There is a fascinating twist in the current European debate on cultural industries and the Single Digital Market: it has been dominated by the transatlantic dimension. Europeans are still measuring the performance of their cultural industries with the US yardstick in mind. On the top of it, they are now engulfed in an endless discussion on whether the U.S. tech giants (which en passant did not exist twenty years ago) bring threats or opportunities.
Obsessed by the West, Europeans have ignored what has been happening in the East. They noticed some successes—the Korean film La Pietà which won the Golden Lion Prize at the 2012 Venice Film Festival or the mega digital buzz over Psy’s “Gangnam Style.” But, they see them as rare and fugitive events, as exceptions in a world largely dominated by Western cultural industries. This European blindness ignores that, blessed by ancient and vibrant cultures, Asia’s economic powerhouses are fast becoming cultural engines as well. No Asian country better illustrates these ongoing changes than Korea.
Today Korea’s cultural industries have caught up with their European equivalents. In the early 2000s, the Korean pop-music (K-pop) industry (in value added as measured by the national statistical offices) was half the size of the French sector. In 2013, it is 90 percent of its French counterpart—the result of an average annual growth rate of 11 percent in Korea and 2 percent in France—and it is very likely to be larger today. Such a catching-up is also observed in the film industry (Messerlin 2015). In the early 2000s, K-pop exports were almost insignificant. Today, they are on par with French music exports.
Evidence at the industry level suffers from a severe limit. It takes into account only goods and services with price tags. Hence, it does not provide a good measure of the “visibility” of performers in a digital economy that makes many spectacles freely available all over the world. In such a context, an indicator such as the number of clicks on YouTube gives, despite its limitations, a much better sense of what is going on. It is also enlightening from a cultural perspective because free access to YouTube videos minimizes economic constraints, contrary to pricey CDs or DVDs, making by the same token cultures much more accessible worldwide.
Table 1 shows the number of clicks for a few of the biggest hits from Korea, the United Kingdom-United States, Japan and France. The result is striking: not only do the K-pop groups shine when compared to French and Japanese performers, but they also fare well when compared to those superstars that perform in English.
The mere number of clicks on YouTube videos still misses a key factor for developing a good sense of the visibility of the performers. Despite its international nature, pop-music still possesses domestic roots. The most important of which is language. This dimension can be taken into account by defining the “natural” audience of a song as the number of native-speakers of the language of the song. It has the additional advantage of reflecting some broad economic factors related to the supply side of the music industry, such as the size of the domestic markets and the intensity of competition among firms [Parc 2015].
The “visibility ratio”—the number of clicks divided by the number of native speakers–reveals an even more surprising result: K-pop groups have on average a 60 percent higher visibility ratio than English-language performers. This result deserves two questions before being fully accepted.
First, could this result simply reflect the fact that Korean consumers are more prone to using the internet than consumers in the other countries listed in Table 1 because they have had longer exposure to a more efficient internet infrastructure? The answer is no. The data in Table 1 was collected in December 2015, and covers a period lasting from 2010 to 2015. The “first-mover” strategic advantage that Korea enjoyed in the early 2000s was much smaller by the early 2010s because a substantial number of countries have been (partly) catching up. Indeed, adjusting the visibility ratios shown in Table 1 by the current ICT Development Index (published by the International Telecommunication Union) of the countries listed would only reduce the gap from 60 to roughly 55 percent.
Second, could this result simply reflect the fact that Korean consumers are biased towards their national idols? Table 2 suggests a negative answer. It is based on a multi-country database of clicks on K-pop videos on YouTube collected during the year 2011 [Seo 2012]. This period of observation has the advantage of not being distorted by the turbulences created by “Gangnam Style” (released only in July 2012) and by the curiosity in the world about K-pop following this success. In other words, it assesses K-pop international visibility at a still relatively low ebb, meaning that Table 2 is likely to over-estimate Korea’s weight in the world. However despite this potential bias, no less than five countries exhibit “click indexes” higher than Korea’s index (click indexes are the number of clicks per inhabitant in a given country relative to the number of clicks in Korea which is set at 100).
This surprising low ranking of Korea suggests two remarks. Focusing on Korea, it reflects the fact that many Koreans are not interested in the K-pop “idols” segment, but rather in the other segment of the Korean pop music, much more focused on songs than on dance. Turning to the world, Table 2 provides several insights. First, it shows how attractive K-pop is among countries of Chinese culture. Second, it lists some unexpected countries with no cultural ties with Korea: Saudi Arabia, Chile or Peru. Third, it shows that the Japanese share in K-pop performances with no price tag (21 percent in Table 2) is much smaller than the Japanese dominant share in K-pop exports with a price tag (estimated to 70-80 percent). This result is interesting in two respects: it underlines the very wide coverage of K-pop in the world, and at the same time it reflects the Japanese strong bias in favor of buying CDs and DVDs (a feature that makes the Japanese market so important for K-pop financial results). Finally, there are good reasons to believe that all these observations would be even stronger if data on China Mainland were available (their absence under-estimates the K-pop outreach outside Korea). In short, Table 2 stresses the robustness of Table 1 results.
