The Korean Wave has taken the world by storm: many—if not most—of us have listened to BTS’ latest hits on Spotify or watched the blockbusters Parasite and Squid Game. However, we seldom consider the impact that this phenomenon, also known as ‘Hallyu’, has on South Korea itself. What may seem like mere cultural assets have pivotal political and economic consequences which will profoundly shape an increasingly powerful country, despite pressing challenges to these assets’ longevity.
The country’s cultural sector has generated vast revenues through streaming content, holding meet-or-greet events, and selling merchandise. These revenues totalled 128.3 trillion won ($101 billion) in 2020 and has a staggering annual growth rate of 22.4%. Moreover, prominent actors and singers earn millions working for internationally-renowned brands such as Chanel and Louis Vuitton. Although much of this income goes to the content creators themselves and their shareholders, the government still benefits through the tax revenue which this generates. In addition, South Korea’s cultural market has created a large number of jobs. For example, the song ‘Dynamite’ alone created 8,000 management roles for the band’s parent company, Hybe Entertainment. Hallyu has also boosted tourism since the 1990s, as people have flocked to South Korea to attend concerts or consume authentic Korean products. Indeed, 47% of Japanese tourists visited South Korea in 2004 due to the influence of Korean drama.
Hallyu has also contributed to the revenues generated by Korean industries completely unrelated to the entertainment sector. For example, Korea Air’s popularity skyrocketed after it collaborated with the boyband SuperM to produce an airline safety video, which gained 280,000 views on YouTube within a single day. However, there is only so much that this genre of advertising can do; LG’s collaboration with BTS to promote the glitchy G7 ThinQ smartphone barely raised its sales, forcing the firm to wind down its smartphone business the following year.
Some writers have also argued that Hallyu is a major driving force behind the surge in foreign students learning the language. Korean uptake in American universities rose by 14% between 2013 and 2016, despite the fall in the overall number of language students. This uptick is amplified by the prevalence of online language learning platforms, most notably Duolingo, which experienced a 29% increase in the number of Korean learners between June 2021 and June 2022. The Korean government has also profited from this demand by setting up its own freemium model language learning institute, King Sejong, whose app had 1.2 million downloads in 2021.
This is not to say, of course, that this language trend will generate a global force of competent Korean speakers. The language is notoriously difficult to learn; it would take a native English speaker 88 weeks to reach ‘professional working proficiency,’ and many people will discontinue learning Korean before reaching this threshold. Moreover, in a country where just under half of the population speaks English, the use of Korean is unlikely to be necessary, if at all useful, for foreign businessmen. Nevertheless, the uptick in Korean language-learning is a clear sign of the country’s rapidly growing soft power.
Hallyu has also brought South Korea manifold political benefits, particularly through the actions of its musicians, both on and off the stage. It has helped to maintain diplomatic relations with a host of different nations, as shown by BoA’s role in strengthening Japan-South Korea ties as a cultural envoy even when the two countries were barely on speaking terms. In addition, it has brought about social change in a relatively conservative country. When MCND was criticised by Western fans for its musicians’ racist slurs, Korean people began to recognise the meanings associated with such actions, which they had not paid much attention to before.
One K-Pop band in particular has used its sky-high popularity levels extensively to achieve political goals: BTS. Some of these goals have been domestic; the group’s vocal support for the South Korean vaccination campaign, for example, was crucial for helping the country reach its 70% vaccination target by October 2021, a feat which few of its rich-world peers accomplished. But the boy band is also part of multifarious efforts to improve South Korea’s reputation abroad. It has spoken before the UN to highlight the country’s net-zero targets, and has launched a joint endeavour with UNICEF to promote the ‘#ENDViolence’ scheme, which denounces brutality against children. BTS has also been credited with drawing attention to historical issues from the country’s perspective, which was exemplified by musician RM’s tribute to the Korean War in 2020.
