[Culture Op-Ed] Did K-pop Have No Choice but to Go Global Because the Domestic Market Was Too Small?

Even now, nearly every newspaper and broadcaster says the same thing as the headline. And not just in Korea. Billboard in the United States has already repeated this very claim in print to explain K-pop’s global success, and the Japanese broadcasting world still endlessly repeats an argument that does not deviate even one step from it. In the latter case especially, it is often used as a kind of face-saving, self-consoling explanation for why Japanese J-pop failed to globalize like K-pop. The interpretation is that, unlike Korea, Japan’s domestic market is so large that it simply never felt the need to move overseas.

For the past 10-plus years, there was in effect no meaningful current pushing back against this widely accepted belief. But after BTS achieved the feat of reaching No. 1 on the Billboard chart, a mood has gradually emerged that tries to read the situation a little differently. Since around last year in particular, counterarguments have begun to appear even in Japan, where this belief had long served as a form of self-justification.

A representative example is the February 2019 column published in the Japanese weekly magazine Weekly Gendai, titled “Is the K-pop Market Really That Huge? A Fact-Based Analysis of Their Capabilities and Why They Insist on Overseas Expansion.” It was written by Japanese subculture journalist Iida Ichishi.

In the column, Iida thoroughly rejects the conventional wisdom that “K-pop had no choice but to expand abroad because its domestic market was small.” Korea, he points out, also has the world’s sixth-largest music market, and the logic that “a small domestic market forces overseas expansion” cannot explain why the United States, which has the world’s largest domestic market, is also the world’s largest content exporter. In the end, his conclusion is that “the size of the domestic market and how aggressively a country exports music are not directly related.”

Iida ultimately states: “My diagnosis is that Lee Soo-man and Park Jin-young merely brought up market size to persuade investors, reporters, and other media figures, while in reality what came first was their ‘dream’ and their ‘desire for popularity and fame’—their wish to ‘be recognized outside Korea’ and to create stars who could work worldwide across Asia and in places like the United States.”

A “theory” that was closer to business rhetoric than to an interpretation of reality

So let us now arrange what actually happened in chronological order. As Iida Ichishi explains, the claim that “K-pop had no choice but to go overseas because its domestic market was small” was in fact first put forward by the Korean side. Looking through media reports, the earliest statement appears to be from an interview article in the September 24, 2005 issue of the Japanese weekly Toyo Keizai, titled “‘The King of the Korean Wave’ Contemplates the Asian Market,” in which SM Entertainment chief producer Lee Soo-man said the following:

“In Japan’s case, because it has the world’s second-largest music market, there is no need to go outside, nor is there any market it must go out to. Korea, by contrast, has a structure in which it has no choice but to go abroad because its market is small.”

The explanation remains strange no matter how many times one reconsiders it. The claim that a country with a large domestic market has no need to go overseas is itself absurd enough, but it is just as hard to explain why a small domestic market would mean one must go abroad. Perhaps for that reason, this logic disappeared for a while in both Japan and Korea. Then six years later, in 2011, it made a flashy comeback through a far more influential Japanese terrestrial television broadcast—this time through the mouth of Kim Youngmin, who was then serving as CEO of the same SM Entertainment company (and is now general president).

Appearing on the November 4, 2011 Nippon TV variety program “Dokoro, Sanma no Sekai wa Naze Konna ni Okoru no ka Kaigi,” Kim carefully laid out the kinds of points about the successive success of K-pop idol groups entering Japan that anyone even mildly interested in the Korean Wave would likely have known. Then right-leaning journalist Yoshiko Sakurai asked him, “Why have Japanese musicians failed to expand overseas?”

Kim responded: “It is not that Japan cannot advance overseas; rather, Japan’s domestic market is simply too large.” He continued, “If the Japanese music market is worth 500 billion yen and the Korean market is worth 15 billion yen, would Japanese musicians really need to go to the Korean market? Entering a Korean market that is one-twentieth or one-thirtieth the size is economically complete nonsense. The gap between the markets is simply too large, and that is why it is difficult for Japanese musicians to go abroad.”

It was so identical to Lee Soo-man’s explanation from six years earlier that one might suspect SM Entertainment had prepared a model answer in advance. But this time, the explanation was actively embraced. From 2011 onward, all Japanese media, like parrots, repeated SM Entertainment’s explanation verbatim in interpreting the situation, and Korean media also began accepting the claim around that same time.

