no longer be part of the Big Three. SM Entertainment leads in market value, followed by JYP and then YG. However, in the previous year, YG held a higher market value than JYP. This year's numbers have shifted, with SM’s market value at 978 billion KRW, JYP at 850 billion KRW, and YG at 515 billion KRW. Additionally, the stock prices of YG have been declining, adding fuel to the debate about its current position.

The Future of YG in K-pop

When it comes to album releases and comeback performances, YG does not compare favorably to JYP and SM. While Blackpink made its debut with a huge impact, YG has been criticized for not providing enough comebacks, leading to a decline in fandom engagement. Other groups like Red Velvet and Twice are excelling with their frequent comebacks and rising popularity.

Strategic Decisions and Industry Perception

Analysts point to several strategic decisions made by YG that have raised suspicions. For instance, the mix9 group, which was initially formed and hyped, was later postponed, missing a potentially profitable debut. In contrast, JYP and SM have been seen as more active, with constant news and updates about their artists. The shift in industry perception is also notable; while 2016 saw a significant amount of news about YG, today, many fans sometimes doubt YG's relevance.

Conclusion

While YG still has a solid foundation in K-pop, signs point to a decreasing relevance in terms of profitability and album performance. Financial analysts and industry watchers predict that YG’s time in the Big Three may be coming to an end, and it will have to work harder to maintain its position in the competitive K-pop market.

For now, YG Entertainment faces the challenge of proving its continued relevance in the Big Three, which includes showcasing strong financial performance, strategic artist management, and consistent comeback releases to engage and grow its fanbase.