But just as Hallyu has brought South Korea political clout, it has also been an inconvenience on multiple occasions. For example, BTS member Jimin’s choice to wear a shirt which depicted the US atomic bombing of Japan at a public event enraged the Japanese public and significantly soured Japan-South Korea relations. In addition, K-pop groups usually restrict activism to relatively uncontroversial topics to avoid alienating moderate fans. Many idols have learned their lesson from the ‘Tzuyu flag scandal’, in which a member of the girl group ‘Twice’ waved a Taiwanese flag on the show My Little Television and was punished severely: the Chinese government banned her from national television, and her Huawei endorsement was cancelled.
It is also worth considering whether Hallyu as a phenomenon is sustainable. It is frequently argued that Hallyu’s continuing success is heavily dependent on South Korea’s geopolitical relationships with its two largest markets (China and Japan), and therefore any deterioration in these already lukewarm ties will depress sales of Korean cultural exports. Even so, this argument ignores the consistent desire of international consumers to acquire Korean products and media. In 2016, for example, when the South Korean government hosted an American air defense system on its territory, the Chinese regime restricted Korean cultural imports in retaliation. Despite this, BTS’s fan club bought 220,000 copies of the latest album from a surrogate shopper and brought them into the country, which led to a record number of purchases. This act of defiance, coupled with an online firestorm initiated by the band’s fanbase, forced the Chinese authorities to quickly reverse the embargo. In this way, geographical diversification of Hallyu, while recommended, is not obviously necessary for its survival; administrations worldwide are likely to resist picking a similar fight against Hallyu exporters. Moreover, the Korean Wave is already wildly popular in countries outside East Asia. At the beginning of 2021, there were 15.8 million registered Hallyu fan club members in America and 18.8 million in Europe, and their ranks continue to grow at double-digit annual rates.
However, there are other threats to the longevity of the ‘Korean wave’, as unstoppable as it may seem to be. A growing number of critics point out that Korean film is unique in nothing but its country of origin; even the wildly popular Squid Game has come under attack for its similarities to The Hunger Games, Arnold Schwarzenegger’s The Running Man, and Japan’s Alice in Borderland series. If audiences come to agree with this critical assessment, they may revert to embracing more familiar substitutes, particularly Western content.
The most vulnerable segment of Korean cultural exportation is gaming, which is especially problematic as it accounts for more than a third of Hallyu exports. One issue is that Korean citizens, which accounted for just under half of the Korean video game market in 2021, have become increasingly concerned with the societal issues surrounding the industry, including addiction and computer-induced myopia. The government has begun to take note, and although it recently removed its long-standing ban on nighttime computer gaming for under-16-year-olds, it may well implement similar legislation that will dent Korean gaming sales in the future. Additionally, many gaming companies have adopted a detrimental business model which involves charging customers ludicrous amounts to play or progress through their games. Lineage 2M, a game which had the sixth most downloads worldwide in the first quarter of 2020, lost 68.9% of its player base in five months over a boycott on this issue. A final challenge is the stiff competition from foreign industry titans such as Microsoft and Sony, which may lure away customers. Not only do these corporations enjoy high brand loyalty from existing buyers, but they also possess colossal budgets to develop popular games; Sony’s research and development budget is nearly larger than the combined expenses of Krafton, the largest Korean gaming company, and Microsoft’s budget is ten times larger than Sony’s.
South Korea’s administration should reduce its subsidies for Hallyu, which have amounted to hundreds of millions of dollars since 2008. This may not be necessary, since SM and JYP Entertainment—the companies which own several notable K-Pop groups—are extremely wealthy and therefore ineligible for subsidies, while ownership of famous bands by small companies like Fifty Fifty are one in a million success stories. The visual content industry is also self-sustaining, as Samsung and Netflix have spent lavishly in hopes of producing the latest blockbuster show in South Korea. Still, the government should buttress other sectors which will significantly increase economic growth and employment; it should mainly focus on its semiconductor and manufacturing industries, which have become more valuable as firms seek alternatives to the Chinese and Taiwanese markets.
Hallyu certainly deserves to be in vogue, and South Korea stands to profit handsomely from it. But content creators, gaming company executives, and the government must address the cultural sector’s weaknesses to ensure that it remains ‘dynamite’ for decades to come.