The K-Pop Wave: An Economic Analysis

Abstract

This paper first shows the key role of the Korean entertainment firms in the K-pop wave: They have found the right niche in which to operate — the ‘dance-intensive’ segment — and worked out a very innovative mix of old and new technologies for developing the Korean comparative advantages in this segment. Secondly, the paper focuses on the most significant features of the Korean market which have contributed to the K-pop success in the world: the relative smallness of this market, its high level of competition, its lower prices than in any other large developed country, and its innovative ways to cope with intellectual property rights issues. Thirdly, the paper discusses the many ways the K-pop wave could ensure its sustainability, in particular by developing and channeling the huge pool of skills and resources of the current K-pop stars to new entertainment and art activities.

Last but not least, the paper addresses the key issue of the ‘Koreanness’ of the K-pop wave: Does K-pop send some deep messages from and about Korea to the world? It argues that it does.

Keywords: entertainment, comparative advantages, services, trade in services, Internet, digital music, technologies, intellectual property rights, culture, Koreanness

JEL Classification: L82, O33, O34, Z1