There is something interesting here. Korean K-pop companies repeated this explanation only to the Japanese media. They did not explain things this way at home, and in fact no one here was really asking. And as noted, it was a nonsensical explanation from the start. Even so, there is a reason the claim was ignored in Japan in 2005 but spread everywhere in 2011 like a fish in water. Part of it may have been the difference in reach between a specialist print weekly and a terrestrial television network, but the larger reason was this: in 2005, the K-pop Korean Wave was not much of anything; by 2011, it had become a clear threat.

In 2005, only one female solo artist, BoA, had managed mainstream success in Japan, and the boy group TVXQ had only just planted its flag there. But 2011 was different. By then, TVXQ had already become one of the top three cash-cow boy groups in Japan, and second-generation K-pop girl groups such as Girls’ Generation, Kara, and 4Minute had just landed in Japan and were achieving results beyond imagination. Japanese media even began using the expression “K-pop black ships” (黒船). As everyone knows, “black ships” refers to the warships Commodore Perry brought to Japan in the 19th century when he demanded the opening of the country. The term shows that the shock felt similar to the “British Invasion” slogan used by the American media when British musicians led by the Beatles stormed the U.S. pop music market in the 1960s.

In the end, SM Entertainment’s consistent line—“K-pop had no choice but to go overseas because its domestic market was small” and “J-pop does not go overseas because its domestic market is so large that it has no need to”—was in effect a measure to soften the shock felt by Japanese people whose market was being “invaded,” preserve their pride, and help K-pop products settle smoothly into the world’s second-largest market. It was logic worthy of a diplomat. In other words, it was less an interpretation of reality than something much closer to business rhetoric.

The unusual story that K-pop was not, in fact, so focused on overseas expansion simply to make money overseas

Then what was the real reason K-pop became so obsessed with overseas expansion from such a relatively early stage? In truth, this is a rather foolish question. If one is going abroad to make money, what further reason is needed? Yet Iida Ichishi offers a different view here as well. Looking at “SM’s fixation on the Chinese market and JYP’s fixation on the U.S. market,” he argues, “K-pop’s global expansion cannot be explained by economic reasons alone.”

“What matters is that SM was aggressive not only about entering Japan but also China. And it was consistently aggressive from the late 1990s onward—not only after the 2010s, when no one could ignore China’s sheer economic scale. As for entering Japan, one might be able to explain it as profit-seeking, since CDs were priced higher than in Korea and album sales volumes were larger. But in China, pirated copies were rampant through the 2000s, and according to the International Federation of the Phonographic Industry (IFPI), the size of China’s music market in 2017 was 25.94 billion yen—smaller than Korea’s 49.44 billion yen—meaning the album, digital music, and performance markets were not especially developed.”

At the same time, Iida also raises doubts about JYP Entertainment’s strategy of entering the American market, led by the girl group Wonder Girls. Neither company was a large conglomerate with the financial capacity to treat such efforts merely as long-term groundwork. More importantly, SM Entertainment was not able to generate truly meaningful profits in China until more than 15 years after it first began trying to enter the market, while JYP Entertainment ultimately returned from the United States after merely burning money there, and it was only nearly 10 years later that Big Hit Entertainment was finally able to earn profits through BTS.

He is thus expressing strong doubt as to whether such reckless and wasteful expansion strategies were really sensible for private companies.

Accordingly, Iida’s conclusion, as noted at the outset, runs in a somewhat romantic direction: K-pop’s overseas expansion stemmed simply from “their ‘dream’ and their ‘desire for popularity and fame’—their wish to ‘be recognized outside Korea’ and to create stars who could perform worldwide across Asia and in places like the United States.” In other words, reckless ideas born not from rigorous commercial calculation but from an intensely romantic “desire for cultural recognition” happened to align well with the trendy nature of the pop culture industry and thus produced good results.

But is this hazy logic really persuasive? One might say it is only about half right. To draw a more accurate picture, we need to look at the atmosphere of the late 1990s, when the first generation of idols emerged and the Korean popular music industry began aggressively activating the code of overseas expansion.

First-generation idols generally refers to those who debuted between 1996 and 1999—groups such as H.O.T., Sechs Kies, S.E.S., and Fin.K.L. Of these four representative first-generation teams, H.O.T. was the first to enter China by releasing albums there, while S.E.S. entered Japan. H.O.T. posted relatively decent results, while S.E.S. did not. But even after that, Korean idols’ attempts to go abroad never stopped. Whether it worked or not, if the opportunity arose, they went overseas.

