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If traditional Korean music finds its roots in a mixture of Chinese and Japanese influences, having led for
example to Pansori (traditional art of sung storytelling), South Korean music has quickly become
westernized (notably with Trot , a musical genre of the 1950s inherited from jazz and rock). Korean Pop (K-Pop)

developed in the 1960s. Its real growth nevertheless survived in the 1990s with in particular the boy band
Seo Taiji & Boys. The phenomenon

became global when PSY was exposed globally with Gangnam Style in 2012. His music video was the first
to exceed one billion views on YouTube. Beyond the very popular musical genre in South Korea, K-Pop is also a
Seo Taiji and the boys
cultural movement that is exported throughout the world and which is characterized by specific dress codes
and aesthetics. Alongside its emergence, South Korea has developed by encouraging the hyper-connectivity
of its population. The music industry adopted this strategy and very quickly became digital, notably with the
development of numerous streaming platforms. Today, the Korean music sector continues its rise, adopting
the latest innovations (livestream concerts and immersive technologies in particular) and producing
artists exported throughout the world.

PSY in “Gangnam Style”

Population Physical product turnover

51.8 million inhabitants or 19.3 €409.4 million in 2020, i.e. 46.4% of

million households overall turnover

Digital
Salaries in the music sector 77,150 in 2019
turnover €452.8 million in 2020, i.e.
(+0.25% vs. 2018) 51.3% of overall turnover

CA live
Number of companies in the music sector 34,150 in 2019 (-4%
€17.2 million in 2020, i.e. 1.9%
vs. 2018) of overall turnover

Synchronization CA
music industry turnover
€2.8 million in 2020 or 0.3%
€882.1 million in 2020 (+44.8% vs. 2019) of global CA

Music industry import turnover €13.77 Music industry export turnover €752.6

million in 2019 (-1% vs. 2018) million in 2019 (+34.02% vs. 2018)

With an internet penetration rate of 96% among its adult population, and high levels of wages (€2,816 average monthly salary in 2019) and education (99%
literacy rate), South Korea is an ultra-connected country. Consequently, its music industry has very quickly become digital (first country to have exceeded +50%
digital in its market).
Paradoxically, the physical product survives more than in other countries where it has almost been swept away by streaming (46% of global turnover in South Korea
vs. 19.2% worldwide).
This upward trend in the physical product is explained in particular by the craze for K-Pop where the record is a
highly crafted merchandising product.

Sources:
•
IFPI, Global Music Report 2022
•
Statista, South Korean music industry

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K-Pop, a global phenomenon

The development of social networks in the 2000s was a turning point

for K-Pop and boosted Hallyu (a neologism born in the 1990s to describe
the growing importance of South Korean culture around the world).
After PSY's success with Gangnam Style, K-Pop gained influence with
groups like Blackpink, Twice, Stray Kids, ITZY and of course BTS.
Today, it is exported massively and appears in 2021 in the top 10 digital
sales in the United States. The BTS group, for example, places 4 of
its titles in this ranking, including number 1 Butter with 1.9M sales.
Between 2005 and 2019, Korean music exports increased from €22.3
million to €756.2 million, with an exponential increase since 2010. Today,
the group BTS alone represents 2% of Korean music exports, Album “Map of the Soul” by BTS and
a colossal figure. merchandising associate

More generally, in 2019, the economic effect of BTS on South Korea was
estimated at more than 4.6 billion euros per year, or around 0.3% of
South Korea's GDP. This contribution can be explained in particular by the
strength of the merchandising deployed by the groups, whether it be very
elaborate covers, collector's editions, clothing, everyday objects or
even soft toys bearing their image. Likewise, K-Pop leads a community
of fans to attend karaoke.
The latter therefore represent a large part of the music industry. In
2018, there were more than 33,000 karaoke companies with a
turnover of $1.2 billion, making it the leading sector in the industry.
Covers of the latest albums of Stray groups
Kids, Twice and NCT Dream

