The “cultural content industry” refers to the industry involved
in the planning, development, production, distribution, and consumption
of cultural products and services. “Cultural products”
refer to tangible or intangible goods and services, or any combination
thereof, which create added economic value based on a
system of cultural elements with artistic, entertainment and
recreational value, as well as originality and popularity. The cultural
content industry is also commonly referred to as the culture
industry, the content industry, the creative industry, or the media
and entertainment industry.
The cultural content industry ecosystem is composed of content
creation (planning), production (commercialization), distribution
(marketing) and consumption (use), and works in close
connection with various industrial fields up and down the value
chain. Compared to other industries, the cultural content industry
characteristically has a low intermediate input rate and creates
high added value.
The so-called “Korean Wave” is responsible for much of the
popularity of Korean cultural content overseas,” resulting in
more Korean consumer goods being sold in regions affected by
the Korean Wave.
Despite the global economic slowdown, cultural content markets
across the world are expected to keep growing by about 5
percent, led by the emerging economies of China and India as
standards of living and network infrastructure continue to
improve.
The United States holds an unrivaled position in the global
cultural content industry, accounting for one-third of all global
markets, while China continues to grow at an alarming rate.
Korea’s cultural content market, meanwhile, grew by an
average 4.2 percent in 2014, and ranked 8th. For the past 5 years,
Korean cultural content markets have been growing at an annual
average of 5.7 percent in sales, and 8.3 percent in exports. In
particular, as the Korean Wave spreads throughout Southeast
Asia, Southwest Asia, Europe and South America, raising the
popularity of K-pop in those regions, Korean cultural content
markets are expected to see continuous growth.
The Korean government has already designated the cultural
content industry as a future growth engine, and is providing
appropriate support. Throughout the years, the Korean government
designated the cultural contents industry as a major industry
for the 21st century (Ministry of Culture and Sports, 1997), a
key industry for the 21st century (inauguration speech of
President Dae-jung Kim, 1998), and a next-generation growth
engine industry (Ministry of Finance and Economy, 2003). With
its history of striving to make up for lack of natural resources
with human creativity, Korea considers the cultural content
industry as a key area that will lead the national economy in the
future.
Currently, foreign direct investment (FDI) in the Korean cultural content industry is limited to the categories of movies, broadcasting, games and entertainment.
Due to the characteristics
of the industry, FDI is generally made in the form of content
manufactured entirely in Korea being exported, while in some
categories, such as broadcasting, the export of program and
show formats is also increasing.
In recent years, Chinese businesses and capital have been
actively making investments in the Korean cultural content
industry. Internet value-added services provider Tencent
Holdings Ltd., for example, acquired shares in leading Korean
game companies in 2014 through an FDI worth about KRW 700
billion (USD 612.5 million). Since then, other Chinese businesses,
such as Zhejiang Huace Film & TV Co. Ltd., Wanda Group
and Alibaba Group, have also stepped forward to invest in
Korean film, broadcasting and entertainment companies.
Increasing demands for Korean cultural content in China are
encouraging more Chinese companies to make their investments
early on in the production process, beginning in the planning
phase and all the way through to the acquisition of equity
shares, rather than merely importing finished products.
Netflix, the largest video content distribution company in the
United States, strives to secure high-quality global cultural content
in advance, not only by collecting existing content, but by
directly investing in the production process for content that have
strong potential for success. It invested USD 50 million in Okja
SPC and Plan B Entertainment, covering the entire production
cost for Okja, the latest film by Director Bong Joon-ho, who
received global recognition with Snowpiercer in both cinematic
quality and box office sales. In return, Netflix has the exclusive
screening rights for the film.
As of 2014, the number of employees in the entire cultural contents industry was 616,459, which was a 0.5 percent decrease from the previous year. Employment opportunities in print media have continuously decline, but the number of employees in publishing was 191,033 persons, accounting for the largest proportion among
all cultural contents industries (31
percent).
Recent progress in technology has caused the number of
employees in games and film industries, to decrease as well. But
knowledge information and content solutions industries are witnessing
a continuous increase in employment numbers thanks to
the growth of digital media.
More than 90 percent of cultural content companies are located
in the greater Seoul area. This is because consumers, human
resources, as well as manufacturing and distribution facilities
are also concentrated in Seoul and neighboring areas. But the
Korean government is designing policies to attract cultural businesses
to different regions, establishing industrial complexes, as
well as promotional districts and facilities specifically targeted
for the cultural content industry. In particular, film and game
companies are concentrated in Busan, broadcasting in Goyang,
and animation in Bucheon and Chuncheon.
In addition, the Korean government establishes a Basic Plan
for the Promotion of the Cultural Industry under the Framework
Act on the Promotion of Cultural Industries every three years.
Various government departments also work together establish
and carry out an implementation plan every year.
The Second Basic Plan for the Promotion of the Content
Industry (2014–2016) set its vision as transforming Korea into a
leading creative force in the global content industry. Some of
these implementation strategies include building a foundation
for investment, loans and technology; promoting content-related
start-ups and train creative talent; support the entry into global
markets; promote the development and use of a health ecosystem;
and reinforce content competitiveness and build a cooperation
system for industrial growth.
Korea’s electronic device industry, supported by an excellent
platform environment based on abundant ICT infrastructure and
outstanding technology, acts as an important basis for future
growth in the cultural content industry. Since the late 1990s, the
government has tried to promote the cultural content industry by
lifting many related regulations, such as foreign investment
restrictions.
A global test bed for cultural content, Korea often is the country
of choice for Hollywood movies to have their world premieres.
The recent expansion of the Korean wave across the
world in the form of K-pop and K-dramas proves the value and
marketability of Korean cultural content products.
