HOW KOREAN DRAMAS GOT THEIR START IN ASIA
Korean dramas can very profitable and very popular in Asia and elsewhere. On why Korean dramas became popular in Singapore not Japanese ones, Melissa Kok wrote in The Straits Times: “Korean Wave eclipsed the Japanese mania in the early to mid-2000s” at least in part because of “the high cost of bringing Japanese content into Singapore. When Man Shu Sum was the executive director of the Taiwan office of Television Corporation of Singapore (now MediaCorp), he brought in Korean dramas for local television in the late 1990s because they were a cheaper alternative to titles from Japan.According to him, Korean drama serials back then cost around US$800 an episode compared to up to US$15,000 an episode for a Japanese drama. "We decided to acquire Korean drama, which looked very primitive in production value but the faces were refreshing and the story lines were quite engaging," he says. [Source: Melissa Kok, Asia News Network (The Straits Times), April 26 2012]
“It worked. Singaporeans became hooked on K-drama. Popular shows would easily attract a viewership of more than 200,000, notes Man, who is now managing director of Raintree Pictures. Some of the memorable Korean dramas that emerged from that time include the love story Winter Sonata (2002), which starred Korean television heart-throb Bae, and the weepie TV series Autumn In My Heart (2001). Currently, at least 24 Korean dramas are airing weekly in Singapore on several cable TV channels such as VV Drama, KBS World, ONE, E City and tvN.
“Assistant professor Liew Kai Khiun of Nanyang Technological University, whose research areas include television dramas and popular music in Southeast Asia, partly attributes the Hallyu revolution to the Korean government's push to promote all things Korean abroad.He says: "Unlike their Japanese counterparts, the Korean government and the media industry invest significantly in promoting the K-wave in the world as part of the efforts in strengthening the republic's soft power." ... In 2006, a website was even set up by the Korea Tourism Organization which combined cast details of popular Korean dramas with information about filming locations to attract visitors.
Production of Korean Drama
Korean dramas and series were originally produced in house by the television channels themselves, but since the 2000s they have mostly been outsourced to independent production companies. As of 2012, about three quarters of of all Korean dramas were produced this way. Competition is fierce among the independent production companies. In 2012, out of 156 registered firms, only 34 produced dramas that were broadcast. [Source: Wikipedia]
The costs of production are shared by the producing company and the broadcaster, with the broadcasting channel usually covering around 50 percent of the expenses. If top stars and famous scriptwriters are employed, they may cover even more. The rest of the budget has to be covered by the production company, often with assistance from sponsors.
In Korea, often the biggest expense is the appearance fees of top stars who are often necessary to generate interest in a drama and get it made. In some cases, payments to the actors can take up as much as 55-65 percent of the entire budget, compared to is 20–30 percent in Japan, and approximately 10 percent in the U.S., where drama production companies tend to avoid casting famous actors to keep their costs down. Everything else, including salaries of lesser-known actors, extras, and technical staff, location rent and other expenses, have to be covered from the remaining amount. It is not uncommon for production companies to overrun their budgets after already paying the stars and cannot pay other salaries. In 2012, actors held a demonstration in front of the KBS’s headquarters to protests this situation.
Actors are usually paid after the last episode is aired at the end of the month. In series made by smaller production companies for cable channels, there have been cases where the companies went bankrupt and could not pay their actors and crew, while the channel denied all responsibility, claiming all liability was with the bankrupt production firm. Big stars may earn as much as US$100,000 per episode. Bae Yong-joon, the star of Winter Sonata reportedly received US$250,000 per episode for The Legend in 2007.
A typical Korean drama may cost as much as US$250,000 per episode, and historical dramas cost more than that. The Gu Family Book cost US$500,000 per episode. Producer Kim Jong-hak spent as much as US$10 million on Faith, which was considered a commercial flop, resulting in the inability of Kim to pay crew salaries and other costs. Kim, who had produced successful dramas such as “Eyes of Dawn” and “Sandglass”, committed suicide after he was accused of embezzlement.
Income for Korean Dramas
Income fom Korean dramas in generated three primary ways: 1) commercials; 2) product placements; and 3) the sale of episodes, generally to overseas channels, streaming services or satellite stations. Product placement income is shared by the producer and the channel. The channel keeps 100 percent of the advertisement income when the show is initially aired in South Korea. The money from such ads can amount to US$300,000-400,000.
Shows sold to overseas channels and stations are sold on a per episode basis that varies greatly depending on the popularity of the drama and the size and wealth of the market is sold to. The highly successful drama “My Love from the Star” was sold to China for US$40,000 per episode, regarded as a bargain considering it draw billions of views on streaming services, but its increased popularity led to a sharp rise in the price for the Chinese distribution rights of future Korean dramas. Advertising and streaming fee revenues go to the broadcaster, station or service that shows the drama.