A live sector still too weak

The Korean live industry has evolved significantly over the past 10 years.
Between 2011 and 2016, the number of live performances in the country
increased more than 15-fold, from 750 to 11,755 concerts (a total of
tickets sold equivalent to €350 million). Seoul is thus beginning to
become a frequent stop for tours of international artists (Paul
McCartney, Coldplay, Kendrick Lamar and more recently Dua Lipa
or Billie Eillish). However, the live sector still remains too underdeveloped
compared to other powers in the music market (1.9% of global turnover
vs. 47.4% in the United States).
With such figures, Korea ranks 23rd in the global live performance market
rankings. The concerts are very heavily concentrated in Seoul with
a predominantly female audience (71%). Independent structures that
are still too fragile, a low number of international festivals and a lack
of public support are the main factors explaining the relative weakness of
Korean live music in the face of global competition. The construction of
the K-Pop Arena, a huge concert hall (with a capacity of 18,400 seats
and scheduled to open in 2024), aimed at attracting K-Pop fans from around
the world, surely marks a turning point in the development of live in South
The K-Pop Arena project in Seoul Korea.

Sources:
• Statista and the music industry in the United States
•
BTS Make History at 'PERMISSION TO DANCE ON STAGE' Reunion Concert, Earnings Report
•
2021 Year-End Music Industry Award from Bandwagon Asia, RIAA

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New technologies at the service of Korean live

South Korea was the first to innovate by offering fans online

concerts during the 2019 health crisis.
She successfully monetized these events. Beyond Live (a
subsidiary of SM Entertainment, JYP Entertainment and
Naver) brought together more than 75,000 spectators from 109
countries in April 2020 for the concert of K-Pop group SuperM. In
2022, BTS is adopting this practice by offering a
livestream in addition to their three dates in Seoul. It was
a success since the boyband managed to attract 2.46
Application of mixed reality to the concert
million viewers on VenewLive in addition to the 45,000 present Super Junior (SM Entertainment)
on site.

Beyond a simple broadcast of the concert online, Beyond Live

also offers an enriched visual and physical experience thanks
to the application of augmented reality techniques. The public
therefore benefits from a realistic immersion and additional
elements displayed superimposed. Live audience reactions can
also be transcribed. This technology is already very advanced and
can breathe new life and great opportunities into a Korean
live sector that is below the average global performance. Immersion for a reproduction of the BTS concert in virtual
reality

Synchronization, an emerging trend source of opportunities for France

Synchronization is a growing market today in South Korea and it can
constitute an important source of growth and influence for French music, as
evidenced by the success of Carla Bruni thanks to her version of “Stand
By Your Man” for the television series “Something In The Rain”. It was placed
29th in the ranking of the most listened to non-Korean songs thanks to its 146
million plays.

Korean content is also exported all over the world, the synchronization
of these could allow a multiplier effect for the notoriety of the titles highlighted.
For example, “Squid Game” is a global success, with a sophisticated
soundtrack that fans were eager to listen to. We therefore understand
the importance for French music to understand the issue of
synchronization in South Korea in order to best export and thus conquer
new audiences. The dynamics in the music industry are real: synchronization
currently represents only 0.3% of global turnover but is growing by
160.8% compared to 2020). Poster of the series
Something in the rain

Sources:
• Statista and the music industry in the United States
•
BTS Make History at 'PERMISSION TO DANCE ON STAGE' Reunion Concert, Bandwagon Asia 2021 Year-End Music Industry Revenue
•
Report, RIAA

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South Korea has freed itself from the traditional British and American majors (Sony, Universal and Warner),
88% of Korean musical production is in fact independent of these companies. The development model
is, however, similar with megastructures covering almost the entire value chain.

Public actors
Name
Description

Government agency overseeing and coordinating the promotion of the Korean content industry.
Korean creative content agency KOCCA's Korean goal is to spread content across the world (dramas, K-Pop,
(KOCCA) fashion, video games, animation, etc.). Recently, KOCCA has integrated new technologies and
start-ups in its field of action and is also present internationally, particularly in Paris.

A non-profit copyright management company for musical works, administering

public performance and broadcasting rights, as well as recording and
Korea Music Copyright Association mechanical reproduction. Founded in 1964, it is the 2nd collective rights management organization
(KOMCA) for musical works in Asia, after JASRAC in Japan. She is also one of the most
major companies in Asia, with more than 20,000 members. In 2015, it collected €123 million in royalties.
license and distributed €118 million in royalties to its members.