The high visibility ratios of K-pop idols in Table 1 reveal thus how well K-pop firms have been able to go global: they reflect a better (in relative terms) outreach to non-Korean-speaking markets than is the case for English-speaking titles in non-English-speaking markets. Indeed, this result echoes the booming K-pop exports as measured by the Korean statistical office.
This is an amazing result for a K-pop industry that only fifteen years ago was struggling for its survival and secured its niche only a decade or so ago. Moreover, this result goes far beyond a narrow economic perspective: K-pop firms and idols have been able to attract the wide attention from the world that the Korean culture, largely unknown two decades ago, is enjoying nowadays.
This result conveys a general message of hope and energy: global success can happen even if the country is relatively small and initially “at the periphery,” be it in language or cultural visibility. Indeed, this message is increasingly understood by many young European performers, in particular by those who have decided to perform in Korea or Asia.
Beyond this general message, this result presents us with two important implications for action. First, innovative business strategies are what counts most. All the K-pop performers listed in Table 1 (including Psy) are associated with two small Korean entertainment firms which had very limited assets and industrial networks when they started two decades ago, and with no support from the government.
Second, comparing K-pop, French and Japanese visibility ratios shows how “protective” policies are inefficient and costly—including for their alleged beneficiaries. Since 1996, France has imposed increasingly tight “radio-quotas” that reserve a percentage (40 percent) of prime-time radio broadcasting programs to French-speaking songs. The very low visibility ratios of the best hits of the top French stars (such as Johnny Hallyday or Mylène Farmer) strongly suggest that French “radio-quotas” have induced French performers to stay confined in a French music market—cozy but increasingly smaller by the world standard. In other words, a protective public policy may hurt not only listeners, but also the performers that it is supposed to support, as also observed in the French film industry (Messerlin 2015).
By contrast, French performers, such as Daft Punk or David Guetta, who decided to perform in English (hence have been excluded from prime time radio-quotas in France) confirm that what counts are innovative business strategies: not only their visibility ratios fare very well by world standard, but, ironically, they enjoy the fame of conveying the “French touch” around the world. An interesting case is Stromae, a Rwandan-Belgian artist who sings in French. He enjoys a much higher visibility ratios than the other French-singing performers, partly because his original style has attracted attention from non-French speaking audience, notably in Africa. However, the huge gap between the visibility ratios of Stromae’s and Psy’s mega-hits is interesting to note: it is very likely to reflect the much higher visual-intensity of Psy’s performance than that of Stromae’s.
Japanese (sometimes very) low visibility ratios are not directly related to “protective” direct public intervention à la française. Rather they reflect restrictive private practices, in particular Japan’s overly strict copyright regulations which has gone hand in hand with increasingly outdated business practices that are focused on DVDs and offline sales.
As stressed by Parc (2015), Korean policies tend to be more friendly to consumers and at the same time to innovative producers than protective public policies or restrictive private practices. What characterizes them the most is that they are much more hostile to rent-seekers than their European or Japanese counterparts. The best illustration in this respect is copyrights. Korean regulations impose a duration of only 50 years (compared to 70 up to 110 years in OECD countries) and they have no provision imposing a private copy regime. Hence, they do not generate the excessive rents for performers that such long duration and private copy regime nurture. As a result, they spur future creativity more than they reward past achievements. This is one of the most crucial conditions toward generating a vibrant, hence attractive culture.
Messerlin, Patrick (2015). “The French Audiovisual Policy: An Evaluation.” To be published in N. van der Broek and H. Lee-Makiyama (forthcoming 2016) Digital Trade, the Internet and Europe. Kluwer Law. Mimeo available on http://www.ecipe.org.
Parc, Jimmyn (2015). “Wrestling with or Embracing Digitization?” Presented at the ECIPE-AKS seminar, Brussels, Dec. 7th. Text available on http://www.ecipe.org.
Seo, Min-Soo. (2012). Lessons form K-pop’s Global Success. SERI Quaterly. July, pp.60-66. http://www.seriquaterly.com
* This article is based on Patrick Messerlin’s presentation at the ECIPE-AKS seminar, “Cultural Industries: Pivoting to Asia?” held at the Korean Cultural Center on 7th December 2015.
** This work was supported by the 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).
 For Korea, native speakers exclude North Koreans who have very limited access to the Internet.
 Note that Table 1 measures the visibility ratios of these performers on the basis of the language of their songs, not of their native language. This basis seems the most accurate, even if it may have to some extent an under-estimating bias.