On October 15th 2020, the company behind K-pop superstars BTS sent ripples through
the South Korean Stock Exchange with its initial public offering, the country's largest in three years.
BTS fans and institutional investors such as Black Rock and Singapore's sovereign wealth fund GIC
were part of the army that fueled Big Hit's market debut, which jumped by as much as
160 percent valuing the agency at 8.4 billion dollars at its peak.
Even though Big Hit's share price eventually dropped, this high profile listing which was more than a
thousand times oversubscribed by institutional investors, demonstrated the global influence
of South Korea's burgeoning entertainment industry, a phenomenon which has been dubbed the Korean wave.
The Korean wave also known as Hallyu is more than BTS, Blackpink or K-pop for that matter.
It refers to the growing global popularity of South Korea's cultural exports including music, television dramas,
movies, esports, food and even beauty products.
Since the turn of the 21st century, the country's pop cultural exports,
have taken the world by storm, becoming a major contributor to South Korea's $1.6 trillion economy.
In 2019, South Korea exported $12 billion worth of exports of cultural
products and services, an increase of 22.4 percent from 2018, despite a 10.3% plunge in overall exports,
as global trade cooled amid rising geopolitical tensions.
But it wasn't too long ago when South Korea's entertainment industry was in a shambles.
The period following the Korean war which ended unofficially in 1953 saw rapid economic growth in the East Asian nation.
leading to the rise of Korean conglomerates such as Samsung and Hyundai.
The turning point for the South Korean media industry came in 1988, when the first Hollywood movies were allowed in local theaters.
That same year South Korea lifted curbs on overseas leisure travel by its citizens.
These reforms led to a growing awareness of the importance of its cultural development,
as more Koreans became exposed to foreign products and ideas.
In 1994, a government report noted that the Hollywood movie, Jurassic Park, generated more revenue
than the foreign sales of 1.5 million Hyundai cars, which were considered the pride of Korea.
As the film industry began to emulate Hollywood so too did its pop music industry.
The abolishment of the censorship system in 1996 and the popularity of early icons such as
K-pop pioneer Seo Taiji and SM entertainment founder Lee Soo-man laid the groundwork for today's K-pop industry.
Today the Korean wave is a multi-billion dollar industry,
In 2020, BTS's single Dynamite was estimated to contribute 1.4 billion dollars to Korea's economy and created 8,000 new jobs.
This sector has driven profits in other industries including tourism.
The boy band's three-day concert in Seoul in 2019 brought in about 187, 000 foreign tourists, raking in over 790 million dollars for the economy.
Tourists have flocked to South Korea in recent years attracted by the prospects of visiting movies and music video locations
While the private sector has been instrumental in building this wave,
the South Korean government has also invested heavily in its Ministry of Culture, Sports and Tourism with the aim of building its cultural exports around the world.
As early as 1994, a cultural industry bureau was established within the ministry.
A popular culture industry division was created later in 2013, which was reorganized as the Hallyu Support and Cooperation Division in 2020.
One of its main strategies is to diversify Hallyu products from K-pop and K-drama,
to include K-beauty, virtual reality content and esports.
As more Korean professional gamers make their mark on the world stage, the government plans to grow its esports space through events
such as a three-nation esports tournament between South Korea, Japan and China.
In the K-beauty space, South Korean conglomerate AmorePacific, is one of the largest cosmetic companies in the world,
with over 30 brands in its portfolio, including Laneige, Etude and Innisfree.
In 2020, the government allocated a record 5.5 billion dollars for its culture ministry,
an increase of 9.4 percent from the year before and that was before the pandemic.
The lion's share was for the content industry, which has been touted as the country's future economic growth engine.
The Hallyu budget in 2021 will also grow by 42.7%to hit $585 million,
with part of the kitty going to help K-pop bands shift their concerts online.
The Korean wave has been a driver of growth for streaming companies too, especially during the pandemic when more people stayed indoors.
Since 2015, streaming giant Netflix has poured nearly 700 million dollars into partnerships and co-productions while fueling the Korean wave overseas.
The quality of South Korea's productions has improved over time with these investments.
Bong Joon Ho's Parasite picked up four Oscars in 2020, including the coveted Best Picture award,
the first non-English language film to win in the 92-year history of the Academy Awards.
The film highlighted social inequalities in South Korea, a message that struck a chord with a global audience.
The film went on to make $257 million worldwide, cementing South Korea's status as a cultural hub.
The government's support for these industries is part of a strategy to gain soft power, a country's ability to build international influence through its culture.
The cultural diplomacy was in full force in 2018, when about 160 k-pop singers, including girl group Red Velvet performed
in North Korea's capital Pyongyang, before the country's leader Kim Jong-un and his wife.
Some experts said that the performances broke the ice before the peace talks.
That year, Kim Jong-Un became the first North Korean leader to step in South Korea since the end of the Korean war in 1953.
For all its success the Korean wave has its fair share of detractors too.
These negative perceptions include South Korea's foreign policies and the excessive commercialization of the Korean wave.
For example, Japan has strong negative sentiments towards Hallyu and Korea, due to their wartime and colonial histories,
while the deployment of a missile defense system in Korea in 2016, severely impacted the consumption of Korean products in China.
A string of scandals, including a sexist culture and a high pressure industry has also cast a negative spotlight on Hallyu.
In 2019, K-pop star Seungri departed from the boy band Big Bang,
and retired from the entertainment industry after a prostitution scandal that ensnared other celebrities.
The scandal also uncovered allegations of drug trafficking and police corruption within the industry.
However a new generation of women are pushing back against the patriarchal culture,
including leading celebrities such as Red Velvet, actress Moon Ga-young and Bae Suzy.
K-pop fans are also a force to be reckoned with as they turn to activism to lend their support for causes worldwide.
In June 2020, K-pop fans claimed credit for disrupting a political rally by U.S. President Donald Trump.
The same month, fans of BTS also raised more than 1 million dollars for Black Lives Matter,
while other K-pop devotees united on Twitter to drown out white supremacist hashtags.
Although the Korean wave has been a tide that lifts all boats, Hallyu is now at a crossroads.
Even as the government tries to diversify its Hallyu content, the industry is facing a reckoning
with allegations of misogyny and celebrity scandals which are threatening its squeaky clean image,
and the extent of South Korea's soft power.
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