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Korean pop takes off! Social media strategy of Korean entertainment industry

Conference Paper · July 2013

DOI: 10.1109/ICSSSM.2013.6602528

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 Korean Pop Takes Off!
Social Media Strategy of Korean Entertainment Industry
JoongHo Ahn
Graduate School of Business
Seoul National University
Seoul, Korea
Abstract— The Korean Wave (K-wave), or Hallyu, referred
as “the phenomenon of Korean pop culture, such as TV dramas,
films, pop music, fashion, and online games being widely
embraced and shared among the people of Japan, China, Hong
Kong, Taiwan, and other Asian countries”. After the drama-
oriented craze of the first K-wave, Korean pop music (shortly K-
pop) took the integral part of the second K-wave. In addition,
with the rapid spread of social media like YouTube and Twitter,
K-pop has expanded its fandom outside of Asia to the West. The
world-wide success of K-pop contributes to improve the ‘Korea’
image and make a positive impact on Korean economy. It is
reported that around 1,000 entertainment agencies are active in
Korea, while there exist the “big three” record labels and
entertainment agencies: SM Entertainment, YG Entertainment
and JYP Entertainment. In this case, we address the world-wide
phenomenon of K-pop popularity and the role of social media on
recent boom of K-pop. Focusing the major agencies above, we
present lessons on how to manage social media strategically:
align strategic business model with social media; maximize
various social media channels; engage customers with on-and
offline promotions; and stimulate audience with exclusive
contents.
Keywords— K-pop; social media; entertainment agencies
I. GLOBAL RENAISSANCE OF KOREAN POP MUSIC
Originally, the Korean Wave, or Hallyu, is referred as “the
phenomenon of Korean pop culture, such as TV dramas, films,
pop music, fashion, and online games being widely embraced
and shared among the people of Japan, China, Hong Kong,
Taiwan, and other Asian countries” [3]. In the 1990s, a Chinese
journalist coined “Korean Wave” to address the sudden surge
of the popularity of Korean pop culture in China.
The first K-wave goes back to the late 1990s when Korean
dramas became popular in China and Japan and expanded to
other Asian countries. In 2003, TV series called “Jewel in the
Palace”, the first female physician for the king, became a huge
hit from Asia, Middle East to Eastern Europe. In 2004, the K-
wave gained momentum when another Korean drama, “Winter
Sonata”, aired on Japan’s NHK, becoming the top-rated TV
program with an audience rating of 20% [10]. Owing to recent
globalization and development of the Internet, K-wave has
enjoyed global attention from Asia to the West over the last
two decades.
After the drama-oriented craze of the first K-wave, Korean
This study was funded in part by the Institute of Management Research at
Seoul National University and BK21.
Sehwan Oh & Hyunjung Kim
College of Business Administration
Seoul National University
Seoul, Korea
pop music (shortly K-pop) took the integral part of the second
Korean Wave. After watching Korean dramas and listening to
the songs in the dramas, international fans purchased original
soundtracks and naturally became interested in K-pop artists.
Furthermore, with the rapid spread of social media like
YouTube and Twitter, K-pop has spread globally, expanding
its fandom outside of Asia [12, 15].
On June 10th, 2011, SM Entertainment, the largest Korean
entertainment agency, held a concert at Le Zenith de Paris with
its artists such as TVXQ!, Super Junior, Girls’ Generation,
SHINee and f(x). This event attracted a lot of excitement from
European fans. 6,000 tickets for the first concert were sold out
in fifteen minutes after they were released to the public.
Disappointed with shortage of available seats, hundreds of fans
organized a flash mob to demand more shows at Louvre
Museum, which resulted in concert producers opening a second
performance night.
In December 2011, to meet the growing demand of
worldwide consumers, YouTube added the K-pop genre in its
music page along with R&B, Rock, Pop and Rap, etc., which
was the first case where a specific country’s music was
introduced as a separate genre [9]. Also, Billboard, an
international news magazine devoted to music, inaugurated a
K-Pop Hot 100 chart in August 2011. Based on data acquired
from YouTube, JoongAng Daily reported that K-pop music
videos on YouTube attracted 2.9 billion hits from Asia as of
2012, followed by America (1.1 billion) and Europe (0.7
billion) [13].
The world-wide success of K-pop contributes by improving
the ‘Korea’ image and making a positive impact on Korean
economy. Traditionally, Korea’s exports have been driven by
semiconductors, mobile phones and automobiles. K-wave
represented by K-pop emerges as a new economic growth
engine. The popularity of K-pop idol groups and artists helps to
boost Korea’s exports and attract foreign tourists by creating
positive image on Korea.
The Korea Customs Service reported that exports of
consumer goods such as clothes, accessories and cosmetics
increased, owing to the popularity of K-pop [7]. According to
the Korea Culture and Tourism Institute, foreign tourists
visiting Korea are rapidly increasing from around 6.0 Mil. in
2005 to 11.1 Mil. in 2012 [6]. Besides exports and tourism
industry, Korean language is another beneficiary of K-wave.
