Beyond Geo-blocking: “Gangnam Style” is not just for Gangnam
By: Jimmyn Parc
Subjects: Digital Economy EU Single Market Far-East Korea Project Services
“Gangnam Style” by Psy has been a seemingly unstoppable musical force around the world. With over 2.5 billion clicks (as of February 2016) this song has been YouTube’s most watched video since November 24, 2012, when it surpassed Baby by Justin Bieber. The Economist even stated that people spent more time watching Gangnam Style than was spent on constructing mankind’s greatest artifacts, such as Empire State Building, Burj Khalifa, Stonehenge, and even the Great Pyramids of Giza; however, more attention is needed to analyze what made this song so viral.
When Gangnam Style was released on July 12, 2012 through the official blog of YG Entertainment (hereafter YGE), an agency to which Psy belongs, this song received little attention in Korea. Unexpectedly, this song was initially picked up by fans in Southeast Asia via Twitter on July 15, 2012 and was subsequently viewed avidly on YouTube. It fell into a kind of cool-down period briefly until August 1, 2012 when Psy’s popularity soared. The rocket-high popularity began in the United States when Scooter Braun, Justin Bieber’s manager, tweeted “How did I not sign this guy!?!??!” with a YouTube link to Gangnam Style.
In fact, Psy and YGE never expected that this song would go viral all over the world. Rather, they were preparing to release it in Japan by establishing a sub-label, YGEX with Avex Entertainment Inc., one of Japan’s largest entertainment companies. Psy and YGE even translated Gangnam Style’s lyrics into Japanese, adopting the title, “Roppongi Style.” However, this did not materialize in the end. Psy and YGE signed a management contract with Scooter Braun Projects for more efficient promotion in the United States despite the fact that YGE had its own subsidiary in L.A. Psy’s album was also distributed globally by Universal Republic Records, except in Korea and Japan where YGE handled offline sales.
Some of the critical points behind the success of Gangnam Style are the song per se as a product and a very much laisser-faire policy in terms of copyrights that allowed widespread dissemination all over the world via the internet. However, it was online media that played a key role; in particular, YouTube and Twitter that shared (music) videos or related links, enabling Scooter Braun and fans in Southeast Asia to discover Gangnam Style. If geographical restrictions were applied to YouTube, at best Gangnam Style would not have spread so quickly, at worst the fans in Southeast Asia and Scooter Braun would never have had any chance to recognize and appreciate the song. Furthermore, YouTube allowed Psy’s song to be considerably more accessible and appreciated by the public. The more exposed, the more popular―a classical but fundamental principle of success.
Both globalization and digitization have excelled more than ever, and in this new environment, consumers desire to enjoy a wider variety of cultural products online at a reasonable price (of course, the lower the better. If they are free, who would not take them? There is nothing wrong with such an innate behavior). On the contrary, geo-blocking interrupts the rights of consumers. Geo-blocking means that a music streaming service subscribed in Country A does not work in Country B. Some songs that are free of charge in Country B are then not free in Country A. Few would argue that, as a result, the effect of geo-blocking is to protect the culture of a country or a region.
But this contention is worthy of a more in-depth examination. The following three questions should be addressed thoroughly regarding geo-blocking scheme:
– Do consumers not want to enjoy foreign goods and services?
– Is this regime beneficial to consumers or to service (or goods) providers?
– Is the rationale mainly for cultural, political, or economic reasons?
In fact, it rather seems that geo-blocking is not for the sake of consumers, but for a few vested interest groups that want to maximize their monopolistic powers and to secure rent-seeking behavior.
Less conspicuously but more critically, geo-blocking is not only infringing upon the rights of consumers, but also impacting adversely upon the proper function of production. Indeed, this scheme hinders the development of small and medium-sized enterprises (SMEs) unlike what it is often believed. As the case of Gangnam Style implies, geo-blocking takes away the opportunity for the dissemination (or distribution) of works, in particular those produced by SMEs given that utilizing online services is more effective and less costly for them. Furthermore, it forces SMEs to comply with local regulatory requirements that are rarely perceived of by the public. As a result, geo-blocking adds transaction costs such as temporal and financial burdens to various inherent barriers, e.g., business culture, language, among others. It distracts SMEs from their core business activities to focus on conducting peripheral chores. To sum up, large companies seem to be ultimately the main beneficiaries of geo-blocking since these obstructions have less of an impact upon them.
It is often said that more than 60 percent of youths rely upon YouTube to listen to music. This is because YouTube is free and easy to use. YouTube is also the only source to which people can use it without serious geo-blocking issues; it is simple to change locations with a few clicks. This feature makes YouTube very popular in Europe, a concentration of many countries within a relatively small geographical region where people can cross borders very often and easily. These European consumers look for better services which are not affected by geographical discrimination. Considering all the aforementioned aspects, it is not striking at all that YouTube is very popular in Europe as well as in all other regions around the world.
Europe is at a crossroads of cultural reset or fall. Whether she likes large and foreign companies or not, Europe should eliminate urgently all red tape that hinders cultural competitiveness and take advantage of online platforms, established by these companies, as catalysts to achieve Renaissance 2.0. A previous blog, “Wrestling with or Embracing Digitization?” clearly outlines how a nation’s cultural industry and corporations enhance its competitiveness in this digitally globalized era. Europe can benchmark and draw implications from the path that Korea has gone through. Gangnam Style no longer stands just for the Gangnam area in Seoul, not even for Korea, but for the whole world. If Europe wants Europeans and non-Europeans to “Dress classy and dance cheesy” in a European way, then it is the high time that it unleashes the crown jewel in its soft power armory, i.e., culture.
* This work was supported by Laboratory Program for Korean Studies through the Ministry of Education of Republic of Korea and Korean Studies Promotion Service of the Academy of Korean Studies (AKS-2015-LAB-2250003).”
 The Economist (2014) The hidden cost of Gangnam Style (June 3), URL http://www.economist.com/blogs/graphicdetail/2014/06/daily-chart-1.
 This line became famous after Psy appeared on The Ellen DeGeneres Show. He taught the dance steps to Britney Spears and told Spears and DeGeneres that “the mindset of this dance is ‘Dress classy and dance cheesy.’”