Main private players in Korean recorded music

Name Activities
Group turnover 2019 Description

Founded in 1995, SM Entertainment is one of the largest record

Music production, talent agency, video labels in Korea.
SM ENTERTAINMENT €555 million
production, concert production Working 360°, she is known for launching pioneering K-Pop
artists such as HOT and TVS.

Founded in 1996, YG Entertainment is one of the three largest

Music production, talent agency, concert
record labels in South Korea. She notably produced the artist PSY and
YM ENTERTAINMENT production, publishing, luxury brands €224 million
her video Gangnam Style. Its activity extends to fashion, cinema
(YG
and cosmetics.
More)

Founded in 1997, JYP Entertainment is one of Korea's

Music production, talent agency, concert entertainment conglomerates.

JYP ENTERTAINMENT €131 million
production, distribution, publishing This company has produced a large number of K-Pop, R&B or
electronic music artists (PM, Twice, Stray Kid, etc.).

Founded in 2005, Hybe Corporation

(formerly Big Hit Entertainment) is an entertainment company
Music production, talent agency,
HYBE CORPORATION €495 million
managing several labels such as Big Hit Music producing BTS and
publishing
Lee Hyun.

Stone Music Entertainment is a major player in the South

Korean music landscape founded in 2010.
Music production, agency
She has produced renowned K-Pop artists like SeeYa, Lee Hyori, IOI,
STONE MUSIC ENTERTAINMENT talent, concert production, publishing,
€282 million
Park Bo-ram,
music channel (Mnet)
Wanna One or Iz*One until 2021 and continues to operate as a
distributor.

SM Entertainment, YG Entertainment and JYP Entertainment are considered the "Big 3" of the entertainment industry.
Korean music. Sprawling groups, controlling almost the entire industry value chain, they have been
joined by Hybe, producer of BTS in particular.

Sources:
•
The music industry of Japan, Korea and Taiwan

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Main music festivals

Name Place
Type Examples of headliners Accommodation capacity

Maceo Parker, Allan Holdsworth,

JARASUM JAZZ FESTIVAL Festival Jarasum 100,000+
Pianoforte (French group)

INCHEON PENTAPORT ROCK FESTIVAL Festival Incheon 78,000+

Fall Out Boy, Nine Inch Nails, simple shot

ULTRA KOREA Festival Seoul

Skrillex, David Guetta, Snoop Dogg
70,000+

DREAM CONCERT Concerts/Festivals Seoul Red Velvet, NCT Dream, seventeen 40,000+

DMZ PEACE TRAIN MUSIC FESTIVAL Festival Seoul John Cale, Kid Francescoli, Last Train 12,000

SEOUL JAZZ FESTIVAL Festival Seoul Jamiroquai, Avishai Cohen, Tower of Power 10,000

ZANDARI PARTY Festival Seoul

Dead Buttons, DTSQ, Flèche Love, Holy Two 8,000 in 2019

BUSAN ROCK FESTIVAL Festival Busan N/A

Cigarettes after sex, James Walsh, Pia

HOLIDAY GROUND Festival Incheon N/A

Cigarettes after sex, The XX, James Blake

SEOUL MUSIC WEEK Festival Seoul N/A

Lee Joo Young, goldfish, SokSokGot

Focus on streaming platforms

Platform Parent company Users Description

MelOn (for Melody On) was developed in 2004 by the giant SK Telecom before Kakao
5.3 million
Entertainment took control of it again in 2009.

A subsidiary of Google, YouTube Music entered the streaming platform market in 2015. Available in more than 100 countries, it
3.0 million
enjoys strong popularity in Korea.

A subsidiary of KT Corporation (another conglomerate in the telecommunications sector in South Korea), Genie Music is the 2nd South
2.9 million
Korean streaming platform.

Launched in 2018, the FLO streaming platform was created by SK Telecom in partnership with players such
1.7 million such as Hybe, JYP or even SM Entertainment. Since November 2019, it has been the 3rd largest South Korean platform.

VIBE is the streaming platform launched by the giant Naver Corporation in June 2018. It uses intelligence
artificial to make the recommendation algorithms work and attempts to install a remuneration model based on real user listening, unlike the
N/A
streaming giants.