On commercials for dramas show in South Korea, Lore posted: “There are usually three commercial breaks during a drama broadcast, lasting about eight minutes in aggregate. That is great, the broadcaster is making money so they can keep airing dramas! Yay us?! Well, yes and no. Yay the broadcaster, who is making ad revenue. But nay the production company, which sold the drama airing rights to the broadcaster to begin with. You see, making a Korean drama “in house” (or the broadcaster assuming all production costs) is far more expensive than picking up a show that is made by by an independent production company. These independent production companies are behind 80 percent of the Korean dramas that are broadcast (as of 2013). Of course the broadcaster is paying the production company for the show (a set amount mind you), so it is not a definite nay by any means (and should actually be a yay). Instead it is sometimes a resounding nay for the people the production company are supposed to pay. [Source: Lore, in K Drama, Korean Drama, October 2, 2013]
On product placements, AFP reported: “South Korean firms now spend millions of dollars ensuring lovers in popular soap operas confess their feelings via Samsung smartphones, drive in Hyundai cars and move into a house equipped with a giant LG TV. With the growing popularity of South Korean programming worldwide, including the Middle East, product placement is all over the shows and viewers seem to be buying into all of it. The export success of South Korea’s TV dramas has spawned a hard-selling world of branded entertainment that uses product placement to push everything from smartphones to lipsticks. The so-called Hallyu, or Korean Wave, of TV shows and pop music conquered most of Asia long ago and, in recent years, found new, devoted fans in the Middle East, Latin America and North Africa. The vast audiences opened stealth marketing opportunities that have become distinctly less stealthy as competition has intensified. [Source: AFP, June 22, 2014]
Sometimes Big Korean Stars Get Paid Big Money While the Minnows Are Shortchanged
“Nearly half of the budget for the drama was spent to cast a couple of actors playing leading roles,” official for a Korean acting union said. “An independent drama producer starts shooting normally on a tight budget given by the broadcaster. A large portion of this is paid to a handful of leading actors,” a media expert said. “The producer usually needs extra money to fully compensate others. To that end, the firm sells the drama in various ways, but this is not always successful.” [Source: Lore, in K Drama, Korean Drama, October 2, 2013]
Lore posted: “ The preceding quotes are referring to the drama “Rascal Sons”, which aired this past spring on MBC. Rascal Sons was produced by an independent company, To Be Enterprise (TBE). The CEO of TBE, after realizing his business model was heavily flawed, pocketed the cash and fled. Basically – he budgeted half of the production monies on two people in order to be picked up by a major broadcast station, MBC in this case, and then realized he had no money left over to gain a profit and pay out all expenses. Unfortunately, the ones that suffer in this mess are the people who put on the show – the actors and actresses, the crew, the writers and pretty much anyone that expected a paycheck from the company that decided to put on the show in the first place. Unfortunately this is not an isolated incident. Faith, the last drama featuring Lee Min Ho had the same problem. Sadly, the Producer committed suicide in the midst of the legal fallout from the nonpayment of the cast and crew.
“Sadly, this is a self-propagating cycle. Independent production companies will go after top talent in order to attract major broadcasters. The broadcasters will pick up the dramas that have top talent, but at a tightly budgeted price. The production company, realizing they have to pay the top stars mega bucks, will soon realize their business model is flawed (but hey, they are on air! So all is not lost. Wait…it kind of is) and face the reality of not being able to pay the sound guy or the editor. It is a win-win for the broadcasters but a loose-loose for everyone that is involved in making the drama if the production company is not turning a profit.
“The major broadcasting stations (MBC, SBS, KBS) have pushed for having all independent production companies they work with assume an insurance policy that basically makes sure the cast and crew are paid. But with the assumption of insurance comes an increase in expenses for the production company, which will in turn drive them to seek higher purchase (or licensing as it is often referred to) prices for their dramas if they want to remain profitable.
“Of course this is not the rule. There are independent producers that pay their talent and their crew while retaining a decent profit margin. But the fact remains- this is a flawed system. As long as independent production companies will assume low budgets set by the purchase prices of their productions there is the threat of nonpayment. After all- robbing Peter to pay Paul leaves Peter with a sad look on his face and a tin can.
Making a Korean Drama
Drama Beans, perhaps the best site on Korean Dramas, says: “Miniseries and special production dramas typically begin filming a month or two in advance of their premieres, although there are some that begin filming several more months before that (reasons: special effects, location shoots, production considerations like large-scale battle scenes). I’m excluding daily dramas, long-running serials, and sitcoms from this because those can have different schedules. [Source: Drama Beans, Lore, in K Drama, Korean Drama, October 2, 2013]
“This head start allows dramas to have a few episodes in the can before the episodes hit the air, but the demands of production can catch up mighty quickly after that, and soon shows will be filming episodes the week they air. Two episodes per week means that each episode gets a few days for filming and editing, with not much room for extensive re-shoots and the like. Sleep deprivation is a given; mistakes a distinct possibility.”
