BTS Billboard No.1 and Korean Cultural Industry... Opening the Renaissance of 'New Hallyu'

Hyundai Research Institute, 'Opportunities and Challenges for the Leap of New Hallyu (K-Culture)' Economic Weekly Review
Seven Opportunities and Challenges for the Korean Cultural Content Industry to Leap into the New Hallyu Era

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyewon] Recently, BTS's new song "Dynamite" topped the Billboard Hot 100 chart, creating a new leap forward for Korea's cultural industry. In this context, there is a diagnosis that a new "Shin (New) Hallyu" Renaissance era must be pioneered.

On the 6th, the Hyundai Research Institute revealed this through an economic commentary titled "Opportunities and Challenges for the Leap of New Hallyu (K-Culture)," selecting seven opportunity factors and challenges for the Korean cultural content industry to advance into the new Hallyu era.

According to Hyundai Research Institute, Korea's cultural content business already possesses competitiveness ranked among the world's top seven global scales. The United States is the largest with $880 billion, followed by China and Japan with $370 billion and $190 billion respectively. Korea is evaluated as the world's seventh largest with a scale of $66 billion, following Germany, the United Kingdom, and France. It is expected to grow to $80 billion by 2023. By sector, the gaming (4th), film (7th), music (9th), and broadcasting (11th) markets rank within the top 10 worldwide.

The scale of Korea's cultural content industry continues to grow steadily as exports of domestic music, video, and game-related services increase. Additionally, the global accessibility and demand for Korean cultural content are rising, and the Hallyu fandom is expanding from Asia to the entire world, which is also positive. In the music industry, despite the global decline in physical album markets, K-pop album sales have significantly increased, proving the power of the Hallyu fandom. From 2013 to 2019, while the global physical album market shrank at an average annual rate of -5.7%, K-pop physical album sales grew at an average annual rate of 27.7%. Even in the first half of this year, when offline performances were severely limited due to COVID-19, K-pop physical album sales increased by 41.9% compared to the same period last year.

Content intellectual property (IP) with fandom is being reproduced and expanded into various fields. Especially in the gaming industry, IP contributes to increased sales. The total number of registered works in Korea steadily increased from 31,000 in 2013 to 44,000 in 2018. Among these, the core copyright industry, including publishing, music, and film, showed an average annual growth rate of 6%, with sales rising from 129.7 trillion won in 2013 to 163.7 trillion won in 2017.

It is analyzed that the cultural content industry's share in the national economy is gradually increasing and its ripple effect is significant. Korea's cultural content industry's share of GDP was only 3.7% in 2000 but expanded to 5% last year.

The cultural content industry is expected to be dominated by "digital" in the future. The global content market is projected to reach $2.5 trillion by 2022, growing at an average annual rate of 4.4%, with the digital content market accounting for more than half at $1.4 trillion. Korea's digital content market ranks within the top five globally and is growing relatively faster than major countries. Among the top five countries, Korea's average annual growth rate from 2017 to 2022 is 8.4%, second only to China at 9.4%.

With the expansion of the digital content market and diversification of content platforms, opportunities for Korean cultural content to enter domestic and international markets are increasing. In fact, as the number of Korean contents on major video platform Netflix increases, Korean dramas are performing well in the Asian market, and K-pop's popularity is growing further through YouTube. According to Google Trends, BTS's YouTube search volume exceeds that of Canadian singer Justin Bieber, who has the most YouTube subscribers among global singers.

However, there is no domestic content platform with global competitiveness. Domestic content platform companies are pursuing vertical integration among content suppliers and partnerships to respond to global content platforms, but there is still no business operator capable of leading the market.

The relatively low labor productivity of the domestic cultural content industry is also a hurdle to overcome. Labor productivity per employee in the cultural content industry is 130 million won, lower than manufacturing at 140 million won, and also lower compared to major G7 countries such as the United States, Italy, and France.

Researcher Ryu Seunghee of Hyundai Research Institute's Industry Analysis Team pointed out, "To advance cultural technology that combines the cultural industry and cutting-edge technology, improvements in domestic human resources, regulations, technological environment, and infrastructure are necessary," adding, "New strategic plans and regulatory frameworks must be established to expand network effects suitable for the platform era, rather than the economies of scale logic of the past pipeline era."

She continued, "While actively utilizing the opportunities arising from the expansion of the global content platform market, strategies must be prepared to enhance the competitiveness of domestic content platforms and maintain market leadership," emphasizing, "To establish Hallyu as a core growth engine of the economy, the economic ripple effect of Hallyu should be further expanded through cultural industry research, development of goods and services, and strengthening overseas marketing."

This content was produced with the assistance of AI translation services.