Staging a retreat

Girl band SNH48 downsizes from 200 members as cost pressures take toll


Ju Jingyi: regularly tops the fans’ vote for their favourite SNH48 member in the band’s annual ‘election’

Last August, South Korean K-pop sensation BTS broke Taylor Swift’s record for the biggest YouTube video debut, racking up 45 million views for video Idol in just 24 hours. In October, the seven-member band completed the North American leg of their ‘Love Yourself’ world tour with a sold-out performance to a crowd of about 40,000 at the Citi Field Stadium in New York – becoming the first South Korean singers to hold a solo concert at the home ballpark of the New York Mets.

Even though the global popularity of similar bands seems greater than ever, on Sunday, Star48, the management agency behind China’s biggest girl band SNH48, suddenly announced that it’s going to dissolve five out of the 15 ‘sister groups’ within the band. Some of the members will be laid off; others will be reassigned as livestreamer ‘hosts’ (for more on these, see issues 313 and 383) on other platforms.

The announcement has come as a shock to the industry. SNH48, which is the Shanghai spin-off of Japan’s most popular female musical act AKB48, is an all-female group that draws its membership from a rotating line-up. It is also one of China’s most successful girl bands. Since 2014, the company has raked in Rmb300 million ($44.6million) in revenue.

Like its Japanese predecessor, the Chinese girl band, with over 200 members combined, is split into small groups or large brigades which perform songs in local theatres (branded the Star Dream Theatre). The first of these were offshoots in Guangzhou and Beijing, followed by additional ones in Shenyang and Chongqing.

“The restructuring is merely to keep up with the ever-expanding idol market and how quickly the industry is evolving. It is also the inevitable result of survival of the fittest,” Tao Ying, chief executive of Star48, told National Business Daily.

SNH48 makes money by selling concert tickets. Most of its theatres hold 300 people, including standing-room-only spots that sell for Rmb80. There is more to these concerts, however, than ticket sales: fans also spend on merchandise and if they want to take a photo with their favourite performer, ask for her autograph, or hold her hand during the meet-and-greet sessions, they must pay a fee for each of these ‘experiences’.

But it is the annual ‘General Election’ that has traditionally been the biggest moneymaker. Every year, the company hosts what it calls an election that allows fans to vote to keep their favourite members in the group. It costs Rmb35 to cast a vote. Fans can also earn an additional vote by purchasing an album, which costs Rmb78. Those band members who get the highest votes – such as Ju Jingyi – enjoy more prominence at live events and sometimes release solo albums. Ju also got a role in a drama series.

Needless to say, cash-rich devotees have been known to spend big on their idols, says NBD (male rapper Kris Wu being a prime example, see WiC432).

In 2018 Star48 made over Rmb104 million from election revenues alone. But the problem, says Entertainment Capital, is that fans’ spending has not been growing at the same pace as the ballooning size of the band. That’s created a cost mismatch which has dragged down the bottom line. To make ends meet, the company has dramatically cut back the number of shows in less lucrative markets like Shenyang. Instead, it has saved on venue expenses by moving some of the lesser troupes’ performances online.

Still, the biggest setback for SNH48 was Tencent’s hit show Produce 101, which created the girl band Rocket Girls (see WiC416). Tencent’s original intent wasn’t to create a direct SNH48 rival but to develop new talent for its own video platform. It has achieved that goal: Yang Chaoyue, the most controversial contestant on the show, is now a fixture on Tencent’s reality TV dating series Heart Signal.

“Although the two companies’ strategies are completely different, Star48 is now aware of the weakness in its business model, namely, the failure of having access to a platform,” says QDaily, referring to the advantages of access to Tencent’s vast social media ecosystem.

All this has been a concern to SNH48’s investors which include China Media Capital (CMC), CMB International Capital Management, a unit of China Merchants Bank, and Junlian Capital, a venture capital fund under Legend Capital, says QDaily.

“A lot of people think this idol business is very simple and so lucrative,” says Tao, the chastened CEO of Star48. The band’s downsizing suggests it is anything but. It seems that where SNH48 is concerned, big is no longer beautiful.


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