Korean pop culture exports fall amid chill with China

Industry

Published: 29 Jun. 2023, 15:26 Updated: 30 Jun. 2023, 11:45

Korean pop culture exports fall amid chill with China

Girl group Blackpink performs at the Tokyo Dome in April. [YG ENTERTAINMENT]

The amount of earnings from Korean cultural content dipped for the first time in 27 months amid deteriorating Korea-China relations. K-content may stagger in foreign markets under a global economic slowdown, but will continue to grow in the long run, experts say.

Korea’s income from services related to music and video content in April stood at $122.7 million, down 20 percent on year, according to Bank of Korea data.

It was the first time Hallyu income dropped on year since January 2021. Hallyu — or the "Korean Wave" — refers to the popularity of Korean pop culture content in overseas markets.

In contrast, Korea’s expenditure on foreign content rose 243.1 percent on year to $89.2 million in April.

Shrinking earnings and growing spending cut Korean content’s trade balance and pared the surplus earned last year.

K-content surplus reached an all-time high of $492.1 million in the fourth quarter last year but halved to $244.1 million in the following quarter.

Experts say the Korean Wave lost some of its force due to the recent economic slump.

“Much content was either delayed or called off, and some parts of the industry saw the decline as a crisis,” said Lee Sung-min, a media arts professor at Korea National Open University.

The base effect of high online sales that replaced offline ticket sales during the pandemic may have played a role in this year’s plunge, according to Lee.

The graph shows earnings from Korean cultural content between 2020 and 2023. [BANK OF KOREA]

Hit films and dramas such as “Parasite” (2019), “Squid Game” (2021) and “Extraordinary Attorney Woo” (2022) have been spearheading made-in-Korea productions lately.

“The local movie industry failing to land additional wins accounted for the downturn,” said Koo Ja-hyun, director of the global economy office at the Korea Development Institute (KDI).

“BTS, Blackpink and New Jeans led the K-pop industry, but foreign-made films topped the box office here in the first and second quarter this year,” Koo added.

Korea-China relations act as a variable for K-culture earnings going forward.

The Chinese government in 2016 prohibited broadcasts of productions made in Korea and ads starring Korean celebrities to retaliate against the deployment of the Terminal High Altitude Area Defense missile system.

Hallyu's surplus nosedived following the ban from $520 million in 2016 to $220 million in 2020.

BTS’s Suga told fans during a live broadcast on June 11 that he would very much like to go meet fans in China, but Korean singers are unable to perform there.

Seoul and Beijing have been engaging in a diplomatic feud over where Korea stands in the U.S.-China rivalry. The Korean government summoned the Chinese ambassador to Korea to warn him over “provocative remarks” made in regard to Korea’s diplomatic policy earlier this month, with the Chinese government responding in kind by summoning the Korean ambassador to China.

Despite such uncertainties ahead, Hallyu may crest again on the back of K-pop’s popularity and anticipated works like season two of “Squid Game” currently under production.

“It’s a stretch to say that Hallyu has subsided,” said KDI’s global economy director.

The key to the future of Korea’s cultural industry is creating new, original content as it has done in the past, according to Koo.

BY IM SOUNG-BIN, SOHN DONG-JOO [sohn.dongjoo@joongang.co.kr]