The Growth of Korean Cultural Industries and the Korean Wave

Doobo Shim. East Asian Pop Culture: Analysing the Korean Wave. Editor: Chua Beng Huat & Koichi Iwabuchi. Hong Kong University Press, 2008.


Since the 1980s, Korea had been under daunting bilateral (largely from the United States) and multilateral pressures to open its markets, in the name of globalization, in various sectors including the cinema and television. These global economic dynamics influenced Korea Inc.’s industrial formations. While taking on the defensive, the Korean economy began to promote production and commodification of media and cultural content, including film, television programming, animation, etc., against the backdrop of the worldwide diffusion of “information society” discourses. The media liberalization measures, also pushed for by citizens who were fed up with long years of state control of the media, led to a considerably competitive domestic media environment that eventually cultivated commercially sensitive productions. Ironically, the global media market openings in the 1990s facilitated the export of Korean popular culture.

By early 2006 Korean cultural productions, including television drama, film, pop music, etc., have become widely consumed by audiences in Asia. Starting with What Is Love All About and Stars in My Heart in the late 1990s, and Winter Sonata and Dae Jang Geum in recent years, Korean television drama, and its stars including Bae Yong Jun, Ahn Jae Wook, Lee Byung Heon, and Kim Hee Seon, have enchanted Asian audiences. The popular consumption of Korean television dramas has coincided with that of cinema. Starting with ShiriJoint Security Area and My Sassy Girl, Korean films have become regular fixtures in theatres across Asia. At the same time, Korean pop music, or Kpop, has also produced such international celebrities as H.O.T., BoA, and Rain (“Bi”). The regional media call this new popular cultural phenomenon in Asia the Korean Wave (or, Hallyu).

The everydayness of Korean pop culture in Asia is evidenced by the fact that it has become material for a song (“I am not … Song Seung Heon”) in Malaysia. Two male singers express the feelings of a man who has a girlfriend infatuated with the Korean actor Song Seung Heon. Its words, “You want me to say Salanghe /You complain that our romance is not like that in the Korean soap opera …. You order me to have only a pack of Korean instant noodles a day …”, show how much Korean popular culture is embedded in people’s lives in Asia.

In order to account for the growth of Korean popular culture into an export industry and its international appeal, this chapter examines the trajectory of Korean popular culture industries linking them to global and local political economic relations and the domestic cultural environment. Because of time and space constraints, this chapter focuses on cinema and television dramas for its analysis of the development of Korean popular culture. For a start, we shall discuss the government policies and domestic conglomerates’ business moves that helped transform the Korean cinema industry, taking account of the global political economic context.

The Korean Cinema in the 1990s

The period of the late 1980s and early 1990s was an important juncture for the Korean cinema industry because of the market opening to foreign distributors. Under U.S. pressure, in 1988 the Korean government allowed foreign film companies to distribute their films without passing through local distributors in Korea, which the domestic film industry fiercely opposed in vain. After this measure, poorly performing homemade flicks marked a record low of 15.9% domestic market share in 1993. While the annual number of local film productions was decreasing, that of foreign film imports was increasing. In 1984, the figures of local productions and foreign imports were 81 and 25. It changed to 87 and 175 in 1988, and 63 and 347 in 1993 (Korean Film Council, 2006). In this situation, commentators predicted the demise of the Korean cinema industry in the near future (Kim, 2003).

At around that time, the Uruguay Round (UR) trade negotiation, started in 1986, eventually concluded in 1994 transforming the General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO) in 1995. It meant that all member countries of GATT, including Korea, were soon obliged to open their markets in media communications and culture. This sector had been protected from foreign competition, having been considered “exceptional categories” to the free trade principle since the early days of GATT, which began in 1947. The Korean press began to write that while culture was emerging as a new sector in global economic competition, Korea was in danger of its indigenous culture being debased by foreign media, and also of dollar drain (Shim, 2002). The press also echoed Peter Drucker, Alvin Toffler and their ilk’s futurological discourses on the cultural industry’s contribution to national economies in the coming 21st century.

