- Industries and Sites
- Industry Trends
South Korea’s content industry is one of the most promising sectors enjoying
consistent growth. In fact, the nation’s content industry emerged as the world’s seventh biggest in the recent five years with the industry and its exports growing annually by more than 5 percent and 10 percent respectively. In addition to the quantitative growth, the industry had its competitiveness acknowledged by making valuable achievements in the global market with its boy band BTS ranking top on the US Billboard Hot 100 Chart, and with the Korean movie Parasite winning four Oscars.
Amidst the situation, the sudden outbreak of COVID-19 is serving as a test bed for examining the sustainability of the content industry. The Korean content industry produced meaningful results by nimbly responding to the demand for merging digital and other technologies as it has already been successfully in responding to major changes such as the digital transformation and the Fourth Industrial Revolution. This text will review the changes and trends of the content industry and discuss the direction of the Korean government’s Growth Strategy for the Digital New Deal Cultural Content Industry and its significance.
▶ Content Industry: Turning a Crisis into an Opportunity
The global pandemic brought by COVID-19 has created a new normal crushingly different from the past and left its mark across all industries. Most industries have experienced a major crisis due to the unexpected changes in the external environment. Amidst the simultaneous outbreak of multiple crises, the content industry fared better than any of its peers. Whereas a major crisis befell on content provided in physical venues such as cinemas and theaters, the industry was able to overcome the crisis by offsetting the losses with virtual content provided over-the-top (OTT) and via virtual concerts. For example, the Korean movie, Space Sweepers, after being forced by COVID-19 to switch from a theater release to an online showcase on Netflix, ranked No. 1 on the streaming service in twenty-six countries, while BTS, unable to run its global tour, held a virtual concert titled Bang Bang Con the Live. The show was viewed by 2.24 million viewers in 160 countries and recorded sales surpassing KRW 22 billion.
Meanwhile, the pandemic restricted other outdoor leisure activities and triggered a surge in the overall demand for online-based content including games, digital comics, and e-books. More specifically, mobile big data service provider IGA Works valued the Korean mobile game market at KRW 5.3291 trillion in 2020, which was up by 24 percent year-on-year, and according to Media SR, the turnover of Korean webtoons, a form of digital comics, increased from KRW 75.6 billion in 2019 to KRW 104.5 billion in 2020, recording a 38 percent growth year-on-year. The spread of non-face-to-face means ushered in by COVID-19 further expedited the already-fast growth of online and mobile contents. The change also triggered innovations and laid the foundation for South Korea to lead the contents industry in the post-coronavirus era. .
▶ Online “Silk Road” Paved by Global Contents Platforms
The advent of global contents platforms serviced to consumers around the world including YouTube, Netflix and Spotify has opened an even bigger opportunity to Korean contents which has already been recognized for its competitiveness. Korean contents providers under the traditional distribution system had experienced difficulties in exploring overseas markets due to their limited networking and bargaining power with local providers, but global platforms that has allowed them to simultaneously release contents across the world helped expand opportunities in the global market. For example, in the case of broadcasting, a content producer wishing to go global previously had to negotiate with local broadcasting companies the type of agreement, amount and time slot, and rarely succeeded since the content would be scheduled in unfavorable terms. Players in the music industry would also have to sign a contract with a local label to produce and distribute an album and go through procedures set against them. In contrast, global platforms such as Netflix and Spotify have created an environment where all contents are simultaneously exposed worldwide and can be noticed and gain popularity. While COVID-19 generated more global contents users, Korea supplied more high-quality contents loved all around the world.
▶ Growth Strategy for the Digital New Deal Cultural Contents Industry
In September 2020, the Korean government announced the “Growth Strategy for the Digital New Deal Cultural Contents Industry.” It envisions a Korean version of the New Deal to focus on digital innovation and enable the nation to overcome the current crisis and effectively cope with the post-coronavirus era, just as the United States aggressively pushed for the New Deal in the past. More specifically, the plan presented a concrete direction for Korea’s content industry—which has adapted to the non-face-to-face trends and most flexibly and accelerated digital transformation—to create success models and cases for the Digital New Deal and to serve as the main axis leading the change.
|Changes in the environment||
||2020 Digital New Deal Cultural Contents Growth Strategy|
Focus on the development of non-face-to-face contents
|Exploring the next-generation contents market
(new tech games, cultural heritage big data, etc.)
Strengthening the global competitiveness of K-Contents
The first direction is to focus on developing non-face-to-face contents. To that end, the government plans to lay the foundation (infrastructure), support contents production and improve related policies so that the contents industry can swiftly adapt to the switch to the non-face-to-face environment and produce competitive contents. More specifically, the government—by focusing on the broadcasting and transmission of large-scale performance contents, application of extended reality technologies, two-way communication and copyright protection—aims to build online-exclusive K-Pop concert halls equipped with facilities and equipment suitable for virtual performances and use the established infrastructure to run pilot projects of supporting the online performance production of small and medium-sized entertainment agencies with limited capital and technology.
Next, the government will expand the development of and investment in extended reality contents and create an environment for a wide use of data and AI, while at the same time training related professionals for the creation of next-generation high value-added contents. Just like the emergence of 4G enabled YouTube, Facebook, Netflix and other streaming service providers which are changing and leading the global market trends with their new network-based services, the shift to 5G will serve as an opportunity to champion the global change in contents and to create new businesses.
Lastly, the government envisions strengthening the competitiveness of intellectual property (IP), which is becoming more crucial for contents, and seeking a joint growth of contents and related industries. A detailed support plan was established to expand the market that leverages IP so that one IP can lead to OSMU (one source multi use) and actively interact with other industries and to promote the new Korean Wave by providing systematic support. Korean cultural contents are now consumed and distributed in a new way where fans around the world enjoy them on YouTube, Netflix and social media and spontaneously create fandoms. Amidst the situation, it is all the more important to pursue a digital strategy of stressing and focusing on the importance of IP.
The competitiveness of Korean contents has been verified in the course of tackling COVID-19 and is expected to continue in the post-coronavirus era. In particular, investors will flock to new contents sectors including webtoons, OTT, virtual performances, and extended reality contents.
By Ji-Hoon Yang (email@example.com)
Cultural Industry Research Center, Korea Culture & Tourism Institute
<* The opinions expressed in this article are the author’s own and do not reflect the views of KOTRA.>