“As dramas air and as they achieve a fan base, the schedule becomes tighter and tighter. They respond to fan feedback (and by they I mean the writers, but with the consent of the production team, of course) and change it up. The cast and crew are suddenly in a rush to film the latest script in time to get it on air. After all, each episode needs to see the editors’ room and be readied for production – and some of these episodes are literally filming only a few (or couple- or one in the worst case scenario) days before they air. Again, the business side (or money-money-money) comes into play, as described by Sensei Drama Beans:
“The issue can get complicated if you look at all the various factors involved in bringing drama production to its current state — it’s not just a matter of saying, “Well, just start shooting sooner then.” There’s the fact that increasingly, drama series are being produced by outside production companies and then licensed to the broadcasters, rather than being developed in-house as in earlier days. With broadcasters a step removed from the process, money seems to float to the fore as the big driving force of everything — everyone wants everything done fast, and as cheaply as possible.
Government Assistance and Promotion of Korean Dramas
The Asahi Shimbun reported: “Various forms of assistance for the digital content industry are offered, greatly contributing to the remarkable achievements of pop culture from South Korea. Good examples of successful cases is the global popularity of K-pop singing group BTS and the “Parasite” film, which was recently chosen as the best picture in the Academy Awards. There appear to be no limitations to the spread of South Korean pop culture. Masaki Tsuchida, a film producer living in South Korea, noted that those achievements can be attributed to Seoul’s “nationwide efforts to nurture drama, movie and other industries while regarding them as important export businesses.” [Source: Asahi Shimbun, July 5, 2020]
“When he took office in 1998 in the wake of the Asian currency crisis, then-South Korean President Kim Dae-jung declared himself the “president of culture.” As Hollywood movies dominated the box-office lists throughout the world at the time, Seoul started financing content industries — including films and TV dramas — and developed legal systems to promote exports as part of its economic recovery strategy. Before that, TV plays from South Korea had already been widely accepted among broadcasters in Taiwan and Southeast Asia since the first half of the 1990s, because they were “much cheaper than their Japanese counterparts and comprised many installments.”
“Cashing in on the trend, the South Korean government strengthened promotion, leading to a further expanded market of dramas outside the nation. This also resulted in higher broadcasting rights fees and production budgets. Guaranteed salaries for new actors and scriptwriters rose as a result, attracting fresh new talent to the entertainment industry. In 2009, the South Korean government set up the Korea Creative Content Agency (KOCCA) to select online animated works and other creations popular among young consumers to be made into dramas and other adaptations.
“The KOCCA currently has locations in eight regions overseas, including fast-growing Indonesia, the United Arab Emirates, where South Korean products have exploded in popularity, and the United States. Through the establishments, it is attempting to sell titles suitable for markets through business discussions with the makers of video games, animations and dramas in the countries. Hwang Seon-hye, director of the KOCCA Japan Center, said “various kinds of content from South Korea” are now available. According to an estimate by the KOCCA, exports of dramas, films, video games and other such services totaled 1.056 trillion yen (US$9.6 billion) in 2018, double the figure for 2012.
Problems with the Korean Drama Business
In 2013, the Dong-A Ilbo reported: Korean dramas “are not high-end products in the global market. Kang Myeong-gu, director of the Seoul National University Asia Center, said in his study of the Chinese market for Korean dramas that Chinese with higher education and income prefer American and Japanese dramas, the middle class like Chinese and Hong Kong dramas and the low class tend to watch Korean and Taiwanese dramas. Those who watch Korean dramas keep watching them while complaining about absurd stories, saying, “What a mess! What a mess!” [Source: Dong-A Ilbo August 1, 2013]
“Hong Seok-gyeong, a press information professor at Seoul National University who studied on the European market for Korean dramas, said that loose structure of Korean dramas compared to American drama’s perfect plot and story is the secret of the popularity of the former in Europe. European fans made a ten commandments of Korean dramas based on commonly occurring events. Following is part of the commandment: “Male protagonists are all rich and have personality problems,” “Cancers cost the lives of protagonists” and “Any complex problem can be solved after a big fight.”
“Korean dramas are now having a hard time even in low-quality drama markets.Though Korean dramas are loved worldwide, the production environment is very poor, often making headlines in newspapers as social issues. Protagonists of hit dramas file lawsuits to receive pay. The drama “Equator Man” was produced depending on drama scripts that arrived piece by piece and the drama barely made broadcasting time for each episode. Toward the end of the series, the running time became shorter than it should have been.
