In January 2023, South Korea’s Ministry of Culture, Sports and Tourism (MCST) announced a total Korean Won (KRW) budget of 844.2 billion for creating and promoting K-content. The Ministry aims to launch Korea into becoming a first-rate culture enjoyed by the public and appreciated by the rest of the world.
In a press release, MCST Minister Park Bo-gyoon pointed out the reason for such a significant investment in content —
“The K-content industry has emerged as a strong player in the Korean export market sooner than anyone expected.
The value of K-content exports stood at USD 12.4 billion as of 2021, surpassing the value of exports of home appliances, secondary cells, electric cars, and display panels.
As such, K-content has become a new driver of growth, helping to remove some uncertainty in the South Korean economy.”
Content has become a growth driver for the South Korean economy!
But the rise of Korean cultural exports hasn’t been sudden or unexpected. The government has proactively encouraged the export of content, which has bolstered its ability to create a global market for various South Korean products.
According to the Hyundai Research Institute, the positive effects of the nation's entertainment industry are not limited to its culture industry. The institute stated in a report that the Korean Wave has a direct impact in encouraging direct foreign investment back into the country through demand for products and the tourism industry.
It was found that a 1% increase in exports of Korean cultural content leads to an 8.3% increase in Korean consumer goods exports and a 1.9% increase in tourism in the following year. In 2013, the number of tourists visiting Korea exceeded 12 million, with 9.8 million of them coming from Asia. This growing influx of tourists contributed to travel revenues of US$9.7 billion in 2012, marking a three-fold increase since 2007.
The research also pointed out that this directly led to an increase in foreign direct investment (FDI) in the service sector. Korea attracted $16.2 billion in 2012, the largest figure ever, as over half of the investment was poured into the service industry.
Today, exports of Korean culture to China and Southeast Asia continue to rise, riding on the sustained momentum of “Hallyu,” aka “The Korean Wave.”
The explosion of Korean pop culture in fashion, music, and film spurred the Korean Wave in the 1990s. You see, during the period from the 1950s to the 1990s, Korea became a major global power. The succeeding Korean Wave in the 90s not only boosted their economy but also changed the viewpoint of other countries towards Korea.
“Hallyu,” which loosely means “flow of Korea,” was a phrase coined in 2001 by Chinese journalists to describe the popularity of Korean pop culture in fashion, music, and film across Asia. In recent years, the Korea Culture and Information Service (KCIS), a state-run PR agency, has been working extensively on a promotional strategy for Hallyu that reflects varying preferences across regions. South Korea’s broadcast authorities have been sending delegations to several countries to promote their TV programs and cultural content.
In the year 2000, a 50-year ban on the exchange of popular culture between Korea and Japan was partly lifted, which improved the surge of Korean popular culture among the Japanese. Hallyu first spread to Japan and later to Southeast Asia and several countries worldwide, where it continues to have a strong impact. It has affected industries like beauty, fashion, tourism and even medical tourism in the country, where K-pop stars highly affect the trend.
In 2004, the Korean drama ‘Winter Sonata’ created a boom in tourists from Japan due to its rising popularity, which led to a rise in tourism in the country by 35.5% compared to the previous year! Shows like ‘First Love’ and ‘Medical Brother’ also helped attract a young generation of consumers towards Korean Dramas. Interest in Korean food, cosmetics, fashion, Korean language learning, and Korean music is growing as a result of the Korean Wave at an expansive rate due to subsequent digitization and the rise of the internet and social media.
But this growth in its popularity doesn’t explain how the country constantly produces and exports cultural goods at scale.
To understand this, you need to understand how the Korean government plays a key role here.
According to Yung Lee, a Sociology Professor at the University of California, Berkeley, South Korean business and political leaders realized the need for diversification.
While Korean dramas were off the popularity charts in most South Asian countries, there was a language and contextual barrier to entering countries that didn’t share similar ideals, mores, and values as the Asians.
However, music was one of the ways this could be fixed. Post realizing this, the Korean government implemented tax breaks to support the music industry and provided financial support to academics to enhance the genre's popularity.
Additionally, foreign embassies actively promoted South Korean music groups. The real significance lay in the genre's popularity and its ability to expand South Korea's influence and soft power on the global stage. They recognized that the younger generation was primarily interested in South Korean drama and music, prompting them to explore new avenues. Concurrently, a wave of aspiring youngsters was ready to challenge the established order and become the next big thing, which fueled a new wave of cultural products.
The birth of K-pop music
The concerted effort by the government led to a significant elevation of the Korean music industry over others. And if you’re a K-pop fan, you would know that bands like BTS don’t mark the rise of K-pop music.
In the 1950s, The Kim Sisters were a Korean-born pop music trio who spoke no English but achieved fame in the U.S. by performing soulful renditions of American pop songs completely phonetically. Like the K-pop stars of today, the Kim Sisters were extraordinarily talented and impeccably styled.
The Kim Sisters were the first Korean singers to have a song appear on the Billboard chart, and because of their strides, they are considered the first South Korean music group to achieve global fame and success.
