This article focusses on the success of the K-Pop industry, with a background on the industry itself, and how it can become a business strategy that international businesses can use.
BTS, EXO, TWICE and Seventeen are some of the biggest names in Korean Pop (K-Pop) music in the 21st century, and have brought fans worldwide into the world of Hallyu or Korean Wave. “Hallyu refers to the phenomenon of Korean popular culture, which came into vogue in Southeast Asia and Mainland China in late 1990s.”1 Anything that has to do with the consumption of Korean culture can be considered as Hallyu. This has taken different forms of entertainment and media such as dramas, movies, fashion, beauty and, the most popular, music.
In the perspective of an average Joe whose limited knowledge on Hallyu is prevalent, K-Pop would not seem like a big enough deal to read or know about. Hallyu in itself is a pop culture, since it has been widely accepted and supported internationally by people of any age. This vast amount of culture consumed by people worldwide through K-Pop creates a stable yet successful business structure among Korean entertainment companies; slowly taking advantage of the popularity of the culture itself.
As K-Pop becomes even more widespread, South Korea’s economic success drags on with entertainment companies to explore what the fans or consumers want to see or hear from their artists. This is where their business strategies start: surveillance and creation.
Surveillance is a huge part of the industry today as they continue to mold and create artists or idols (“someone reaches idol status after training for years and successfully debuting either as a soloist or in a group”2) in this manner. Companies observe the latest trends and what people all over the world would want in an artist, and go from there. For example, BigHit’s BTS, or Bangtan Sonyeondan was created slowly and is known for writing and producing their own music as well as choreography. Their raw abilities, plus countless amounts of training before being able to debut, are what made their name huge in the international market.
Competition is huge in the K-Pop industry, with selling out albums to stadiums and building bigger fandoms. Auditions or street castings are usually the first step in becoming a K-Pop star, and once passed, the auditionee becomes a trainee (a “K-Pop artist in the making who lives, trains, and performs together starting from ages as young as 9 or 10, or as old as 18-23, all while kept under the tight supervision of their music label”).3
Some trainees are able to debut, but some are held back as the company thinks they need more training. TWICE and Monsta X are groups that have been created through pre-debut and post-debut reality shows in order to catch the public’s interest, create a following and to show the challenges they must overcome to achieve their dreams.4
Once a group or an artist has debuted, the next step of their business strategies start: production. Creating music, videos or anything that would get an artist an amount of following is hard enough, and it can be the cause of an idol’s success or failure. The K-Pop industry is found to be quite reliant of producers to write lyrics and create melodies for artists, and certain companies have grown to have staple sounds and themes to their music. While there are artists who write their own music, there are still a large number of artists who rely on producers. Music videos are also a huge deal in the industry, as these give different vibes and interpretations to the audience. This is mainly the outlet for the international audience to experience firsthand what K-Pop is all about. It gives them and the fans close-up shots of the idol or group, amazing choreography and out-of-this-world fashion.
Artists are given a boost in the rankings and popularity with the help of music videos, especially when they trend on YouTube. Several groups have broken records, such as having the most or a certain amount of views in the first 24 hours after their video has been uploaded. Famous for his song, “Gangnam Style”, Psy is the top artist to have had the most views on his “Gentleman” music video in 2013, with a whopping 38.4 million in just 24 hours. BTS seconds Psy with their latest comeback, “Fake Love”, with over 35.9 million views in 24 hours. They also set the record for the most liked video in a day in YouTube history taking in an incredible 3.9 million likes for the same song.5
With their music videos and albums ready, entertainment companies move on to campaigns. Campaigning in K-Pop is similar to that in politics, where the artist campaigns his or her name or group in different media outlets, like social media networks (SNS), variety shows, and music shows. The only way to get your name across millions of people worldwide is to campaign for it yourself. Once an idol or group debuts or has a comeback, they often tend to perform a lot in music shows across Seoul to promote their new song and themselves. K-Pop artists use SNS regularly to update their fans on what they are up to and if they ever have any announcements. Selcas (Korean equivalent of selfie, which stands for “self-camera”) are seen a lot in Twitter and Instagram, and even in other SNS apps such as Fancafe, and Weibo.
Promotions through endorsement deals are also common with idols and Korean celebrities. This allows them to not only get their name out there, but have their faces be recognised too. It correlates to what they do as “cross-selling”6, where collaborations of brands and the artist’s names are done to sell a certain product. This method isn’t usually done in Western countries, but it is prevalent in South Korea.
Song Seng Wun, an economist at CIMB Private Bank who has been following K-wave trends for 15 years, says “effective cross-selling” is a key success factor. “They are good in tying everything together. There’s the music and drama, but the pop stars, actors and actresses portray a certain style or look that in turn created demand for fashion and skincare products or cosmetic procedures,” Song said in a report from The Straits Times.7
The Visible Success of K-Pop and What international Businesses Can Learn
K-Pop is now an industry well known worldwide and making millions and billions in less than a decade.8 Millions of albums sold by different artists, title tracks streamed thousands of times on Spotify, Shazam, and iTunes, and hundreds of arenas and venues sold out. If this doesn’t spell success for the K-Pop industry, then there must be something wrong.
The amount of Hallyu or K-Pop itself that the audience consumes is huge, and this is what makes the K-Pop industry so successful. What does the audience consume? Official Merchandise. This varies per country that an artist debuts in. Companies create and design merchandise that reflects the artist’s new music or main concept. One of the most famous merch in the K-Pop industry is the lightstick. Usually found in boy or girl groups, an official lightstick is presented to the fans for them to use in concerts or music shows.
K-Pop is played across radio stations, and TV shows, and sometimes appears in YouTube videos as backing tracks. K-Pop music videos appear on the trending pages and shared on SNS.
