The Economics Behind South Korea's Greatest Cultural Export Cultural

The Economics Behind South Korea's Greatest Cultural Export Cultural

From PSY’s breaking YouTube’s view count limit with his internet sensation “Gangnam Style” to BTS’ establishing themselves as a household name, the “Korean wave” has swept across the globe and taken a place in the hearts of millions of K-pop fans. 

K-pop first started gaining traction on the world stage with renown artists like Big Bang, 2NE1, and Girls’ Generation, but megastars like BTS and Blackpink have rocketed K-pop songs to the top of global charts and given K-pop the explosive popularity that it has today.

Beloved by fans for its addictive music, stunning music videos, and powerful performances, K-pop not only brings Korean culture to communities across the globe but also plays an important role in South Korea’s economy.  

Caption: Blackpink made history in 2023 when they became the first K-pop group to headline the Coachella Music Festival. 

K-pop: a Lucrative Industry

With artists selling out arenas across the globe, the K-pop industry has not only become increasingly popular, but also increasingly profitable. In 2019, the K-pop industry generated over 12 billion dollars for the South Korean economy, and BTS alone contributed significantly to these gains. 

South Korea has exported over a billion dollars worth of BTS merchandise, and a single BTS concert has the ability to make millions of dollars. Additionally, Korea’s Ministry of Culture, Sports, and Tourism reported that BTS’ hit “Dynamite” generated $1.3 billion in economic activity and created 8,000 new jobs. Boosting employment is not unique to BTS, however, since the industry as a whole employs about 92,000 people in South Korea and continues to create jobs in fields such as music production, management, and entertainment. 

K-pop’s role as an important cultural export has promoted global interest in South Korea’s food, language, and culture, and this soft power has greatly benefited other industries in South Korea as well. Around 800,000 tourists, for example, reported choosing South Korea as their tourist destination because of BTS. Moreover, a large number of popular Korean cosmetic lines are endorsed by K-pop stars, allowing South Korea’s cosmetics market, which currently values at over 15 billion dollars, to benefit from the massive popularity of K-pop artists. 

The influence of K-pop stars extends beyond South Korea, with artists serving as brand ambassadors for both international cosmetics lines and major clothing brands. EXO’s Kai, for example, has been Gucci’s brand ambassador for several years, and Blackpink’s Rosé holds the position of Yves Saint Laurent’s first ever global brand ambassador. 

Caption: EXO’s Kai at Milan’s Fashion Week

Several K-pop idols have even been coined “sold-out stars” as a result of their incredible popularity. BTS’ Jungkook, for example, endorsed Prada’s Nylon Gabardine Blouson Jacket, causing the $3,000 jacket to sell out in 25 countries; Big Bang’s G-Dragon, as another example, endorsed Nike’s Air Force 1 Para-Noise shoes, which sold out in just a few hours. Through their massive popularity and influence, K-pop stars have brought incredible benefits to both South Korea and companies around the world. 

The Dark Side of K-pop

Beneath the bright smiles and finger hearts, however, is an industry rife with mistreatment. 

Back in 2009, the K-pop group TVXQ filed a lawsuit against their agency, SM Entertainment, for excessively long schedules, 13-year “slave contracts,” and unfair profit distributions despite TVXQ’s position as one of the most popular K-pop groups of their time. 

TVXQ’s lawsuit set a precedent for many more lawsuits to come. In 2014, for example, the group B.A.P. sued TS Entertainment for paying the members their first salary three years after their debut, in which each member only received about $16,000. In another infamous case, the teenage members of The East Light filed a lawsuit against their producer, who was then convicted of child abuse. More recently, Omega X’s CEO was charged for sexual harassment, verbally and physically abusing the members, and forcing them to perform despite testing positive for COVID-19.

The problem, however, is even more extensive. Many K-pop agencies are known for keeping their artists under “no-dating” clauses, and this issue was brought into the limelight when Cube Entertainment fired their artists Hyuna and E’Dawn for dating. Moreover, companies often hold their artists to unrealistic body standards and force them to abide by brutal diets. Momo, a member of Twice, notoriously shared that she was forced to go on a strict ice cube diet in order to lose 15 pounds the week before her debut. Euodias, a former trainee, told BBC News that K-pop trainees are often weighed weekly, and it was “common to pass out from exhaustion” during their 18-hour work days. 

The South Korean government has since passed the Lee Seung-gi Crisis Prevention Act, which puts a limit on the number of working hours for minors and prohibits entertainment agencies from abusing children. This act, however, does not cover the full scope of the problem.

Companies throughout the industry are exploiting their artists, subjecting them to inhumane working conditions, and abusing them in ways that often go unpunished. Ultimately, the question is not just whether profits were made, but whether profits were made in an ethical way. If we are to take on the role of ethical decision-makers, then lawmakers, companies, and consumers alike must remember that profits should never come at the cost of our humanity. 

Sources

  1. https://medium.com/writers-blokke/how-kpop-is-driving-south-koreas-economic-growth-and-job-creation-6a1879f49c63#:~:text=Kpop's%20contribution%20to%20South%20Korea's,up%20from%200.3%25%20in%202009
  2. https://socioeconlabs.org/articles/why%20kpop%20is%20profitable,%20but%20white-washed/kpop%20whitewash
  3. https://www.businessinsider.in/international/news/how-bts-makes-and-spends-their-money/articleshow/72766914.cms#:~:text=BTS%20is%20worth%20over%20%243.6,travel%20destination%20because%20of%20BTS.
  4. https://www.nytimes.com/2019/11/25/world/asia/goo-hara-kpop-suicide.html?action=click&module=RelatedLinks&pgtype=Article
  5. https://www.smallcase.com/blog/from-seoul-to-stardom-k-pops-economic-symphony/#:~:text=What%20is%20the%20economic%20impact,growth%20in%20the%20coming%20years.
  6. https://www.asiafundmanagers.com/us/kpop-and-economic-impact-on-south-korea/
  7. https://www.scmp.com/magazines/style/k-pop/article/3209194/8-times-k-pops-sold-out-stars-reigned-fashion-world-bts-jungkooks-prada-boots-and-blackpinks-jennie
  8. https://www.premiumbeautynews.com/en/k-beauty-how-did-korea-make-its,19204
  9. https://www.insider.com/korean-bill-prohibit-underage-kpop-idols-overworking-looks-2023-4#:~:text=On%20April%2020%2C%20a%20new,%2Demphasis'%20on%20their%20looks
  10. https://www.bbc.com/news/stories-51476159
  11. https://www.koreaboo.com/stories/tvxq-legal-dispute-sm-entertainment-recap-payment-unfair/
  12. https://thekrazemag.com/latest-updates/2022/11/27/what-happened-to-bap-a-history-of-shady-companies

Contributors

Alyssa Xu
Editor
Ethan Wang
Editor
Natalie Chen
Marketeer