Launched in February 2021 in Korea, Spotify offers access to 60 million tracks to Korean users. The application offers two paid
subscriptions starting at around €10 per month but does not offer a freemium version (financed by advertising), unlike certain
N/A
other countries in which it is available.

While the global market trend places the Swedish giant Spotify in the lead with 31% market share, the dynamics
of streaming in South Korea are rather unique. We see a great preference for Korean streaming platforms and an
almost negligible importance of traditional global platforms (Apple Music, Amazon Music, etc.). Note, however, that
the launch of Spotify in South Korea at the beginning of 2021 could ultimately change these trends.

Sources:
•
Statista, South Korean music industry

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A music-consuming country with tastes compatible with France

Strongly connected and eager for new things, Korea is also a great country of music. The public is curious and has different tastes
varied and compatible with the French scene (electro, song, classical music, jazz).

Possibilities for the emergence of French artists France benefits from a very
good brand image in Korea, particularly in artistic and particularly musical matters. The development of online concerts could help increase the visibility
of French artists in South Korea. They can also rely on collaboration with local artists to increase their popularity.

Opportunities in synchronization to use Korean soft power as leverage

The development of synchronization makes it possible to display French titles on Korean series or films and thus make them known in
Korea but also around the world, due to the increased popularity of Korean series and cinema.

A trade surplus and imports mainly focused on the United States. The global power of K-Pop allows it to be exported in large quantities and the consumption
of domestic cultural goods remains very anchored in South Korea. In terms of imports, there is a preference for imports from other Asian or English-speaking
countries, particularly emissions from the United States.

Entry barriers limiting access to the Korean market for Western artists
We first note a weak presence of leading streaming platforms in the West, limiting the impact of works, particularly French works,
distributed via the latter on Korean territory. In addition, the weakness of the live sector makes it difficult for artists to make themselves
known on stage.

A subsidiary or local partners necessary to build a network and develop opportunities Despite a very strong business dimension, the Korean
economy favors relationships over transactions. Presence in the territory is an essential asset for developing your network and building
relationships of trust in the targeted sector before being able to develop economically there.

A good understanding of Korean culture highly recommended

A good understanding of Korean codes and culture is essential to streamline the partnership relationship. Although growing, the
use of English is still moderate in South Korea. Learning a few words of Korean is a plus.

A highly financialized territory and sectors

The cultural and creative industries sectors are highly financialized and the players involved have the means to unlock large investment
plans and strong financing for long-term development, sometimes several decades.

A vertical hierarchical system subject to numerous validation strategies

The organization of work in South Korea is still largely vertical (an observation that needs to be qualified, however, among new
digital players, for example). The culture of Pali Pali (quickly in French) and its very rapid and vertical arbitrations also exist, however,
and can lead to sudden accelerations in decision-making.

A real strength of European soft power despite cultural adjustments to be made

Sensitive to Western history and culture, Korea is able to massively adhere to creations and content inspired by European heritage. The
latter must nevertheless be adapted to Korean codes and aesthetics.

Mapping of Korean ICCs by the French Embassy in South Korea

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About BearingPoint
BearingPoint is an independent management and technology consultancy with European
roots and global coverage.

The firm is structured around three entities. The first covers consulting activities with a clear
emphasis on the firm's key areas of expertise to be developed throughout the world. The
second provides advanced technological solutions combining consulting and
software, and offers high value-added managed services to clients.
The third focuses on innovative investments; for example in very specific software
solutions to meet regulatory requirements or support digital transformation. It also aims to
explore innovative business models with clients and partners, by promoting the creation of
ecosystems, financing and development of start-ups.

BearingPoint's clients include the world's largest public and private organizations; With an
international network of more than 10,000 employees, BearingPoint supports its customers
in more than 75 countries and helps them achieve measurable and sustainable results.

For more information :

Website: www.bearingpoint.com/fr-fr
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Contacts

Olivier Lenne Adele Nuvolone Antoine Lajante

Associate Director Director Consultant
olivier.lenne@bearingpoint.com adele.nuvolone@bearingpoint.com antoine.lajante@bearingpoint.com

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