Japanese Make More Money From Korean Dramas Than Koreans
Kang Hyun-kyung wrote in the Korea Times: “Korea's cultural content providers rely on a single income source as they make money by exporting only cultural products, such as dramas and animation. But their Japanese counterparts earn more profits through multiple income sources. The National Assembly Research Service said Japanese content providers made the most of "cultural derivatives" of the Korean wave such as characters, games, videos and music, explaining how the Japanese became more business-savvy. [Source: Kang Hyun-kyung, Korea Times, February 2, 2010]
“KBS earned 30 billion won in revenue by selling soap opera "Winter Sonata" (2002) to Japan. Yet, on the island nation, importers and distributers made 1.2 trillion won with the hit drama. In the current issue paper, the parliamentary think tank said Japan's strong marketing infrastructure for cultural products explains how they came to benefit more from the Korean wave known as "hallyu.'' "For example, after Pocket Monsters became a hit game, Japanese content providers produced a variety of cultural derivatives such as comics, posters and toys," the paper said.
The think tank said those derivatives were thoroughly planned from the very beginning of the production of the game. However, Korea's relatively poor marketing infrastructure makes it difficult for made-in-Korea content products to go global. According to the Global Entertainment and Media Outlook (2008 to 2012), Korea ranked 9th in the overall ranking of global content business, accounting for 2.45 percent of the global market. The United States is unrivaled, taking up 36.7 percent of the world market, followed by Japan with 7.93 percent and Britain with 7.43 percent. Industry experts said the nation's standing in global content business is one of the core standards determining the national competitiveness.
Product Placements in Korean Dramas
On product placements, AFP reported: “South Korean firms now spend millions of dollars ensuring lovers in popular soap operas confess their feelings via Samsung smartphones, drive in Hyundai cars and move into a house equipped with a giant LG TV. With the growing popularity of South Korean programming worldwide, including the Middle East, product placement is all over the shows and viewers seem to be buying into all of it. The export success of South Korea’s TV dramas has spawned a hard-selling world of branded entertainment that uses product placement to push everything from smartphones to lipsticks. The so-called Hallyu, or Korean Wave, of TV shows and pop music conquered most of Asia long ago and, in recent years, found new, devoted fans in the Middle East, Latin America and North Africa. The vast audiences opened stealth marketing opportunities that have become distinctly less stealthy as competition has intensified. [Source: AFP, June 22, 2014]
“While details of product placement deals are not disclosed, industry sources say exposure on popular shows costs at least US$10,000 and much more for a hit drama featuring A-list stars with a regional following. The biggest spender of all is Samsung – the world’s largest technology firm by revenue – which sponsors about two thirds of all domestically-produced soap operas, according to Kim Si-Hyun, head of 153 Production, a major PPL agency in Seoul. "It’s a full package, meaning all visible consumer electronics like smartphones, computers, cameras, air conditioners, TVs and refrigerators are Samsung products, from beginning to end," Kim said.
“Commodification of the dramas begins at the earliest stage of production, once a script writer has produced a basic storyline listing characters and their professions. The workplaces that will feature in the show are offered for sale to real companies looking for exposure. According to Kim from 153 Production, the workplace of a lead character can go for between US$500,000 and US$1 million.
“That was how the female lead in The Heirs – a teenage romance that was a huge hit in Asia last year – ended up working for Mango Six. The Seoul-based cafe chain paid more than US$500,000 to feature in the show as the workplace of a poor teenager courted by two wealthy classmates who constantly sip Mango Six signature juices while waiting for her. "We made sure that the most dramatic, romantic scenes, like the two men professing their love for her or fighting over her, take place in our store, with our drinks on the table," said Kang Bong-Joo, the firm’s marketing manager. The store in Seoul has become a major tourist attraction and Chinese branches of Mango Six in cities such as Shanghai draw customers wanting the same juices consumed by the two male leads. "It really helped our expansion plans in Asia," Kang said.
“Not everyone is happy, though, and internet forums devoted to individual shows often carry complaints from regular viewers. "These days I don’t know if I’m watching a TV drama or a home shopping channel," one disgruntled fan wrote. While the placement in some dramas is relatively unobtrusive, in others it can jar glaringly as a character wolfs down half a dozen branded doughnuts for no apparent reason. Kim acknowledged that seamlessly squeezing dozens of products into an hour-long episode was a challenge, but insisted it was a "critical part" of the contemporary television industry.
“With huge fees demanded by a limited pool of A-list actors, production costs have skyrocketed to the point where product placement is no longer just desirable, but essential, Kim said. "We are aware of the potential for a viewer backlash ... and we try our best to keep a balance." Product placement income is shared by the producer and the channel.