For Koreans, there was nothing that illustrated the importance of the cultural industry to the national economy better than what I would call the ” Jurassic Park factor” (Shim, 2006). In 1994, the Presidential Advisory Board on Science and Technology proposed to President Kim Young-Sam that Korea should develop cinema and other media content production as a national strategic industry. What the proposal highlighted was the fact that Hollywood movie Jurassic Park‘s total revenue came up to the foreign sales of 1.5 million Hyundai cars, and this “unlikely” anecdote made the headlines the next morning in Korea. It was a “paradigm shift” for the Koreans who long had strongly believed that the heavy and chemical industries, including automobile, chemical, construction and electronics industries, would lead their country through to a more prosperous future.

In this environment, the National Assembly enacted the Motion Picture Promotion Law in 1995 to replace the Motion Picture Law that had long straitjacketed the cinema industry. By the new law, the government would provide tax incentives for film production, attracting corporate capital into the cinema industry. In fact, major domestic conglomerates, or chaebol, including Samsung, Daewoo and Hyundai, which had home electronics interests, had already been planning for cultural content production taking cues from Japanese Sony Electronics’ acquisition of Columbia Pictures and CBS Records in the late 1980s. Based on the concept of hardware-software synergy, these companies attempted to synchronize connections between electronic device production and areas of entertainment. In relation to this, Samsung and Daewoo started film financing or video production in the late 1980s. In addition, Samsung, Daewoo and Hyundai secured their interests in cable television services, started in 1995, as program providers (PPs).

Following these initiatives, many Korean chaebols advanced into the cultural industry ranging from video production, film import, financing and production, and theatre operation to music production. As a newspaper commented: “The youngsang san-eop [loosely translated into “visual industry” or “image industry”] is rising to the surface as a new field for chaebol competition” (Kookmin Ilbo, 1994). Table 1.1 below illustrates the five largest chaebol’s involvement in cinema and other audiovisual industries as of mid-1995.

Table 1.1 Five largest chaebol’s audiovisual industry activities as of 1995 Weekly Chosun (1995) and Won (1998)

Chaebol Subsidiary Activity
* PP stands for program provider.
Samsung Catch One Pay cable channel (PP)*
Dream Box Film importer/home video producer
Hoam Art Hall Theater
Myungbo Movies Cinema house (Samsung leased two screens under contract)
Nices Film importer/producer of CDs, LDs, CD-ROMs, and films
Starmax Film importer/film producer
Cheil Youngsang Film importer/television program producer
Audiosoft Music producer and distributor
Q Channel Cable channel (PP)
Daewoo Daewoo Electronics Video Business Division Film importer for home video production/film producer
Wooil Video Film importer for video production/distribution
Dong-woo Video Home video producer
Seshin Video Home video producer
Daewoo Cinema Network Cable channel (PP)
Se-um Media Music producer and distributor
Hyundai Seoul Production Film producer
HBS Cable channel (PP)
LG LG Media Film importer/producer of CDs, LDs, CD-ROMs, and films
Mediart Film importer/film producer
Korea Home Shopping Cable channel (PP)
SK SKC Video Business Division Film importer for home video production
Pan Production Film producer and distributor
Mido Film Film importer/film producer
Seoryung Production Film importer for home video production

After several years of operation, these ventures suffered losses. In addition, the Korea Inc. of the mid-1990s began to show signs of economic downturn. Therefore, many chaebols were looking for opportunities to exit from the cultural industry. In a sense, the financial crisis in late 1997 gave them apposite excuses to fold their businesses. In January 1998 SK drastically reduced its video and film businesses and later that year Daewoo abandoned its cinema interests. In particular, the breakup of the Samsung Entertainment Group, which was launched in September 1995 as an integrated organization by bringing all cultural industry-related ventures within Samsung under its umbrella, in January 1999, marked the ending of “the chaebol age of Korean cinema industry” in the 1990s (Ko, 2005b).

The chaebol age of Korean cinema industry, however, did not simply end up as a passing fad but actually laid the foundation for a renaissance of the cinema industry. By holding independent film festivals and film scenario contests with considerable cash prizes, chaebol-run film companies recruited fresh talent, who infused new sensibilities into Korean cinema. In particular, the chaebols supported young directors, equipped with diplomas from prestigious film schools all over the world, who would otherwise have to wait for many years for their debut film. During this period, many competent staff members from diverse lines of business within the chaebols were put into the cinema business. By this, chaebol transplanted their advanced business know-how, including systematic planning and marketing and transparent accounting, to the Korean cinema industry which had long been caught by “mom-and-pop”, “pre-modern” business practices. After the chaebols folded their film businesses, quite a number of those people remained in the cinema industry. For example, when Samsung Entertainment Group was disbanded, 30 out of 45 staff members in its cinema business team went to other film companies instead of returning to their original positions in Samsung Electronics or elsewhere. It is reported that many successful Korean films in recent years have been planned, financed or marketed by those ex-members of the Samsung Entertainment Group (Ko, 2005b).

