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PSY’s riches from ‘Gangnam Style’ not made at home
Question of the Day
The song sells for $1.29 on Apple’s iTunes Store, the market leader in song downloads. Apple generally keeps about 30 percent of all sales, so the PSY camp could be due more than $2.6 million.
How much PSY keeps and how much goes to his managers, staff and record label is unclear. South Korean industry insiders said PSY likely gets 70 percent and YG Entertainment 30 percent for U.S. downloads.
But earnings from downloads in PSY’s homeland are far from an embarrassment of riches.
South Koreans pay less than $10 a month for a subscription to a music service that allows them to download hundreds of songs or have unlimited access to a music streaming service. That makes the cost of a downloaded song about 10 cents on average. The average price for streaming a song is 0.2 cent.
PSY’s cut for downloads is 14 percent. That falls to 7.5 percent for streamed songs. Yes, 7.5 percent of 0.2 cent. And that’s before PSY’s “Gangnam Style” co-composer take his share. The biggest cut goes to his agent and online retailers.
According to South Korea’s national Gaon Chart, “Gangnam Style” was downloaded more than 3.6 million times and streamed around 40 million times as of November. That adds up to a little more than $61,000.
It’s likely the fast-fading music CD industry generated even smaller revenue. PSY’s 9 percent cut from sales of 102,000 CDs in South Korea would earn him $50,000 or more, according to an estimate by Kim Dong-hyun, a senior manager at Korea Music Copyright Association.
As for many other parts of Asia, illegal downloads and pirated CDS are so pervasive that only a small minority are willing to pay up for the legal versions.
PSY has been jetting around the world, performing on shows such as “The X-Factor Australia” and NBC’s “Today Show,” but such programs usually cover travel costs and not much else, said Gary Bongiovanni, editor-in-chief of concert trade magazine Pollstar.
It is television commercials that are the big money spinner for the most successful of South Korea’s K-pop stars. PSY has been popping up in TV commercials in South Korea for top brands such as Samsung Electronics and mobile carrier LG Uplus.
Chung Yu-seok, an analyst at Kyobo Securities, estimates PSY’s commercial deals would amount to 5 billion won ($4.6 million) this year.
The money is cool. The products not so much. PSY is now the face of a new Samsung refrigerator and a major noodle company.
A fact little known outside South Korea is that PSY’s father, uncle and grandmother own a combined 30 percent of DI Corp., a company which makes equipment that semiconductor companies use to make computer chips.
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