K-Pop and K-Drama Money Machine Spread to Beauty and Fashion
Hideo Shinada of Nikkei Entertainment wrote: “The Korean wave has a ripple effect beyond the content industry. TV shows and movies feature a wide array of South Korean home appliances, cars and cosmetics, creating demand for those products among overseas audiences. A growing number of consumers have likewise developed an interest in South Korean food and fashion through entertainment, and many of them shop at South Korean chains. [Source: Hideo Shinada, Nikkei Entertainment, January 8, 2015]
Ryan General of Nextshark wrote: “A huge part of the world has collectively embraced two of South Korea’s main exports: K-pop and K-drama. Their influence has so far transcended into fashion and even beauty standards in many countries, creating a huge market for Korean beauty products and fashion brands. International companies, including top luxury brands, have started pouring investments into Korean products after realizing the enormous market potential brought about by the “Hallyu” phenomenon, according to Asia One. [Source: Ryan General, Nextshark, September 4, 2016]
“TV drama celebrities and K-pop artist endorsements have played huge roles in Korean companies’ international success in the cosmetics and fashion industry. L Capital, a subsidiary investment bank of LVMH (Louis Vuitton, Fendi and other brands), for instance, invested US$50 million into Korean brand CLIO, according to Reuters. The brand, which was founded by Han Hyun-ok in 1997, had its products initially manufactured in Europe before moving its production to its own manufacturer. When Korean actress Kong Hyo-jin wore CLIO eyebrow liner in the movie “The Producers,” the company earned a record sales of 100 billion won, or about US$90,485,000, in 2015, registering more than double of what it sold from the previous year. The movie was an international success, especially in China where it was a huge hit.
“Similarly, Goldman Sachs Group and Bain Capital Private Equity have made some significant Korean investments by acquiring a stake in Carver Korea, a popular cosmetics firm in South Korea, Reuters reported. Carver Korea owns several cosmetic brands, including Vivito, Dr. MJ, Shara and A.H.C., selling over 1,000 products sold through various channels. Since 2013, company earnings have surged from 27.3 billion won (US$24 million) to 156.5 billion won (US$140 million) in 2015.
“South Korean company Have & Be Co. Ltd, the parent company of cosmetics-maker Dr. Jart which produces the hugely popular BB cream, is also set to get a huge investment, this time from renowned cosmetics brand Estee Lauder, according to The Telegraph. Founded by young entrepreneur Lee Jin-wook, the company will get international exposure through Estee Lauder’s global network. Lee currently owns 66.7 percent of the company, which is worth around 17.8 billion won (US$15.9 million).”
Product Placement on Hit Korean Drama Pays Off Big
AFP reported: The power of the most popular dramas to launch new trends and boost existing ones was displayed by the recent production My Love from the Star – an unlikely love story between a top female movie star and a 400-year-old alien disguised as a human. The SBS television show was a huge hit, especially in China, where it triggered a craze for Korean-style fried chicken – the favoured comfort food of the show’s heroine, played by Gianna Jun. The main characters talked and sent texts on Samsung’s Galaxy Note smartphones, or chatted via the Line mobile app made by Naver, Seoul’s top internet portal. Jun’s character used lotions and lipsticks made by Amorepacific, South Korea’s largest cosmetics firm. Supporting characters had an insatiable taste for mini-desserts made by CJ – the country’s top food company. [Source: AFP, June 22, 2014]
“The exposure clearly pays off. Amorepacific said sales of the skincare products and lipsticks used by Jun surged 75 per cent and 400 per cent respectively, largely thanks to booming sales in China. "In the past, PPL [product placement] on South Korean TV shows boosted domestic sales only," the company said. "But we’ve recently seen it having an immediate and widespread impact in Asia, especially in China."
“In My Love From the Star, a pair of US$625 (Dh2,300) Jimmy Choo shoes worn by Jun sold out in shoe stores across Asia within days. Even more dramatically, it only took a rumour – the brand name never appeared – that the lipstick Jun used in one episode was from Yves Saint Laurent to cause a similar run on that product. Neither Jimmy Choo nor YSL had even struck a deal to have their products placed in the show.
“Mercedes-Benz did, and the German carmaker saw sales of its models featured in the show spike. "Many companies now know if their products are featured in our shows, Asian viewers, especially women, will feel more familiar with their brands – whether on a conscious or unconscious level," said Kim Yeong-Seop, an executive producer at SBS.
Collaborations Between Korean Drama Makers and Foreign Companies
Amy Qin wrote in the New York Times: “China’s obsession with a South Korean television show about a 400-year-old Harvard-educated alien who falls in love with an arrogant actress reached such a frenzy last year that online streaming companies here began racing to snap up licensing rights for other South Korean television programs, inflating their prices almost tenfold. [Source: Amy Qin, New York Times, July 20, 2015]
Amy Qin wrote in the New York Times: “ Then China’s entertainment regulators stepped in, imposing greater limits on foreign television content as part of a broader campaign to rein in China’s fast-growing market for online video, which has become a popular alternative to Chinese broadcast television. (According to official statistics, there were 433 million viewers of online video — TV shows included — in China by the end of 2014, making it the largest streaming market in the world.) Many in the online video industry in China suspect the new guidelines were issued at least partly because of the popularity of “My Love From Another Star.” [Source: Amy Qin, New York Times, July 20, 2015]
“Faced with the limits, popular streaming websites like Sohu, iQiyi and Youku want to develop their own Korean-inspired content to sate the country’s appetite for the programming, part of a broader fascination with Korean popular culture. That has meant trying to tap into South Korea’s secret sauce — the magic formula that has turned the country into a pop-culture juggernaut that churns out viral exports like the singer and rapper Psy, the singer Rain and hits like “My Love From Another Star.” “We share the same culture and cherish similar social values,” said Sophie Yu, director of international communications for iQiyi, the online video streaming website affiliated with the search giant Baidu. “So Korean content naturally is easy to be understood and accepted by the Chinese audience.”
