The world of K-pop continues to grow as Korean entertainment agencies focus attention on new endeavors thanks to a changing environment.

K-pop companies appear geared for more diversification in 2016. Media heavyweights recently have revealed steps towards new music practices, with larger companies in place to take a bigger role in the K-pop industry especially as South Korean music agencies face a variety of changes.

Kakao's recent move to purchase Loen Entertainment and its streaming service, MelOn Music, partnered with CJ E&M's ongoing acquisitions of smaller Korean entertainment agencies, reveal a growing trend of change coming to the Korean Wave (Hallyu).

The two companies are major players in South Korea: Kakao is the operator of KakaoTalk, the most popular messaging app in the country, while CJ E&M is South Korea's largest media company.

On Monday, Kakao announced plans to purchase majority shares in Loen Entertainment, a company that houses K-pop artists including IU, History, Sunny Hill, Melody Day, Ra.D, Lena Park, Zia, and more. Loen also is the operator of MelOn, South Korea's most popular online music store.

CJ E&M, is a subsidiary of the larger CJ Group, manages numerous assets, including multiple television channels and entertainment companies. The media company recently acquired the hip-hop label AOMG and also moved to take control of the film and television industry by purchasing other entertainment agencies.

Along with bigger media companies moving further into the music world, K-pop agencies themselves are looking to change things.

According to the K-Pop Herald, growth has slowed for many Korean labels. SM Entertainment, South Korea's largest label, only saw a nine percent growth in sales over the past two years whereas it previously saw growth of about 36 percent each year. Rival label YG Entertainment also experienced a drop in growth: The company saw a 21.1 percent growth in sales between 2012 and 2014, whereas it had seen 56.1 percent growth between 2007 and 2012.

Meanwhile, despite a drop in profits for labels, Korean artists have seen an increase in pay overall. The annual take home for Korean singers jumped 107 percent in 2014, to an average of 55 million won (~$45,000 USD.)

Larger labels like SM Entertainment and YG Entertainment have been making headway for years; both companies have a variety of subsidiaries and diverse rosters including musicians, actors, and entertainers. YG Entertainment also has a variety of fashion and beauty ventures, whereas SM Entertainment continues to focus on growing its media presence through content production and also operates a travel agency.

Other agencies, like FNC Entertainment, have also started to shift away from basing their entire business model on K-pop.

The K-Pop Herald spoke to Lee Nam Joon, a research from KTB Investment & Securities, regarding the differentiation.

"Agencies, whose earnings mainly rely on their celebrities' performances, need to find stable income sources through new businesses," said Lee.

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