The Korean Cinema on the Rise

Chaebol’s business rationalization of the local film industry facilitated new players’ entrances into the sector. When asked, “What do you think is Samsung’s contribution to the Korean cinema industry?”, Choi Wan, who oversaw Samsung Entertainment Group’s cinema business team but is now a CEO of IM Pictures, made his answer short and clear: “Samsung made the film business transparent, making way for a new form of capital” (Kim, Min Gyeong, 2004). When chaebol were leaving the cinema industry, venture capitalists and investment firms were entering, looking for fast profits. Right after the Samsung Entertainment Group officially announced its breakup, an action thriller, Shiri, which Samsung had planned and funded as its final project, ironically was a big hit. By attracting 5.8 million theatergoers nationwide, it set a new box-office record in Korea. That Shiri was also partly funded by a venture capitalist gave many prospective investors cues to finance film productions. This new trend must be understood in relation to the revision of the Motion Picture Promotion Law in 1999 which facilitated venture capital’s funding the film production (Kim, Dong Ho, 2005). Venture capitalists funded (partly or exclusively) 23 out of 58 Korean films produced in 2000 (Hwang, 2001). With the influx of capital, as of 2004 the average cost of production per film amounted to 42 billion won, a considerable increase from 0.9 billion won in 1995 (Korean Film Council, 2006).

The revision of the Motion Picture Promotion Law in 1999 noted above indeed made it possible for individuals to finance film productions. What it turned out was the so-called netizen fund. Taking advantage of the existence of huge numbers of online film buffs based on Korea’s developed broadband facilities, a film studio Bom raised a US$85,000 fund from among them. It recruited 200 investors for $425 each, later paying 200% returns (Kim, 2002). After this, many film projects employed netizen funds not only as a source of investment but also a means of marketing. In 2001, Hana Bank launched the “Hana Cinema Trust Fund No.1” of US$7.8 million (Kim, 2003).

In this favorable environment, the Korean cinema industry churned out more blockbusters. In 2001, Shiri’s box-office record was broken by Joint Security Area, whose record was again smashed by Friends a few months later with 8.2 million admission tickets sold in Korea. 2004 saw two movies that set new box-office records by hitting 11.08 million and 11.74 million in viewership, respectively. Silmido revisited North-South Korean relations in the 1970s and TaeGukGi: The Brotherhood of War was a movie about two brothers’ experiences during the Korean War. In March 2006, King and the Clown, a fiction film depicting a king during the Joseon (or, Choson) Period (1392-1910) falling in love with a pretty male clown, set a new Korean record by drawing in more than 12 million audiences. Upheld by these and other well-performing local flicks, the Korean cinema’s domestic market share has continuously increased from 15.9% in 1993 to 35.5% in 2000, and even recorded over 50% in 2001, 2003, 2004, and 2005 (Korean Film Council, 2006).

The influx of capital into the cinema industry has facilitated not only film production but also its consumption. For one, more comfortable viewing conditions introduced by multiplex theaters, largely begun to be built in the late 1990s by some chaebol. Located in major shopping malls in big cities in Korea, multiplexes have enticed consumers back to theaters (Kim, 2003). According to director/producer Kang Woo-suk (2002), multiplexes have become a “playground” for the youth where they can spend time eating, drinking and enjoying movies. The multiplex building boom — the number of screens nationwide increased from 497 in 1997 to 1,132 in 2003 — further facilitated film production. Simply put, in order to fill those increasing screens, multiplexes, many of which were linked to production companies, funded Korean film production, which were showing signs of entertainment-quality improvement and were enjoying more audience acclaim.

