Popularity Wave coming to an end?
Korean industry facing import demands, regional backlashThe International Convention Center Jeju, on South Korea's southern resort island of Jeju, usually hosts more staid events, such as doctors speaking about vascular disease or academics learning about spoken language processing. But late last month, the slick, modern exhibition hall fell prey to thousands of screaming, enthusiastic housewives and movie fans from around Asia, all swarming to join in a celebration of hallyu, or the "Korean Wave." It was the opening of the Hallyu Expo in Asia, a 100-day celebration of the Korean movie, television and singing stars who have entranced so many around the continent.
More than 4,000 fans — mostly from Japan but also from all over Asia — were on hand opening day to catch a glimpse of the biggest hallyu star of all, Bae Yong-joon, star of the megahit "Winter Sonata." Over the course of the Hallyu Expo, organizers say they expect more than 100,000 Koreans to attend, along with 50,000 people from other territories.
But with so many people so enthusiastic for Korean stars, why is the Korean entertainment industry so nervous about its future?
Over the past four or five years, Korean entertainment has grown into a much-documented pop phenomenon around Asia. But now many are worried that the Korean Wave needs updating to stay fresh and continue growing. Others fear that the entire Wave may just be a fad that already is fading. Given that many Korean entertainment companies need their newly found export revenues to stay in the black, how Korean companies handle this period of transition could determine their long-term viability.
In movies, the situation is most dire. Exports plunged in the first half of 2006 to $17.4 million, compared with $42 million in the same period in 2005. Most of that plunge has come from Japan, where imports from Korea fell to $8.7 million from $31 million. After several Korean movies did strong business in 2005 (led by the melodrama "A Moment to Remember," which raked in 3 billion yen, or $25.9 million), every Korean title has flopped in 2006.
"The Korean Wave seems finished — or at least the peak has now passed," says Yuki Sakurai, general manager of international acquisition and business affairs at SPO Entertainment, a Japanese distributor specializing in Korean and Asian films. Despite several high-profile Korean flops in the past year, Sakurai does not blame the passing of a fad but rather poor marketing and intense competition. "As long as we can get Korean films at 'reasonable and realistic' prices, then business will be OK," she says.
For television, however, exports seem as strong this year as last, according to preliminary figures. In 2005, exports soared to $123.49 million, up from just $13.11 million in 2000, according to the Korea Broadcasting Institute. So far in 2006, the Korean Broadcasting System — Korea's largest terrestrial broadcaster — says that it is doing at least as well as last year, and officials at Korea's other major broadcasters report similar situations.
As in the movies, Japan is by far Korea's largest single export market, comprising 60% of television exports in 2005. And while Japan continues to buy Korean television programs, such a dependence on a single territory worries many in the TV industry.
Other countries, such as China, have called for Korea to increase its imports of their productions if Korea wants to continue exporting, creating much insecurity in the local industry and causing many producers to look for partners in China and elsewhere to keep local officials happy.
This concern over exports potentially being cut off by government officials led Lee Soo-man, one of Korea's most successful music producers and promoters, to offer a most unusual plea at a recent entertainment conference in Seoul. "Please, please, please buy Chinese music," he implored his Korean audience.
The music industry has created many stars who have won popularity around Asia. But now music producers have started looking to the U.S. market for growth. Rain and Se7en, two popular R&B singers, have announced world tours with several major shows in the U.S. this month and in 2007. But as with movies and television, the music business is finding success in the U.S. to be most elusive.
Another strategy for the entertainment industry to keep up exports has been to ratchet up production values. Movie and television budgets are quickly moving to levels unheard of just a few years ago. The Korean War epic "Christmas Cargo" is budgeted at $25 million, and the dragon epic "D-War" had a budget of about $70 million. Television drama budgets are soaring too, as producers introduce top-notch production values and special effects. Several series are now topping the $1 million-per-episode mark, with the biggest, "Legend," budgeted at $43 million for 24 episodes.
In the meantime, the Korean Wave lives on at the Hallyu Expo. "As Hallyu spreads throughout Asia, we thought we needed to have a more systematic approach," says Kim Jeong-yoon, an expo spokesman. "The Hallyu Expo is to develop it beyond a focus on specific celebrities. We hope to spread the Korean Wave beyond Asia to the entire world."