In this episode of ZDP, Tanvi, Prapti and Ayati discuss how the wave of global popularity that

Korean culture has garnered, known as the Korean Wave or Hallyu, has become an economic
power. They go through the history of this phenomenon and the impacts it has had on South
Korea’s GDP, its tourism industry as well as the stock market.

Tanvi’s bullet points to work based on

script
P1: Hello and welcome to this new episode of zero down podcast by Arthashasthra, the
economics department society of Miranda House. I’m (P1)

P2: I’m (P2)

P3: and i’m (P3) and today we’ll be talking about the economics of kpop. our discussion today is
going to go from the impact of kpop music on south korea’s GDP and the overall effect of the
korean wave, to how kpop has transformed the music industry itself.

P2: join us as we traverse the history of how economics has been intricately intertwined with the
rapidly growing popularity of Korean culture.

[podcast music]

P1: The Korean wave, or Hallyu, refers to the dramatic increase in the worldwide popularity of
Korean pop culture, including kpop music and kdramas that started around the 1990s. Not only
has it had a huge impact on the entertainment industry worldwide but it has also acted as a
major economic player for South Korea.

P2: That's right. After the 1997 Asian financial crisis, the South Korean entertainment industry
was no longer subject to military censorship and saw itself become a major exporter of pop
culture. Thus the Korean wave became what is known as a “soft power” for Korea.

P3: Soft powers are intangible goods that persuade international customers through positive
attraction, and essentially build a worldwide market for a certain non-physical commodity
through merely a coolness factor.

P1: Right, and k-pop and kdramas had this kind of an influence over the world. Initially, in the
1990s kdramas mainly fuelled Hallyu and began to get popularized. K-pop had also started
gaining some level of popularity at this point but it absolutely exploded on a global scale during
the late 2000s. This was largely because of social media platforms vastly increasing the amount
of content and media that was now available online.

P2: Because of this massive popularity, the korean wave tremendously influenced South
Korea's GDP and became an economic asset for the South Korean government, which has
been actively promoting this cultural phenomenon to further boost its economy.

P3: That's true, and in 2004, k-pop contributed 0.2% of the GDP, which was approximately
$1.87 bn, but in 2021, it reached a record high of $12.4 billion, that is 0.7% of the GDP.
P1: Wow! That’s fascinating. These impacts are not limited to just entertainment but extend to
other industries as well.

P2: One industry that naturally also found itself growing rapidly in South Korea, and thus being a
large contributor to the growth in GDP, was the tourism industry. As the Korean wave took over
the world, the government of South Korea made it a priority to promote it and become a prime
exporter of pop culture as well as just the brand “Korea”. It also began promoting Korean
events, tours of filming locations of kdramas, concerts, music and film tours etc. all of which led
to massive influxes of tourists.

P1: When Gangnam Style gained all its craze across the world back in 2012, the Korean
government started an official tour of the Gangnam district in South Korea. Further, after kpop
really took off with BTS at its forefront, the government started using kpop idols as the faces of
tourism. In fact, in 2018, boy band EXO was the tourism brand ambassador.

P3: Also, in addition to Korean pop culture, Korean lifestyle and the overall Asian-Western
hybrid aesthetic that South Korea has sort of embodied has become vastly popular with Korean
food, skincare and beauty products being marketed in countries all across the globe.

P1: That's right. Fans of Korean culture have bumped South Korea up their bucket list, with a
Korean Tourism Organisation survey of more than 3500 fans revealing that 90% of kpop fans
wanted to go to Korea and 70% even had concrete plans.

P2: In 2019 South Korea saw 17.5 million international visitors due to the Hallyu Wave,
which was 14 percent up from the number in 2018, and tourism expenditure in that year
was 28.85 billion US dollars.

P3: Wow! This massive increase in tourism expenditure has not only increased the number of
tourists but also benefited various aspects of the industry like accommodation and
transportation services. The country's diverse and rich cultural heritage has led to increased
demand for accommodations, from luxury hotels to guesthouses.

P1: As we have mentioned an increase in the demand for goods and services , it has also
affected the market enormously. Global demand for K-pop and its increased revenue are
helping Korean music companies outperform the stock market as well as their competitors in the
music industry. Shares of the four largest K-pop companies HYBE, SM Entertainment, YG
Entertainment and JYP Entertainment have risen an average of 75.1% for the Nasdaq
composite and 11.6% for the Korean Composite Stock Index , Nasdaq and Korean composite
being the stock exchanges of Korea.

P2:The increasing contribution of the K-pop industry to the Korean economy can be explained
by the rising prices of stocks and operating margin generated by the “big 4” companies.
Currently, all four agencies experience at least a 20% increase in their revenues. This along with
K-pop’s drastic growth, allows derivative industries to thrive and gain momentum in the stock
Market.

P3:For example the advertising and marketing sector. Since the artist’s fandom is very strong,
the demand for K-pop artists who can maintain both the trendiness and brand image that young
people seek to promote the brand to more customers. With the increase in
involvement of such industries, the stock market is mostly in its bullish phase. Further, K-pop
has grown so much that it has a significant impact on the Indian music industry as well.

P1:Today, K-pop dominates Western music and pop culture, and it's no longer an
understatement. In the last year, the number of listeners of K-pop, specifically for Spotify,
increased as compared to competitors like Amazon Prime Music and Apple Music. It is very
evident that Korean pop music has overshadowed Indian pop music. The changes don’t
stop here , Indian musicians are experimenting with Korean music and dance idioms ,
showing the effect of kpop on the music industry as a whole.

P2: The Korean Wave has clearly swept the entire globe, and it has been truly fascinating to see
the economic implications of this phenomenon. It might also prove fruitful to follow along with
future developments that arise in the journey of Korean culture.

P3: With that, this episode comes to a close. Thank you for joining us on this riveting discussion
and we hope you enjoyed!! Tune in for the next episode of Zero Down, by Arthashastra.