Why? Think about it carefully: the 1996–1999 period was also the time of Korea’s IMF foreign exchange crisis. It was an era when the entire nation suffered through extreme hardship and sought comfort through entertainment. And the two people who gave the public the greatest comfort during that time were baseball player Park Chan-ho, who had advanced to Major League Baseball, and golfer Pak Se-ri, who had become an LPGA star.

Koreans, one might say, are a people with a kind of “export faith.” The harder the times, the more they take courage, pride, and comfort from seeing fellow Koreans go abroad and fight hard on the world stage. That is why Park Chan-ho and Pak Se-ri were treated as national heroes during this period and earned enormous sums from countless commercial endorsements at home.

Naturally, the K-pop industry was not about to miss this trend. The late 1990s to early 2000s was a time when the old physical album market was devastated, the industry was moving into the era of digital music, and illegal downloads were running rampant. It was a moment when “it was impossible to make a living from music alone.” So the industry had little choice but to focus on commercials, television appearances, and all sorts of events, and to succeed at that, artists needed a boost in status through the code of “overseas expansion.” That is how the pattern emerged of heading first to Japan, China, Taiwan, or elsewhere whenever the chance arose. If things went well, all the better; and if not, media play could still inflate overseas achievements enough to raise an artist’s stature at home.

In the end, the starting point of what Iida Ichishi found so puzzling—“K-pop’s overseas expansion, which is hard to explain in purely economic terms”—was precisely this trend: not “clinging to overseas expansion in order to make money abroad,” but “pursuing overseas expansion in order to build excitement at home and make money in the domestic market.”

The path of Korea’s cultural industry created by heroes of “export faith,” by the “vanguard” of exports

In fact, this peculiar pattern is not easy for a Japanese journalist to detect. In Japan, there has been virtually no trend since at least the 1970s whereby an artist’s standing at home rises or their popularity is sustained simply because they achieved results overseas. A representative example is the female duo Pink Lady, who enjoyed phenomenal popularity in the 1970s. Even though Pink Lady entered the U.S. market and became only the second act in Japanese history to land within the Billboard Hot 100, it caused virtually no reaction in Japan. On the contrary, when they returned to Japan after their U.S. activities, the hiatus had weakened their popularity, and they ended up rapidly disbanding.

Korea, however, has always had a different atmosphere. As mentioned, it is a country where “export faith” has long existed. Ever since the declaration in the 1960s that Korea would build itself through exports, exporting companies were even given the title “vanguard” of exports—a term implying that they were like an army defending the nation on the battlefield. In a society so thoroughly shaped by this mood, the fields of culture and the arts could hardly avoid its influence. Indeed, even nightclub singers performing late-night shows were often advertised with the exaggerated—or outright false—promotional line, “Just returned from a tour of performances in Southeast Asia.”

And the same remains true today. The atmosphere is very different from Japan’s. It is unavoidable. According to the Korea International Trade Association, the International Monetary Fund (IMF), and Statistics Korea, Korea’s trade dependence—the share of exports and imports in the economy—stood at 68.8% in 2017, 2.3 times Japan’s 28.1%. Korea’s export dependence, at 37.5%, was the third highest among the G20, whereas Japan’s was 14.3%, barely one-third of Korea’s level. That is why in Korean society, “overseas” matters are bound to be felt more sensitively and more viscerally across social and cultural life. In popular culture especially, Korea does not develop the kind of atmosphere seen in Japan, where “there is Japanese culture that is popular overseas, and then separately there is Japanese culture that is popular in Japan.”

Of course, this social atmosphere in Korea has also had major positive effects on the Korean popular culture industry. It has made the country exceptionally sensitive to overseas trends in cultural terms. The public itself is deeply interested in global trends and responds enthusiastically to domestic content that tries to keep pace with them. As a result, industries such as K-pop and Korean film have steadily evolved into ones capable of responding almost in real time to experiments being attempted in advanced pop culture countries such as the United States. As that know-how accumulated, a foundation was laid for engaging with overseas stages almost anywhere in the world with virtually the same rhythm and fluency.

So in the end, while it is wrong to say that “K-pop had no choice but to expand overseas because its domestic market was small,” one might perhaps explain it this way instead: “Because Korea is a country with an exceptionally high dependence on exports, K-pop was able to expand overseas as well.”

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Original title: [문화칼럼] K팝은 내수시장이 작아 해외로 진출할 수밖에 없었다?

Author: Moon-won Lee

Date: 2020-06-16

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=8&idx=22842