On average, there are around 300 K-pop groups preparing to debut each year. Of those 300, about 50 actually manage to debut, and from that 50, only one or two manage to gain any serious recognition and success in their first year.
Needless to say, producing and debuting a K-pop idol group is a high risk - and very costly - endeavour that not everyone can embark on.
According to industry sources, K-pop idols who enter a group don't start competing when they debut - they start competing from the moment they become a trainee. As soon as a trainee signs with an agency, everything becomes a battle about money.
Producing an idol group can cost an estimated 2 billion Won (approx. $2.4 million AUD) - a cost that includes recording the album, promotions, and the sunk costs from the pre-debut trainee period. Even if an agency tries to cut costs, it will still require an investment of at least 1.5 billion Won (approx. $1.8 million AUD).
The number of trainees depends on the size and scale of the agency. Smaller agencies generally have around five trainees, while the big name companies like SM and YG can have anywhere between 20 to 30 trainees on their roster.
Since a company has to pay for its trainee's accommodations, food, and lessons during the training period, the initial training contract period is generally very short. Given that trainee living costs can run up to 30 million Won (approx. $35,000 AUD) a month, trainees generally sign a temporary contract that lasts, on average, six months, and it takes into account situations where trainees may move to a different company or decide that K-pop isn't for them.
Since the costs are so high, small agencies may only hold out for two or so years, and thus will often debut groups earlier than the larger agencies. However, not all agencies are able to successfully manage a K-pop group after their debut. Beyond the debut costs, an agency needs to take into account subsequent costs relating to recordings, production, management, marketing, and promotions. According to a music program insider, it can cost up to 100 million Won (approx. $120,000 AUD) to put a K-pop group on a popular program like "Music Bank", and even then, not everyone can appear. Due to time limits, creative control from the production staff, and the sheer volume of albums that come in every week, music programs generally veer towards showcasing groups that already have an in-built fanbase.
Many industry sources agree that there are only two guaranteed ways to success for a newly-debuted group: be from one of the three big name agencies (SM, YG, and JYP) or get assistance from a survival competition program like "Produce 101". If a debuting group's album doesn't do well, the agency has to absorb the costs, hence why companies disappear very quickly these days.
Given that it can take years just to get one's foot in the door, it is a long and hard road to success. It may seem like the K-pop industry is all about the fame and glitz sometimes, but at the end of the day, it is just a business - and a very expensive one at that.