Subsequently, the 1970s were marked by a hint of politically charged Korean music, attributed to folk-rock singer and composer Kim Min-ki. Kim wrote the song ‘Morning Dew’: a song that would go on to be the anthem of the youth pro-democracy movement during a time of political strife. Kim Min-ki often used his music as activism, and eventually, his albums were banned because of it.
Post the 1990s, K-pop evolved more into the avatar we see today.
Seo Taiji and Boys is the first band that resembles K-pop music and mega fandom. Seo Taiji revolutionized Korean Pop music by fusing it with American hip-hop choreography, and K-pop was born.
Seo Taiji and Boys were the first-ever “K-pop” group. They inspired many younger Korean artists to make music influenced by other parts of the world.
In the late 1990s, more Korean artists became famous in China and Taiwan. They wanted to be successful in Japan too, and in 2002, when Korea and Japan hosted the soccer World Cup, it helped them get noticed.
One special singer named BoA became very popular in Japan. Her success inspired many other music industry people to believe they could also be successful.
Starting in 2008, K-pop became popular worldwide because Korean companies used international social media platforms like Facebook, Twitter, and YouTube. This made it easier for people from all over the world to listen to K-pop music. Everything came together perfectly in 2012 when Psy and his song “Gangnam Style” became a huge global hit.
Psy was different because he didn't try to copy other popular singers. He stayed true to himself, and people all around the world loved it. Gangnam Style showed that you don't have to sing only in English or follow the latest trends to be successful. The music video and its choreography became so popular that the video got over three billion views on YouTube, more than any other video at that time. It proved that music can connect with people no matter what language they speak.
In the present day, Korean music producers have mastered the art of creating remarkably successful music products.
And believe it or not, there's a well-established process around this.
Similar to the Western music industry, K-pop groups in South Korea were also carefully curated. However, the level of intensity and precision taken in South Korea has been unparalleled.
The process is highly focused, with children being specifically identified and recruited. Between the ages of 10 and 14, you could be scouted and recruited simply because a representative from an agency spotted you at a shopping mall and recognized your captivating appearance!
There are three main agencies that do this scouting, with up to 200 recruits in each agency. There are some smaller agencies as well. All K-pop bands go through this system. The trainees either stay at home or live in dorms and follow a strict routine.
A day in the life of a trainee starts early, around 5 am. They have various training sessions like dancing and singing lessons. Each trainee has a personalized schedule based on their role in the group. After training, they go to school until about 3 pm. Then they head back to the entertainment company for more lessons until around 11 pm.
It's important to remember that these aspiring stars haven't even debuted yet. And once they do, their schedules can become even busier. Sometimes, trainees survive on only two hours of sleep a night.
Younger and more ambitious kids are always waiting to take their place as the next big thing. So they work extremely hard to make sure they succeed and make the most out of their careers.
But over time, this overzealous and competitive culture forced some pop stars to feel trapped, as these contracts extended for an excessively long duration, essentially binding them until they reached the age of 30. In fact, they coined the term “slave contract” to describe the harsh reality they faced.
However, South Korea is enjoying the success of its cultural exports in a way that's not only culturally, but also economically significant.
The entertainment industry has been very proactive in feeling the pulse of the masses and producing appealing movies and dramas. The Korean Tourism Organization (KTO) has made the best use of this huge interest in Korea by offering very attractive tour packages to tourists. These packages involve trips to locations made famous by Korean dramas, travel to exclusive shooting locations, etc.
The Korean government has also built and opened “K-Culture Valley” in Goyang, a Hallyu-inspired theme park that would house everything from film studios, Korean restaurants, and live music concerts to movie galleries, hotels, shopping malls selling Korean celebrity merchandise at a cost of USD 1.2 billion. The theme park is built with the aim to curate all the interesting components of Hallyu for visitors in one place.
The global fashion industry, too, has been significantly influenced by Korean popular culture as more and more Korean celebrities have become intertwined with the fabric of fashion.
Until recently, South Korea was primarily associated with the Korean War, the North-South Korean conflict, struggling chaebols, and the aftermath of the Asian financial crisis and the Seoul Olympics. These images were not particularly positive or glamorous, and the concept of Brand Korea remained elusive to those outside the country.
However, this perception has started to shift with the rise of Hallyu. The cultural wave has presented an excellent opportunity for Korea to showcase its diverse culture, people, unique entertainment products, exotic locations, and its own pan-Asian superstars to the world. Through this cultural phenomenon, Korea is creating a strong brand identity.
One reason K-pop became so popular is because it was new and different.
But keeping things new and exciting for a long time is hard. Despite the Korean government’s support to incentivize the production of cultural artifacts, sustained leverage for Korean brands is yet to be established.
Regardless, I'm pushed to think about how creating a lasting economic impact using cultural products can only be a long-term game for nations that engage in it. Even for businesses that depend on producing content in any form to create leverage, playing the long-term game is inevitable. Content becomes a currency for a nation or business only when it can be scaled qualitatively over a long time horizon to produce tangible economic outcomes. But weighing all this creative effort against its economic impact is something that can only be done over a time horizon of years, not days, or even months.
It's a leap of faith.
Because in the short term, content alone hardly moves the needle in economically significant ways.
But in the long term, content alone can create the kind of cultural influence that makes the product aspirational and keeps the profit needle moving.
