The Echo-nomist

Unless you’ve been living under a rock, you would have heard a lot about K-pop bands, Korean movies (like the Oscar winning Parasite) and Korean TV shows (for example- Squid Game) over the past few months.

The Korean entertainment industry has been gaining worldwide recognition and is attracting a global fanbase. It has provoked the audience to explore Korean culture. Korean skincare products have benefited from this and are widely popular in Asia. Think: Korean sheet masks…

It’s 2012 and everywhere you go, Gangnam Style is playing. Everyone knows the dance. It was the first YouTube video to receive more than 1 billion views (it currently has 4.2 billion views!). Since then, the Korean culture has seen a dedicated and growing fanbase. YouTube has been a vital platform in the increasing popularity of K-pop.

Hallyu

The phenomenal growth of Korean culture and popular culture encompassing everything from music, movies, drama to online games and Korean cuisine is termed as Hallyu. It’s a Chinese term, which literally translates to “Korean Wave.”

South Korea is one of the only countries in the world that has a dedicated goal to become the world’s leading exporter of pop culture. This is a way for them to develop their “soft power.”

Soft power is the use of a country’s cultural and economic influence to build it’s international reputation instead of military power (even though South Korea has a strong military). For example, US was able to entice the world to buy its Levi’s jeans, Apple iPhones etc. by leveraging on a desired image. A unique image of cool. It’s a phrase coined by Dr Joseph Nye in 1990, a Harvard political scientist.

South Korea’s soft power lies in its music genre (the beloved K-pop), movies and tv shows, brands and more. They have a greater impact on Korea’s economy than you’d imagine. Let’s take a look at the specific impact each of these have had.

K-pop

The perfect balance of catchy songs, flashy choreography, and charismatic memebers with clearly distinguished personalities. That’s K-pop for you…

When I say K-pop, the first thing that comes to a lot of people’s mind is BTS. South Korean pop music has an undeniable impact on their economy. The economy was first aided greatly by the release of ‘Gangnam Style.’ You can say, it was one of the most important moments for K-pop as it was the first time the Western world got to experience and appreciate it.

In recent times, the Korean boy-band BTS has become immensely popular, Their fanbase, also known as ARMY, has gained more than 40 million fans. According to the survey, ARMY consists of fans from over 100 countries and territories. They are somewhat responsible for the global recognition of K-pop. Many other Korean bands have a large fanbase across the world including: Seventeen, NCT, Stray Kids, Blackpink, G(I)-DLE etc.

BTS is responsible for gaining the South Korean economy $4.9 billion (around 5.6 trillion South Korean won) in a year. They have topped the Billboard charts and broken records- including most YouTube views within 24 hours, longest charting song etc. An online concert held by them, during the pandemic, brought in $70 million in ticket and merchandise sales. In Oct’19, they held three concerts at the heart of Korea, Seoul, which is estimated to have generated 922.9 billion South Korean won. It’s sort of a ripple effect. BTS’ popularity is drawing attention to Korea and other K-pop bands. When people become interested, it fuels tourism to Korea, study of Korean language, interest in their movies and K-dramas, fashion, food and the rest of it. (source: NPR)

It’s not just their music. When someone becomes popular at such a scale, brands and endorsements rush their way. Sometimes it’s a drink and in other cases it can be a car. BTS also tied up with McD for the mega-hit BTS Meal. It has been speculated that these endorsements, earn South Korea about $3.6 billion.

K-pop has also given a boost to entertainment houses in the economy. SM Entertainment owns NCT, Girls’ Generation and SHINee and has reached global sales revenue of 320 billion South Korean Won. YG Entertainment, the owner of Blackpink, is estimated to worth $32 million. JYP Entertainment also has several K-pop groups such as TWICE, Stray Kids etc. And last, but not the least, BigHit Entertainment, the owner of BTS, is worth about $3.2 billion. The impact of their soft power is evident since BigHit was close to insolvency in 2007 and now they’re a unicorn (source: IFHE research paper).

Recently, the South Korean Ministry of Culture, Sports and Tourism projected that “Dynamite” (BTS’ single), alone could generate $1.43 billion of economic activity and nearly 8,000 new jobs (source: McGill Business Review). If that’s not enough to convince you about the success of this industry, then I don’t know what is.

Movies and TV Shows

‘Parasite’ is one of the most popular South Korean movies. It was the first, and so far only, foreign film to win Best Picture in the Oscars in 2020. The film industry in Korea has grown into one of the world’s most active markets through the development of multiplexes and the popularity of the movie-going culture. In 2019, the Korean film market was estimated to be around $5 billion according to the Korea film council. Then COVID hit. And it wasn’t such a negative thing. Over-the-top (OTT) took over cinema viewings and movie releases. It changed the Korean film industry and opened up new markets for them. OTT helped break barriers and they were able to reach a wider, global audience. In 2018 alone, OTT contributed 240 billion Won to the GDP of Korea.

It’s not just movies, Korean TV shows or K-dramas have also earned viewers because of their visual and emotional appeal. There are at least 80 K-dramas to watch on Netflix UK alone. Some of the popular K-dramas star K-pop idols. For example, ‘Hwarang’ starts BTS member Kim Taehyung (V) which has definitely added to the overall success of the show.

Most recently, a Korean TV show was released on Netflix. You’ve probably heard the name because of the influx of memes related to it. If you guessed Squid Game, you’re right. They’re on track to become Netflix’s most watched show across any language. A whopping 625 million hours of the show was viewed within the first four week of its release on Netflix (source: abc) . To give you an idea about just how much that is, its tied with Bridgerton season 1 as the most watched series. It’s crossed shows like Money Heist, Stranger Things, You etc. Squid Game is also the only Asian show on this list.

Movie and TV industry also gives a boost to tourism. The obvious income is the money spent on shooting, hotel rooms for the cast and crew, exploring different shooting locations. But there is also an implied income. The Korean Tourism Organisation (KTO) has made the best use of this huge interest in Korea by offering attractive packages to customers. These packages involve trips to shooting locations made famous by your favourite K-dramas and movies. They built on this interest and opened theme parks with all the interesting components of Hallyu for visitors. The money earned from travel has taken a hit due to the pandemic, but it’s starting to go back to pre-pandemic levels.

Brands

South Korea’s industry also depends on electronic industries like Samsung and LG and automobile industries such as Kia Motors or Hyundai Motor Company. These are multinational companies that have expanded their operations tremendously and are known by people around the world. All in all, the automobile industry in South Korea is the fifth-largest producer of passenger cars in the world. The value for automobile trade from South Korea stood at $43 billion in 2019 (source: Asiascot). Samsung is a large producer and exporter of chips. If you’ve been keeping up with the global chip shortage, you know the role Samsung is playing. They’re the world’s biggest chip and smartphone maker. Fulfilling the crunch in the market has been an overall positive situation for them as their profits are forecasted to jump 53% (source: BBC).

Where demand exists, supply follows. South Korea understands the potential its soft power yields and how it can pave the way to become a financial power. In 2020, the National Assembly allotted $429.7 billion (a 9.4% increase from 2019) to fund their cultural ministry’s activities. The immense value of this investment speaks to the government’s desire to further cultivate its brand of pop-culture that has continued to evolve alongside ever changing trends without missing a beat.