In the 2000s, by making strategic alliances with film producers or through vertical integration, Korean film distributors experienced consolidation and concentration. In this regard, some observers noted that Korean blockbusters were possible because they were productions of local cinema majors which controlled distribution networks (Kim, 2003). As of 2006, Cinema Service, CJ Entertainment, Showbox Inc., and Lotte Cinema formed an oligopoly of the Korean cinema industry ranging from production and investment to distribution and theaters. While Cinema Service is founded on traditional Korean cinema industry resources, the other three are subsidiaries of midsize chaebol. CJ Entertainment, which originally started its cinema business in 1995, has extended its business since 1999, and Showbox Inc., and Lotte Cinema advanced into the sector in 1999 (Cinema Service, 2006; CJ Entertainment, 2006; Lotte Cinema, 2006; Showbox, 2006).

Based on its domestic success, Korean cinema has even attracted larger audiences overseas. The blockbuster Shiri was sold to several Asian countries and received both critical and commercial acclaim. In particular, it earned US$14 million at the Japanese box office from 1.2 million theatergoers and topped the Hong Kong box office, a rare overseas achievement for a Korean film at that time (Kim, 2000). Since then, many Korean films have been released for commercial run in foreign theaters and won prizes at such prestigious film festivals as Cannes, Berlin and Venice. In 2004 a total of 193 Korean films were exported to 62 countries earning about US$58 million in marked contrast to 1995’s export figure of 15 films with earnings of US$208,679 (please see the table 1.2 below). As of 2004, Japan was the biggest Korean film importer, accounting for 69.3% of all Korean film exports. Korea earned US$40.4 million from these Japanese exports. With 33 Korean films released in Japan in 2004, Korean flicks took a 10% share of the Japanese film market, a huge jump from their 3.8% market share in 2000 (please see the table 1.3 below). According to Kim Mee-hyun (2005), head of Film Policy Division at the Korean Film Council, the majority of the Japanese audiences for Korean films in 2004 were middle-aged women spurred by their fandom of television drama Winter Sonata and its male lead Bae Yong Jun. As such, Korean cinema’s achievement overseas should also be understood against the backdrop of the Korean Wave led by the popularity of Korean television drama.

Table 1.2 Korean film export (1995-2004) Korean Film Council (2006)

(unit: US$)
Year Amount Exported Increase Rate
1995 208,679
1996 404,000 48%
1997 492,000 22%
1998 3,073,750 525%
1999 5,969,219 94%
2000 7,053,745 18%
2001 11,249,573 59%
2002 14,952,089 33%
2003 30,979,000 107%
2004 58,284,600 88%

Table 1.3 Number of Korean films released in Japan as against total number of films released in Japan (2000-2004) Kim Mee-hyun (2005)

Year Number of Korean films Total number of films released in Japan Market share
2000 14 362 3.8%
2001 13 349 4.2%
2002 10 347 3.4%
2003 14 335 4.7%
2004 33 339 10%

The Commercialization of Korean Television

As noted, the globally flourished “information society” discourse, upheld by advances in IT (information technology) and digital development, and citizens’ demands for a more liberal public communication environment led to the media liberalization in Korea beginning in the late 1980s. In 1989, the government-assigned Commission for Broadcasting System Research suggested an idea to launch cable television in 1995 as the mainstay of digitized, integrated communication infrastructure in the coming Information Age. In 1990 the National Assembly enacted the new Broadcasting Law, by which the government granted a license to the commercial Seoul Broadcasting System (SBS) to begin operation from 1991. SBS was the first commercial television station to be established since 1980 when the then Chun Doowhan regime forcibly reshuffled 29 broadcasters into an oligopoly of two public broadcasters, Korea Broadcasting System (KBS) and Munhwa Broadcasting Company (MBC).

In December 1991 the National Assembly passed the Cable Television Act. Based on the Act, in August 1993 the Ministry of Information selected 20 applicants to become cable television program providers (PPs) who would run their own channels. As planned, in March 1995 cable television services started across the country. In addition, four new regional commercial terrestrial television stations started operation in the same year. In 1997 another set of four regional channels started to cover their respective provinces. In 2002, satellite channels were added to this television platform, and digital multimedia broadcasting (DMB) started in 2005. In a nutshell, since the 1990s Korea has entered a multi-channel television era, marked by intense competition for audience attention (Korean Broadcasting Commission, 2006).