“For Chinese companies, part of the strategy includes making Chinese versions of popular South Korean fare, particularly variety and reality shows. Some of the hottest Chinese programs, like Zhejiang Television’s game-variety show “Running Man” and Hunan Television’s reality show “Where Are We Going, Dad?,” were based on South Korean formats. Nearly all of China’s top online video websites have signed agreements with South Korean television stations and production companies to co-produce television shows tailored for Chinese audiences. But after the success of “My Love From Another Star,” Chinese companies are setting their sights higher. Millions of viewers in China last year tuned in to watch the 21-episode mini-series, which originally aired on the Seoul Broadcasting System, a leading South Korean network. Maggie Xiong, senior director of international acquisitions at Youku, the streaming service, said the show “brought Korean content to the mainstream.” It was streamed more than 2.5 billion times in the first three months after its premiere in December 2013.”
“Descendants of the Sun” was largely shot in Greece and funded with Chinese money. John Kang wrote in Forbes: Baidu ’s video-streaming affiliate iQiyi.com bought the exclusive rights to stream the show in China for US$250,000 per episode which, in total, is equivalent to about 40 percent of the show’s production costs. The show was released simultaneously in South Korea and China, the first Korean drama to do so, and was viewed more than 1 billion times on the platform. [Source: John Kang, Forbes, April 5, 2016]
The Asahi Shimbun reported: “Notching a total of more than 4.5 billion views across the world, the South Korean internet cartoon title “Tower of God” was converted into an animated adaptation jointly by Japan, the United States and South Korea. A Japanese TV drama developer is reportedly offering to make a new version of “Itaewon Class” set in Japan’s Roppongi district.“Japan has a well-established history as a great content creator, and has exceptionally high anime and drama-making abilities,” said Hwang. “We will collaborate with each other, not competing, to spread high quality products to other parts of the world.” [Source: Asahi Shimbun, July 5, 2020]
Business and Production Side of “Descendants of the Sun”
“Descendants of the Sun” was largely shot in Greece and funded with Chinese money. John Kang wrote in Forbes: Baidu ’s video-streaming affiliate iQiyi.com bought the exclusive rights to stream the show in China for US$250,000 per episode which, in total, is equivalent to about 40 percent of the show’s production costs. The show was released simultaneously in South Korea and China, the first Korean drama to do so, and was viewed more than 1 billion times on the platform. [Source: John Kang, Forbes, April 5, 2016]
AFP reported: “Korean dramas normally begin airing before later episodes are filmed — allowing for ratings-boosting script adjustments. But “Descendants of the Sun” was pre-recorded in its entirety — a major “risk,” according to its South Korean producer Next Entertainment World (NEW). “None of the pre-recorded dramas have been successful in the past,” a spokeswoman for NEW said. “But it was necessary to pass Beijing’s censorship rules for our first simulcast in China.” [Source: AFP, April 12, 2016]
“Censors did make some changes to the Chinese-version of the drama, including deleting a fight between South and North Korean soldiers in the first episode. Pre-recording paid off by allowing a strong pre-broadcast marketing strategy that included airing movie-like teasers in South Korea and China three months in advance. The drama has now been sold to 32 countries, including Japan and non-Asian broadcasters in the United States, England, France and Russia.
“Its success is built on the same staples that have made K-dramas a lucrative cultural export: attractive lead actors, melodrama and romance. What sets it apart, experts say, is its modern-day setting of military peacekeeping, upbeat patriotism and, perhaps most crucially, the fact that it’s a K-drama that isn’t “too Korean.” “At a time when Asia has seen scores of natural disasters like tsunami and earthquakes, the series projects a sense of universal humanity,” said Yun Suk-jin, professor of Korean Literature at Chungnam National University. “And because it is set overseas rather than in Korea, it appeals more to international viewers,” Yun said. It has spawned a mini industry, with Chinese fans snapping up cosmetics, clothes and fashion accessories favoured by the show’s stars — especially the female lead Song Hye-kyo — and sold on iQiyi.com‘s online shopping site.
