Private View Blog: Korea’s cultural wave makes global splash

In 2006, the Korean entertainment company CJ E&M expressed an explicit goal that “everyone will watch at least two to three Korean movies a year, eat Korean food one to two times per month, watch one to two Korean dramas per week, and listen to one to two Korean songs per day.

“Impossible,” any observer would have scoffed. Yet today, with the runaway success of Squid Game, the dystopian South Korean drama which is the most popular Netflix show in 92 countries, this goal now seems imminently attainable. Netflix have recently announced a plan to invest $500m on Korean content in 2021.

Most Western observers will remember their first exposure to hallyu, or the ‘Korean Wave’, through 2012’s hit song and music video ‘Gangnam Style’.

The Chinese will remember their first exposure to this phenomenon much earlier; in 2005, the popular broadcasts of ‘Yellow Handkerchief’ and ‘Dae Jang Geum (Jewel in the Palace)’ kicked off a long obsession with Korean culture.

However, in 2010, there was a stampede at the Super Junior concert at the Shanghai World Expo which caused hundreds of injuries, leading to a backlash against “brainwashed” Chinese fans and hallyu. Over the years, and culminating with Korea getting the US-made Terminal High Altitude Area Defense system, China has banned Korean imports time and time again, forcing Korea to diversify away from its giant neighbour and into other markets.

How has South Korean culture managed to go global? Perhaps because its society sits at the forefront of trends in technology, capitalism, demography and consumerism, it allows its artists to foreshadow a future for societies everywhere.

After all, Squid Game and the Oscar-winning movie Parasite, both comment on growing inequality and the absurdity of so-called “meritocratic” systems across the world. At its heart, Squid Game is a fierce critique of the zero-sum nature of rat races; no wonder the Chinese have banned it, despite reports of millions of secret views. It is too dark, too close to social anxieties at home.

Rich pickings

The ability to accurately capture the zeitgeist of the day is extremely lucrative: Parasite has grossed $259m, and Netflix proudly claims Squid Game has generated $900m.

But the crown jewel of Korean cultural export is boy band BTS, which generates an estimated $5bn a year, or nearly half a per cent of South Korea’s GDP. 

The band’s song lyrics successfully capture the anxieties of the ‘N-po generation’ in Korea, referencing the numerous things members of the younger generation have given up on attaining, such as a career, a home and marriage due to a combination of asset inflation, lack of job opportunities and an excessively competitive environment. Sound familiar?

Indeed, it is very similar to the ‘Tang ping (lie flat) generation’ in China, or even the notorious avocado toast-eating millennials in the US, suffocating under the unattainability of the Boomers’ generation. As in China, Korean youth unemployment rates hover around 20 per cent. 

But unlike mainstream rappers or social media influencers in the US, who turn to nihilism, either expressing great anger with society or withdrawing into self-obsession, BTS’ content is imbued with a sense of community, a sense of elevation and hope. The band’s tagline is “Music and Artists for Healing” with a new narrative to “Love Yourself” being promoted to focus on mental health. Watch any of the music videos and you will see amazing production, a technicolour wonderland of music, dance, and camaraderie. BTS’ fan-club is called ARMY (Adorable Representative M.C. for Youth), and number more than 40m members globally, almost as many as the entire population of South Korea, and just like parents staying together for the sake of the children, BTS have said over the years that the reason why the seven-piece group has not split up is on account of this devoted ARMY.

We talked to several ardent fans, including from the Philippines and France, who said they felt BTS was producing music for them, with positive messages that the band write themselves, rather than the typical Western artists who produce music to glorify themselves.

They also found it refreshing that BTS is not about sex at all, unlike the highly sexualised celebrity culture found in the West. So, after decades of “sex sells”, the loneliness and alienation of the modern individual can be seen to drive the values of true community. The fans we spoke to have found charity groups such as food drives, tutoring groups and most importantly, close friends within this ARMY.

This sense of community also drives serious monetisation. The Hybe-owned app, on which you can buy the entire world of BTS (including merchandise and concert tickets), generates an average revenue per user (ARPU) of $75 per month. For comparison, the Spotify app generated a global ARPU of $5.25 per month in 2020. 

Chinese pushback

The Chinese are afraid of the clout of these artists. Much of the recent regulatory push against “sissy boys” or “fan club culture” is a rejection of Korean culture. The first objection is geopolitical: the Chinese view Korea as a US ally and do not want the young to fraternise with the enemy.

The second objection is metaphysical; images of fans throwing away milk into the gutters in a show of horrific decadence led the Chinese to understand just how powerful these pop stars can be. A campaign to encourage fans to purchase milk for the QR codes under the caps led to excessive bulk buying as fans demonstrated their loyalty to their idols.

With 40m unofficial ARMY members, BTS’ fan-club is nearly 40 times larger than the US army and 20 times larger than the Chinese army. When directed towards buying goods on the Weverse app, this devotion can be very lucrative; however, it can also be potentially very dangerous. The irony is that the greatest risk for the BTS group is the mandatory and universal military service for which many of the members are now overdue. To guard against this risk, a “BTS law” has been passed in South Korea where K-pop entertainers who have received government medals for helping spread or elevate the country’s cultural influence around the world can apply for deferment of their military service. All seven met the requirement when they were awarded the medal in 2018.   

There are critiques of Western culture – or shall I say, of commoditised, capitalistic, and secular culture – raging across the world. From the Muslim Brotherhood, to leading strategist within the Chinese Communist Party Wang Huning’s book ‘America Against America’, to Korean pop culture, we are seeing different responses to this cultural anxiety. Where Chinese regulatory policy was largely geared towards remediation of this phenomenon, we believe Hybe’s approach is the best, and certainly the most lucrative, antidote to the nihilistic nature of individualist societies.

BTS has been the target of many critics, including the allegation that they are not serving Korean culture but are focused solely on taking money from young girls’ pockets. BTS released the song ‘Idol’ as a direct response to this critique. But we see ARMY as a community that young people can actually afford to belong to, which fulfils a spiritual need in the absence of realisable aspirations for home ownership or career satisfaction.

Whereas Korean cultural exports were once reliant on China, now Korean culture has proven itself to be truly global, and hallyu can finally stand on its own two feet.

Alice Wang manages the Quaero Capital Funds (Lux) – Bamboo and China funds. Quaero Capital managed funds hold positions in Hybe, the group that owns BTS, Justin Bieber, and Ariana Grande.