This competition was spearheaded by SBS, the new commercial broadcaster. Although technically a regional broadcaster covering Seoul and its vicinities, it accounted for almost half of the Korean population. In addition, by providing its programs to other regional stations newly launched in the 1990s, SBS practically functioned as a network like KBS and MBC. The advent of SBS was “threatening” to KBS and MBC which, although tagged as “public” broadcasters, had relied on advertising for their finances. In the early 1990s, KBS relied more on advertising revenue than on the reception fee by 61% to 39%. In the same period, 98% of MBC’s revenue came from advertisements (Kim, 2001). Indeed, SBS publicly announced that it would compete with the established broadcasters for audience ratings in television dramas, in particular.

The television drama has always been the centerpiece of television watching among Korean audiences. For example, in the annual lists of ten television programs with the highest audience ratings, 5 or 6 are usually television dramas (Lee, 2005). By presenting the everyday lives of ordinary people, including their social relations, agony, despair, joy and victory, television dramas have entertained Korean audiences. In the 1990s, audience ratings became the matter of primary concern for broadcasters, with an emphasis on television dramas’ commercialism. Spurred by SBS’s “television drama offensive”, characterized by increased numbers and diversified contents of television dramas, broadcasters engaged in the “drama war” by making every effort to enhance the audience ratings of television dramas (Ko, 2004). They extended into previously untouched topics, shot on locations that included foreign countries, sped up the flow of stories with better scripts and pictures. In this process, the overall entertainment quality of television dramas has also improved while chastised for their low taste and sexual morality by the elitist press.

These days, many Korean television dramas record ratings of more than a 30% share in a market where the three terrestrial networks air as many as more than 30 television dramas per week (Yi, Jiyoung, 2004). Fans’ enthusiasm for television dramas is such that they often form cult-like Internet fan clubs of their favorite television dramas and provide feedback — often in the form of “pressure” to alter storylines — to television producers, and produce parodies of the dramas in the form of magazines, newspapers and posters. Because these ardent fans are leaders in opinions about the programs, and they form the guaranteed market for the dramas’ sales of video-on-demand, DVD and other spin-off products, networks cannot disregard their fandom. Networks and other television drama producers often invite fan club members to locations, arrange meetings with their stars and even allow them to play minor roles in television dramas (Gu, 2004). According to Yun Seokjin (2004), a television critic, Korean television producers have made every effort to gratify audiences.

Korean Television Drama Exports

It was around the turn of the 1990s when the Korean television industry began to export television dramas. According to Bak Jaebok, the head of the International Exchange Department at MBC, it was not until 1992 that MBC first put up its own booth at the Cannes international television programming market (Korea Culture and Tourism Policy Institute, 2005). At that time, MBC sold Eyes of the Dawn to Türkiye Radyo Televizyon (TRT), Turkey’s national broadcaster, marking the first Korean television drama to be exported to a European country, and What Is Love All About to Hong Kong’s Asia Television Ltd. (ATV) (Kim and Han, 2001). With media liberalization sweeping across Asia, the scale of Korean television programming exports gradually increased.

Most observers agree that the Korea Wave, a phenomenon where Korean popular culture is enjoying fandom overseas, started in China with the broadcast of What Is Love All About. In 1997, China’s national China Central Television (CCTV) aired it, where it became a massive hit. On popular demand, CCTV had to rebroadcast the Korean television drama in 1998. Since then, more Korean television dramas have received popular receptions from audiences in China, Hong Kong, Taiwan, and Vietnam. In particular, Korean television dramas accounted for 56% of all foreign programming imports to Vietnam in 1998 (Korea Culture and Tourism Policy Institute, 2005). About that time, boy band H.O.T. and dance music duo Clon were winning popularity in the region thanks to their pretty faces and powerful dance moves. Therefore, commentators in East Asia began to talk about the 韩流 (“Korean Wave”) of popular culture (Heo, 2002).