Marketing of Korean Dramas in China
Amy Qin wrote in the New York Times: “According to the new regulations, which were issued in September, foreign television shows cannot constitute more than 30 percent of TV content on Chinese online video-streaming sites. In addition, all foreign television shows must be reviewed by censors before they can be streamed. Korean production companies are still finding ways to take advantage of the fast-growing online market in China. [Source: Amy Qin, New York Times, July 20, 2015]
HB Entertainment is partnering with a Chinese company to produce two new dramas similar to “Star” specifically for the Chinese market, one in Chinese and one in Korean with subtitles. “China is a big part of our strategy now,” said Bomi Moon, head of the Korean company HB Entertainment, which recently opened a Beijing office. “Many Chinese companies want to work with Korean partners because we’re good at writing scripts.”
“Whether this will result in a show as popular as “Star” has prompted much debate in China. During the annual session of the National People’s Congress last year, some members spent a full morning panel discussion bemoaning that China could not have made “Star.” One high ranking Chinese politician, Wang Qishan, said he watched the show. “Actually, I have been wondering why Korean dramas have such a strong foothold in China,” he said, according to The Beijing News. “After watching I finally understood — Korean dramas are ahead of us.”
Korean Dramas Create Blockbuster Products in the Chinese Market
Koichi Kato and Ken Moriyasu wrote in Nikkei: South Korean entertainment reigns supreme in China. The figures say it all. The most popular TV Korean drama of 2014, "My Love From the Star," was watched a total of 2.8 billion times on Chinese streaming site iQIYI.com. The silver-sparkled Jimmy Choo high heels worn by lead actress Jun Ji-hyun, also known as Gianna Jun, in the second to fourth episodes disappeared from stores, not only in China and South Korea, but also in places like Dubai and London, where Chinese travelers sought them out. In April 2014, when Jimmy Choo opened its first store in Shenyang, northeast China, all 50 pairs of the US$800 pumps sold out in almost no time. [Source: Koichi Kato and Ken Moriyasu, Nikkei, January 8, 2015]
“Although just a few hundred pairs of the shoes were originally produced, Jimmy Choo executives, seeing their worldwide appeal, decided to produce several thousand more. Each handmade shoe takes four months to complete. It was a similar story for the Mondo backpack by Samsonite that lead actor Kim Soo-hyun carried over his shoulder as the show's handsome alien. Samsonite did not pay for a product placement. Kim reportedly decided to use the bag because he liked it. The backpack went on sale two days after the episode aired in January and sold out within a week.
“Because Samsonite hadn't received any notice that Kim would be using the Mondo, they didn't have enough of the backpacks to keep up with demand, resulting in missed sales opportunities. "After seeing the tremendous demand for the product, we stepped up our production to speed up restocking," said Leo Suh, Samsonite's president for Asia-Pacific and the Middle East. "By having our marketing and merchandising teams work closely with our suppliers, we managed to reduce our lead time for the product from 60 days to 45 days," he told the Nikkei Asian Review.
“When the Korea Trade-Investment Promotion Agency, or KOTRA, held a seminar for Korean restaurant chains in Dalian last fall, four of the nine companies that attended offered fried chicken. In "My Love From the Star," main character Song-yi, played by Jun, celebrated the first snowfall of the year with a meal of fried chicken and beer. In Dalian, posters of a smiling Jun can be seen promoting Kentucky Fried Chicken, Paris Baguette bakeries, bags of potato chips and a local department store. She will soon be the face of Gucci.
How Chinese Businesses and the Beijing Government Are Dealing with Popular Korean Dramas
Amy Qin wrote in the New York Times: “ Then China’s entertainment regulators stepped in, imposing greater limits on foreign television content as part of a broader campaign to rein in China’s fast-growing market for online video, which has become a popular alternative to Chinese broadcast television. (According to official statistics, there were 433 million viewers of online video — TV shows included — in China by the end of 2014, making it the largest streaming market in the world.) Many in the online video industry in China suspect the new guidelines were issued at least partly because of the popularity of “My Love From Another Star.” [Source: Amy Qin, New York Times, July 20, 2015]
“Faced with the limits, popular streaming websites like Sohu, iQiyi and Youku want to develop their own Korean-inspired content to sate the country’s appetite for the programming, part of a broader fascination with Korean popular culture. That has meant trying to tap into South Korea’s secret sauce — the magic formula that has turned the country into a pop-culture juggernaut that churns out viral exports like the singer and rapper Psy, the singer Rain and hits like “My Love From Another Star.” “We share the same culture and cherish similar social values,” said Sophie Yu, director of international communications for iQiyi, the online video streaming website affiliated with the search giant Baidu. “So Korean content naturally is easy to be understood and accepted by the Chinese audience.”