K-Pop’s revenue has become a strategic asset and recorded 5 trillion won (over $4.4 million) of economic effects in 2010. The total income gained from Hallyu is estimated to be over $50 billion dollars in 2020 Moreover, the music industry export (mostly in terms of CD sales) also recorded an astonishing number of more than 100% rise during 2008-2011 and averagely 36.4 percent per year. K-Pop market share in world music also increased from 33rd in 2005 to 11th in 2012.9
As the K-Pop industry is a fandom industry, the B2C (business-to-consumers) strategy that they employ becomes successful; in a way that the industry sells physical albums, digital songs, official merchandises, concerts, product endorsements, and official fanclubs registration with fanclub manuals.
Entertainment companies become successful businesses of their consumers: the fans. The fans’ continuous support and consumption of these artists’ music and projects are what makes the entertainment companies. It’s not just mediaplay to become successful in the K-Pop industry. A huge amount of following and statistics need to back up an artist or the company to be considered as successful.
According to Seo Min-soo, a Research Fellow at the Samsung Economic Research Institute, businesses should try and develop products derived from K-pop to create added value. Game developers and animators should create products that feature K-pop characters and contents, while producers of musicals and TV dramas should explore ways to incorporate K-pop songs and the singers. Second, products that will attract K-pop fans should be developed, such as merchandise and endorsement deals.10
To attract more tourists, it is necessary to create tourist products that combine K-pop content with sightseeing and shopping, and turn places strongly associated with K-pop into landmark sites. In regions like Europe, America and Australia, tourism agencies can develop tourism packages that cater to people whose interests are in the music scene, art scene, movie scene, etc. This provides not only a better solution for sustainable tourism in the region, wherein consumers can ogle at the sight of their favorite places and celebrities, but it is also a better way to promote businesses in the region as they tour.
Third, to make the most of publicity and marketing, collaborative efforts should be made with K-pop singers, who are known for their fashion and sense of style. Fourth, new marketing strategies should be adopted, such as using K-pop stars as models to advertise products that are closely connected to pop music. Lastly, K-pop fans can be used to pave the way for Korean products overseas. Using YouTube and other social media, the major medium for the spread of K-pop, plans for the overseas entry of Korean products need to be fine-tuned according to region.11
Korean businesses have done quite a lot to break into the international industry, with the help of K-pop. The adaptation of these strategies could be enforced by businesses worldwide to deliver cultural marketing in countries that haven’t been huge consumers of their companies.
For example, the use of SNS and YouTube is a strategy that can be applied to any business in the world. It is the fastest and easiest way to promote a business. Developing advertisements that appear on YouTube videos and SNS timelines can create a boost in the revenue margins of business, solely on the ads. Also, businesses can tap into the creation of marketing events that promote their product or services every once in a while, like what the K-pop industry does. International businesses can jump onto endorsement deals with trending artists and celebrities in their respective areas, in the hopes of expanding their market to different kinds of consumers in different countries.
The K-pop industry is a global strategy that every business can learn from. Investors and entrepreneurs should look at it in a global perspective, and apply it in their business models. “A global strategy should be seen not just as a way to enter foreign markets but the pursuit of open innovation whereby research and development and supply of key resources is carried out on a global level. Businesses should seek to complement their weaknesses with resources in the global market rather than trying to be an expert in all areas before entering international competition.”12 It should look into targeting a transnational market, wherein it focusses on the various cultures and interests of people living in specific parts of the world. Securing opportunities in brand exposure is a must for international businesses to be able to go global, raise brand awareness and build competence through this strategic long-term investment.13 Long-term planning, with several bumps along the road, but with a destination filled with lifetime rewards and revenues will always be better than weak brand endorsements, resulting in short-term profits.
References
1. Kim Bokrae; Past, Present and Future of Hallyu (Korean Wave), American International Journal of Contemporary Research Vol. 5, No. 5; October 2015; http://www.aijcrnet.com/journals/Vol_5_No_5_October_2015/19.pdf
2. Tucci, Sherry. “K-pop A to Z: A beginner’s dictionary” The Daily Dot
https://www.dailydot.com/upstream/kpop – common – terms – to – know/
3. “How to Be a K Pop Trainee” https://www.wikihow.com/Be-a-K-Pop-Trainee
4. “Former SM Entertainment Trainee Reveals What Trainee Life Is Really Like” https://www.koreaboo.com/stories/former-sm-trainee-reveals-trainee-life-truth/
5. DatJoeDoe. (2018) “Most viewed K-pop music videos in the first 24 hours” SBS https://www.sbs.com.au/popasia/blog/2018/05/23/most – viewed – k – pop – music – videos – first – 24 – hours
6. Wong Siew Ying. “How can Singapore learn from the success of Hallyu?” The Straight Times. https://www.straitstimes.com / business / takeaways – from – the – success – of – hallyu
7. Wong. “How can Singapore.” https://www.straitstimes.com/business/takeaways-from-the-success-of-hallyu
8. “The Success of the K-Pop Industry.” The Asian Entrepreneur. http://www.asianentrepreneur.org/spread – k – pop – industry/
9. Pratamasari, Annisa. International Business Strategy in Selling Korean Pop Music:
A Case Study of SM Entertainment, International_Business_Strategy_in_Selling_Korean_.pdf
10. Seo, Min-soo. “What Business Can Learn from K-pop for Global Strategy.” Korea Focus http://www.koreafocus.or.kr/design2/layout/content_print.asp?group_id=104017
11. Seo. “What Business Can Learn.” http://www.koreafocus.or.kr/design2/layout/content_print.asp?group_id=104017
12. “Ibid.”
13. Seo, Min-soo. “Lessons from K-Pop’s Global Success.” 060 – Lessons – from – K-pops – Global – Success.pdf