According to Chae Jiyoung, senior researcher at the Korea Culture and Tourism Policy Institute, the Korean Wave was possible not because the government or broadcasters in Korea had certain visions or strategies for popular cultural exports. Rather, international market conditions worked favourably for the exports of Korean television dramas which were gradually improving in commercial quality based on domestic competition (Korea Culture and Tourism Policy Institute, 2005). In the late 1990s, the popularity of Japanese television dramas began to weaken in Taiwan. At this juncture, Taiwanese importers began to import cheaper Korean television dramas to fill this opening. As middlemen, they also helped Korean television dramas penetrate into markets in Hong Kong and China. In addition, the economic downturn in Asia in the late 1990s made the cheaper Korean programming a popular alternative in these media markets. Korean television dramas were a quarter of the price of Japanese ones, and a tenth of the price of Hong Kong television dramas as of 2000 (Lee, 2003).

The structural context of media liberalization in East Asia should be further taken into account. East Asia was not a region in which the television programming trade was active up until the 1980s. According to Waterman and Rogers (1994), “countries of the Asian region as a whole have [sic] a relatively low dependence on imported programming, and a relatively very low dependence on intra-regional program trade” (p. 107) before 1990s. Many Asian governments had for a long time been on the defensive against cultural influences from foreign countries. They, however, began to open their television programming markets in the 1990s following the global trend. At the same time, economic development among many Asian countries afforded their citizens leisure and facilities to consume more cultural artefacts. Even the previously tightly controlled television markets in China and Vietnam have loosened their television programming import policies. For example, as of the early 1970s imported programs occupied less than 1% of total airtime in CCTV of China. In the late 1990s, the percentage rose to 20-30% according to different regions in China (Hong, 1998, p. 71).

Since their initial popular reception within what Chua Beng Huat (2004) calls the pan-Chinese pop sphere (comprising China, Taiwan, Hong Kong, and Chinese communities in Southeast Asia) and Vietnam, Korean television dramas gradually expanded their reach. A tear-jerker Winter Sonata was first broadcast on the Japanese NHK BS Satellite in April 2003, and was re-aired on the NHK BS in December of the same year. On popular demand, NHK aired it for the third time, this time on its terrestrial network in the summer of 2004. Although it was the third run, and despite the fact that it was aired on Saturdays at 11:10 pm, Winter Sonata, nicknamed Fuyusona in Japanese, commanded an average 16-17% share of the market. In late 2004, the Korean television drama made a fourth run, a record for a foreign programme, on the Japanese public broadcasting network. This time, Winter Sonata was aired with subtitles instead of dubbing (which is conventional for imported programs), in compliance with the local fans’ demands to enjoy the drama with a “genuine Korean feel” (Kim, Hyeon Gi, 2004). In particular, actor Bae Yong Jun’s fandom in Japan was such that when he visited the country in April 2004, about 5,000 female fans gathered at Tokyo’s Haneda airport to greet him (Korea Times, 2004).

When the popularity of Korean television dramas was gradually weakening in the pan-Chinese pop sphere, Dae Jang Geum (” Jewel in the Palace “) ignited a bigger craze for Korean popular culture. Dae Jang Geum is an epic drama about a real life story of a woman who rose from a lower class to the position of master chef in the royal palace during King Jungjong’s reign (1506-1544) in the Joseon dynasty. In May 2005, the show’s final episode became the most-watched television show in Hong Kong history with more than 40% audience ratings. Chinese president Hu Jintao and Hong Kong film stars including Andy Lau and Chow Yun-fat have publicly confessed that they are fans of Dae Jang Geum (Park, 2005).

One may wonder why Korean television dramas are popular among foreign audiences. I would argue that the cultural consumption is a negotiation process between consumers and cultural artefacts. In this process, consumers invest their time, money, energy and emotional allowances in cultural commodities in order to acquire pleasure and make meaning. Many commentators note that Korean television dramas touch the right chord of Asian sentiments, such as family values and respect for elders (Chon, 2001; Heo, 2002). Japanese housewives, in particular, are reported to have been attracted to Winter Sonata because it reminds them of the good old days when they cherished pure love (Kim, Hyeon Gi, 2004; Korean Overseas Information Service, 2004). For audiences in developing economies such as China and Vietnam, Korean television dramas are more acceptable than Japanese or American ones because the former retain traditional values while having achieved the technical sophistication comparable to that of the latter. Therefore, Korea is “viewed as a prominent model to follow or catch up, both culturally and economically” (Choe, 2001). In this sense, we can propose that Korean television dramas have provided audiences with better terms of negotiation for pleasure than other national productions.