“For Chinese companies, part of the strategy includes making Chinese versions of popular South Korean fare, particularly variety and reality shows. Some of the hottest Chinese programs, like Zhejiang Television’s game-variety show “Running Man” and Hunan Television’s reality show “Where Are We Going, Dad?,” were based on South Korean formats. Nearly all of China’s top online video websites have signed agreements with South Korean television stations and production companies to co-produce television shows tailored for Chinese audiences. But after the success of “My Love From Another Star,” Chinese companies are setting their sights higher. Millions of viewers in China last year tuned in to watch the 21-episode mini-series, which originally aired on the Seoul Broadcasting System, a leading South Korean network. Maggie Xiong, senior director of international acquisitions at Youku, the streaming service, said the show “brought Korean content to the mainstream.” It was streamed more than 2.5 billion times in the first three months after its premiere in December 2013.”
K-Entertainment Success Boosts the Entire South Korean Economy
Song Jung-a, wrote in the Financial Times: “Hallyu is breathing life into South Korea’s slowing economy amid the declining competitiveness of its smokestack industries. In contrast to waning demand for steel, microchips and cargo ships — which have driven the country’s rapid industrialisation over half a century — exports of cultural products hit a record US$5.3bn in 2014, with an annual average growth rate of 13.4 per cent for five years since 2010. “I see great potential in the country’s creative industries as a new growth driver,” says Woong Park, president of Eastspring Investments, a British asset manager. “The economy can no longer succeed with its old formula, because the Chinese are now better at it, investing aggressively to build scale in traditional manufacturing industries.” [Source: Song Jung-a, Financial Times, April 12, 2016]
“Korean companies, on the back of the country’s growing soft power, are now increasingly focusing on areas that have been boosted by Hallyu. AmorePacific, the country’s biggest cosmetics company, in 2015 enjoyed a 44 per cent year-on-year jump in overseas sales as the country’s cool image gives a marketable cachet to consumer goods abroad. CJ E & M, the media unit of the family-run CJ conglomerate, is seeing its overseas sales grow more than 20 per cent a year while Netmarble Games, South Korea’s top mobile game company, is planning a Won2tn initial public offering as exports of Korean games reached nearly US$3bn in 2014, accounting for more than half of the country’s cultural exports.
“Iconix, a small animation producer, became the country’s biggest revenue generator on YouTube as its Pororo penguin and Tayo bus characters won the hearts of children worldwide. South Korean culture had long been overshadowed by its bigger neighbours, China and Japan, but has punched far above its weight in recent years, as the country, which grew from the ashes of the Korean war to become the world’s sixth-largest exporter within a generation, offers something unique but still universal for global audiences to relate to.
“The country, heavily influenced by the U.S. culture in the past, has successfully combined some magic formula from Hollywood with Asian sensibilities and tastes,” says Yoon Ho-jin, a director at Korea Creative Contents Agency. “Those who love Korean dramas and pop music have developed a liking for Korean products and come to visit Korea.” Hallyu has also boosted South Korea’s popularity as a tourist destination, with 13m foreigners visiting the country last year — up from 8.5m in 2010.
“The main beneficiaries of Hallyu such as AmorePacific and CJ E & M have become the darlings of investors. AmorePacific is now the country’s eighth-largest stock with its market cap reaching nearly US$20bn while CJ E & M was added to the MSCI Korea index last November instead of struggling industrial giants Daewoo Shipbuilding and Marine Engineering and Hyundai Merchant Marine. “We’ve learned what works in Asia and beyond by trial and error over the past two decades,” says Mike Suh, senior vice-president at CJ E & M. “I believe Hallyu will last for the next 10 years at least, which means infinite opportunities for content exports.”
“However, there are growing concerns over how long South Korea can maintain its cultural edge in the region as China tries to tap into the country’s magic touch. Its rival has made deep inroads into South Korea’s “creative economy”, investing US$2.5bn in Korean games, movies and entertainment over the past five years, according to the country’s Small and Medium Business Administration. Chinese companies have taken over some Korean producers such as Chorokbaem Media with some famous Korean TV producers moving to China while more Korean entertainment companies partner with cash-rich Chinese firms to produce content together. “Fortunately, the battle in this business is more about creativity and effective planning than lowering production costs like in manufacturing,” says Mr Suh. “But I am not sure how long we can have the upper hand here. China is catching up fast in this industry too.”
Image Sources: Wikimedia Commons.
Text Sources: South Korean government websites, Korea Tourism Organization, Cultural Heritage Administration, Republic of Korea, UNESCO, Wikipedia, Library of Congress, CIA World Factbook, World Bank, Lonely Planet guides, New York Times, Washington Post, Los Angeles Times, National Geographic, Smithsonian magazine, The New Yorker, “Culture and Customs of Korea” by Donald N. Clark, Chunghee Sarah Soh in “Countries and Their Cultures”, “Columbia Encyclopedia”, Korea Times, Korea Herald, The Hankyoreh, JoongAng Daily, Radio Free Asia, Bloomberg, Reuters, Associated Press, BBC, AFP, The Atlantic, The Guardian, Yomiuri Shimbun and various books and other publications.
Updated in July 2021