Korea's Key Influence in Global Entertainment

Published 11/07/2022 in Scholar Travel Stipend
Written by Daniel Lee | 11/07/2022

The advent of streaming and AR/VR has represented a dramatic change in the entertainment industry as the manner in which consumers consume media has been disrupted. However, another dramatic seismic shift lies within the content that consumers choose to consumer. Aided in part by the technology, the world has chosen a new genre entertainment, and one that is in line with the proverbial phrase, “The Future is Asian”.

When COVID-19 spread across the globe, the first of many events that were cancelled were live concerts and screenings. This dealt a massive blow to the countless artists, theatres, concert venues, production companies and recording studios that all rely heavily on ticket sales as their primary source of revenue. However, like many other sectors, the entertainment industry adapted and one country that stands out amid the disruption & transformation is South Korea, which has capitalized on the success of Korean drama and Korean pop music (commonly referred to as “K-drama” and “K-Pop”). The rising popularity of Korean entertainment is one of many signs that Hollywood is no longer the sole purveyor and gold standard for global entertainment, rather the rest of the world has caught on. As the Milken Institute states in its mission statement, the access to resources required to create “ever-expanding opportunities” has allowed for the globalization of Korean entertainment to become an influential juggernaut on the world stage.

Masayoshi Son, founder and CEO of the global tech investment firm, SoftBank Group, predicted in a March 2019 CNBC interview that the advent of artificial intelligence and automation will allow society to shift its attention and resources away from manual labor and direct it towards the arts and entertainment.[1]  As the world exits an extended period of social isolation, the Korean entertainment industry is poised to ride several secular tailwinds, become a larger contributor to the country’s economic growth and play a larger role in our leisurely lives. However, much of the success that Korean cinema and K-Pop has experienced is a process that is more than two decades in the making. Bong Joon Ho, the director of 2020 Best Picture Parasite, also directed The Host (2006) and Snowpiercer (2014), the latter which starred Chris Evans and Tilda Swinton. Famous K-Pop groups Super Junior debuted in 2005, Big Bang debuted in 2006, Girls’ Generation and Wonder Girls debuted in 2007. Since then, South Korean entertainment companies have slowly amassed a war chest of capital through organic growth and tapped into the public markets. The three largest talent agencies, JYP Entertainment, YG Entertainment, SM Entertainment have all gone public to utilize the debt and equity capital markets and ramped up their capital investments and strategic partnerships even throughout the pandemic, ensuring that they will have an even wider global presence when the world emerges out of the pandemic. HYBE Corporation, formerly known as Big Hit Entertainment and primarily known for creating and commercializing the seven-member boy band BTS, went public in October of 2020 and recently acquired Scooter Braun’s Ithaca Holding, the media conglomerate that represents American artists like Justin Bieber, Ariana Grande, Demi Lovato, and Thomas Rhett. Such mergers and acquisitions have become increasingly common as the Korean Music industry has become increasingly intertwined with the U.S. Music Industry. HYBE also announced a partnership with Universal Music Group to form a new K-pop boy band and air its global audition program in 2022. CJM ENM, the South Korean production company behind Parasite, also partnered with HBO Max to launch an audition program in Latin America to create a K-pop style boy band. CJ ENM also committed ~$4.5 billion of capital towards creating new content over the next five years and made a minority equity investment in SkyDance Media, an American media company that has produced film franchises like Terminator, Mission: Impossible, Star Trek, and Top Gun.[2], [3] SM Entertainment, which represents labels like Girls’ Generation, Red Velvet, and Super Junior, announced a partnership with MGM Television to create and televise an audition program to select members of a new boy band called NCT-Hollywood.

However, mere investments and partnerships are meaningless unless the products are able to generate revenue and consistently rank above its American counterparts. BTS and BlackPink are doing just that, with their songs landing on the Billboard top 100 rankings. Parasite’s Best Picture nomination surprised Hollywood since no foreign film had ever taken home the prestigious award. Such successes have even compelled American artists to collaborate with Korean artists as seen in BlackPink’s collaboration with Selena Gomez, Lady Gaga, and Dua Lipa as well as BTS’s collaboration with Ed Sheeran, Nicki Minaj, Steve Aoki, The Chainsmokers and Halsey. It was also announced in July that Chan-Wook Park, a South Korean filmmaker known for The Vengeance Trilogy, will direct an American TV series starring Robert Downey Jr.

The adoption of K-pop and Korean drama/cinema has been a source of pride for many Koreans, but has also taken many by surprise. What was brought to my attention from the conversations I had with young adults in Korea is that many Western fans do not understand the Korean language, but seem to enjoy their songs. Yet when I think of my parent’s generation, they avidly listened to The Beatles, Anne Murray, Celine Dion, and Michael Jackson, without any fluency in the English language, but were captivated by the musical elements of the songs and charisma of the artists. This time is similar in nature with the exception that the Korean government has ramped up educational opportunities to bridge the linguistic gap. King Sejong Institute, a Korean language education center run by the Korean government launched a new program to teach the Korean language to Chinese, Vietnamese, Russian and Indonesian native speakers using K-pop music videos and K-dramas.[4] Often times, many students are attracted to such language courses to immerse themselves into a culture they discover through different entertainment channels. The Korean government has also fostered and embraced this wave of popularity in Korean culture (a movement which has a term of its own – Hallyu) through subsidies and tax incentives to talent agencies that train artists and actors/actresses. They’ve even gone as far as permitting the deferral of the country’s compulsory military service for members of BTS.[5] Because all men in South Korea are subject to compulsory military service (ranging anywhere from 18 to 36 months), the government has offered to delay the duties of K-pop stars so as not to disrupt their careers. Such exceptions are incredibly rare and only offered to classical musicians and athletes who earn a medal in the Olympics or win a Gold Medal in the Asia Games. Such unprecedented monetary and political support has helped not only the country benefit, but also helped propel K-pop and K-drama onto the world stage.

[1] SoftBank's Masa Son: We've already invested $70B in Vision Fund https://www.youtube.com/watch?v=L53B2UZ9lpY

[2] https://deadline.com/2021/05/korea-cj-enm-investing-4-5-billion-dollars-global-content-creation-1234766767/

[3] https://deadline.com/2020/02/skydance-cj-parasite-studio-redbird-capital-investment-1202857706/

[4] https://en.yna.co.kr/view/AEN20210504001600315

[5] https://en.yna.co.kr/view/AEN20201201003000315