The Korean Wave is now expanding to Europe, Africa, and the Americas (Li, 2005). It is reported that when the Korean president Roh Moo-hyun visited Mexico in 2005, local fan club members of Korean actors Jang Donggun and Ahn Jaewook sat in outside Roh’s hotel and playfully asked him to send these stars to Mexico (Choe, 2005). According to the Ministry of Culture and Tourism (2005), the total amount of Korean television program exports dramatically increased from US$5.5 million in 1995 to US$71.4 million in 2004. The Ministry of Culture and Tourism expects that broadcast program exports in 2005 will surpass the US$100 million mark (Park, 2005).

Government Reaction to the Korean Wave

The phenomenon of Korean pop culture, having become the rage across Asia, had begun to hit the headlines in Korea since the late 1990s. By this, Korean policy makers saw that the export-oriented economy had found a new overseas market in the midst of the “national plight” of the International Monetary Fund (IMF)-directed economic restructuring. Motivated by the phenomenal success of Korean popular cultural products abroad, the government designated “cultural technology” (meaning the technologies that produce television drama, film, pop music, computer games, animation, etc.) as one of the six key technologies along with IT and BT (Bio-technology) that should drive the Korean economy into the 21st century, and pledged a huge amount of financial investment and administrative support to domestic cultural industries. For this cause, the government established the Korea Culture and Content Agency in 2001, with a budget of US$90 million for that year (Ministry of Culture and Tourism, 2001).

The government has also encouraged content producers to cultivate overseas markets by providing financial support. In 2004, the government subsidized 473 million won to independent producers and cable channel PPs for their participation in international content markets. Understanding the importance of such a marketplace, the Ministry of Culture and Tourism has even hosted an international content market event, BCWW (Broadcast Worldwide), every year since 2001. It was reported that about 3,500 buyers, investors and other media professionals from around the world attended the BCWW 2005. Domestic producers were reported to have made a US$15 million worth of sales during this four-day event. In particular, television dramas including Lovers in Prague and My Name is Kim Samsun accounted for about US$9 million of sales (Broadcast Worldwide, 2005).

The government support to the cultural industries is, however, not always favourably evaluated. Shim Sangmin, an expert on Korean cultural industries, argues that the government is “hypocritical” in its attitude to cultural industries. As noted above, the government announced a plan to support “cultural technology” (CT). On examination of the actual budget spending, the CT sector only accounted for 0.6% while the IT sector received 22.5% of the total amount that the government spent on the “six key technologies” after the government’s announcement (Korea Culture and Tourism Policy Institute, 2005). Some even argue that the government’s publicity campaigns for the Korean Wave, such as the Korean Embassy-sponsored road shows of Korean films, or the Korean Overseas Information Service’s (which is under the Government Information Agency) provision of television dramas to broadcasting networks in Egypt or Mongolia free of charge, only caused backlash against Korean popular culture among some foreign audiences (Ko, 2005a; Ko, 2005c; Li, 2005).

Government policies have not always been implemented smoothly at home. The “compulsory television programming outsourcing system” is a case in point. In expectation of the commercially motivated competitive television environment in the 1990s, the government adopted a measure to ensure television programming diversity. In 1991 the government began enforcing the “outsourcing system” on terrestrial broadcasting channels so that up to 3% of all broadcasting programs should be supplied by independent production companies. Thereafter, annual increments in terms of the percentage of outsourced programming had been put in force, finally reaching 35% on MBC and SBS, and 30% on KBS in 2004 (Ministry of Culture and Tourism, 2005).

One may argue that this system contributed to an engendering of the Korean Wave since regionally popular television dramas like Winter SonataLovers in Paris and Love Story in Harvard came from independent producers. However, there have been frictions in practicing this programming outsourcing system. While the television networks understand the government’s intention of the system, they have a view that the latter is pushing the system without full consideration of the reality. In fact, most independent production companies are small-sized and ill-equipped in terms of manpower, facilities, and financial conditions. Although there were 416 independent production companies registered with the Ministry of Culture and Tourism as of May 2004, 48.1% had not produced and supplied any programs to a broadcasting network in the period of 2001 and 2004 (Ministry of Culture and Tourism, 2005). When the networks make deals with independent production companies for program provision, they have to supervise the indies from program planning to actual production and post-production stages. In most cases, broadcasters also provide production equipment to the indies. In this situation, the three television networks have resisted the compulsory programming outsourcing system itself and the government policy to push up the rate of outsourced programs on terrestrial television (Yi, Man-je, 2004).

Since the relationships between networks and independent productions are not on equal terms, it is reported that unfair “subcontracting” practices prevail between them. For example, some independent producers are forced to make a contract in which a broadcasting network pays to them an amount of less than half the actual production cost. It is also reported that the networks have even “threatened” the indies with curtailing the payment specified in a contract. Further, once the indies’ programs are broadcast on terrestrials, copyrights of these programs are largely transferred to the networks. As of 2004, the three network broadcasters — KBS, MBC and SBS — owned 91. 2% of outsourced programs’ copyrights (Ministry of Culture and Tourism, 2005). Therefore, while KBS enjoyed a net profit of more than 2 billion won from a television drama Full House starring Song Hyegyo and pop sensation Rain (“Bi”), its production company is known to have put out a deficit (Yi, Man-je, 2004). In order to correct this unfair relationship between network broadcasters and independent production houses, the Ministry of Culture and Tourism is considering setting up a new terrestrial channel which will air programs exclusively produced by independent productions (Ministry of Culture and Tourism, 2005).

Conclusion and Discussion

What the so-called Bae Yong Jun fandom (or, “Yon-sama syndrome”) in Japan may cause an average Korean citizen like me to feel would be “puzzled pleasure” …. While we feel proud of ourselves, the long-time cultural importer, having become a cultural exporter, we are puzzled as to what in our culture is enchanting the foreigners. (Lee, 2004)

This statement from a current affairs magazine nicely depicts Koreans’ reaction to the Korean Wave phenomenon. Korea has long waged a struggle for cultural continuity, confronted by a series of threats of foreign cultural domination. Because of a deep-seated “underdog” consciousness in terms of cultural exchanges, it was not easy for them to believe the extent of Korean pop culture being popularly consumed in other countries.

In fact, even the Korean government did not have a clear vision for popular cultural exports. Although it began to support domestic cultural industries in the 1990s, it was largely on the defensive. While the government might be credited with drawing up policies to bring new players and funding sources into the industry, many commentators and industry players in Korea tend to discount the government’s contribution in engendering the Korean Wave. They even remarked that the government only jumped on the bandwagon when the phenomenon became very apparent. Rather, they gave greater credit to the roles of directors, planners, writers, actors and other production crews, avid fans, and pathbreaking traders in the growth of Korean popular culture and its international reach (The Sisa Press, 2005). In addition, the changing global and regional mediascape acted favourably on Korean popular cultural exports. In the end, Jeon Hyeon-taek, head of the Export Strategy Team at the Korea Culture and Content Agency, acknowledges that the Korean Wave phenomenon is an “unintended success” (Joong-Ang Ilbo, 2005).

The much feared takeover of Korean culture by foreign images brought by imported media was not realized (Im, 2000). Local audiences, who had been longing for an alternative to Hollywood fare, welcomed new Korean movies and television dramas, which not only connected with their everyday lives but also achieved technical sophistication. In January 2006, however, the Korean government announced its plan to halve the screen quota for domestic movies from 146 days to 73 days from July 2006 under U.S. pressure. Domestic actors, directors and other members of film crews put up protests, arguing for the necessity of maintaining the existing level of the screen quota policy to counterbalance Hollywood blockbusters (Kim, 2006). Despite the strong opposition from filmmakers, the Cabinet passed a bill to halve the screen quota in March 2006. The original problematics which surrounded the Korean cultural industries decades ago are still around.

What cultural and political meanings can we elicit from the Korean Wave phenomenon on the international level? For most Asians, other locales of Asia have long been the unknown. As Waterman and Rogers (1994) called American culture “the common denominator” of popular culture in East Asia, most Asians have long referred to the West for melodramatic imagination as well as for modernization. However, in the 21st century, we are consuming images that originated from Japan, Thailand and Korea. The vitality of East Asian popular culture is growing, evidenced in the success of Japanese television drama and animation, Hong Kong and Thai movies, and what is called the Korean Wave. These changes are meaningful for regional cultural exchanges that have long been denied their prosperity or existence by the dominance of a hegemonic global culture. Now, the dialogue among Asians has begun.