According to the Ministry of Education, Science and
Technology of Korea, the applicants for the Test of Proficiency TABLE I. THE BIG THREE KOREAN RECORD LABELS AND
ENTERTAINMENT AGENCIES
in Korean (TOPIK) increased from 26,611 in 2005 to 151,166
in 2012 [2]. K-pop Entertainment Agencies
SM YG JYP
Furthermore, Korean companies benefit from K-wave. Entertainment Entertainment Entertainment
From a survey with small and medium enterprises (SMEs), the Established
1995 1996 1997
Institute for International Trade reported that K-pop contributes Year
to enhancing the value of Korea image and playing a role of Founder Lee Soo-Man Yang Hyun-suk Park Jin Young
icebreaker for business with foreign partners [1]. LG Sales
Electronics, Korea’s second largest consumer electronics firm, 143 billion won 78 billion won 10 billion won
(2011)
displays its state-of-the-art TVs featuring music videos by K- Kangta, BoA,
pop idol groups and artists such as Big Bang and 4Minute at TVXQ, TRAX,
Wonder Girls,
international conferences. For instance, the Internationale The Grace, Big Bang,
JOO, 2AM,
Current Super Junior, 2NE1, PSY,
Funkausstellung (IFA), the largest consumer electronics K-pop Zhang Liyin, Se7en, Epik
2PM, Miss A,
exhibition in Europe [8]. San E, JJ
Artists Girls' High, Lee Hi,
Project, Baek
Generation, J- Gummy.
Besides Korean companies, multinational companies utilize Min, Shinee,
Ah Yeon, 15&.
marketing potential of K-pop artists to penetrate not only f(x), EXO
Korean market but also global market. For instance, Intel www.smtown.c www.ygfamily.
Website www.jype.com
Corporation, a semiconductor chip maker, released a om com
commercial song in collaboration with a K-pop idol group,
Girls’ Generation, in 2011. As Intel’s new marketing campaign,
These three entertainment agencies are allegedly
Girls' Generation showcased Intel products in retail stores
differentiated from their philosophy and practices in recruiting
across Korea, Taiwan and other Asian countries. In the same
new talents. Yim [14] pointed out that SM Entertainment is
year, YG Entertainment collaborated with Nikon in a
likely to put more weight on its artists’ appearances, while YG
marketing campaign, “A Shot A Day”, to target the youth
Entertainment considers unique characteristics of their artists.
audience. In 2013, PSY, the South Korean artist who set
Some liken SM Entertainment to an elite school where a
historic popularity records with his “Gangnam Style” music
thorough education is provided to its artists from acting to
video on YouTube, starred in a Super Bowl commercial for
singing and dancing, whereas YG Entertainment tries to
Wonderful Pistachios.
maximize trainee’s strong points instead of complementing
weaknesses. JYP Entertainment has preference for foreign
II. K-POP ENTERTAINMENT AGENCIES AND THEIR SOCIAL language speaking abilities and puts more focus on education
MEDIA OUTLETS for its artists to communicate with international fans.
As mentioned earlier, recent K-wave is driven by K-pop. There are numerous variations in the definition of social
According to the Ministry of Culture, Sports and Tourism, it is media. Kaplan and Haenlein [4] defined social media as “a
reported that around 1,000 entertainment agencies are active in group of internet-based applications that build on the
Korea. In terms of the number of K-pop artists, total sales, and ideological and technological foundations of Web 2.0, that
global reputation, there are “big three” record labels and allow the creation and exchange of User Generated Content”,
entertainment agencies in Korea such as SM Entertainment, while Kietzmann, et al. [5] argued that “social media employ
YG Entertainment and JYP Entertainment (see Table I). mobile and web-based technologies to create highly interactive
SM Entertainment, the oldest and the largest entertainment platforms via which individuals and communities share, co-
agency, takes the lead of K-pop music industry in Korea. It was create, discuss, and modify user-generated content.”
established by Lee Soo-Man and "SM" was the initials of the Representative social media can be exampled such as social
agency founder's name. It boasts of a wide range of K-pop networking sites (MySpace, Facebook), Video sharing sites
artists such as Kangta, BoA, TVXQ, TRAX, The Grace, Super (YouTube), business networking sites (LinkedIn), collaborative
Junior, Zhang Liyin, Girls' Generation, J-Min, Shinee, f(x), and websites (Wikipedia), virtual worlds (Second Life), social
EXO. YG Entertainment, the nation’s second-largest agency, bookmarking sites (Reddit, Digg), microblogging service
specializes in producing R&B and hip hop music. YG stands (Twitter), etc.
for “Yang Goon” and are also the abbreviation of the CEO, From a marketing perspective, researchers and business
Yang Hyun-suk. Including PSY who made global sensation managers focused on the potential of social media. Social
with “Gangnam Style”, YG’s current roster consists of Big media enables companies to communicate with customers. At
Bang, 2NE1, Se7en, Epik High, Lee Hi and Gummy. JYP the same time, it enables customers to talk to one another
Entertainment is another major record label, founded in 1997 through a wide range of channels. Customers perceive social
by Park Jin Young. Wonder Girls, JOO, 2AM, 2PM, Miss A, media as a more credible information source than corporate-
San E, JJ Project, Baek Ah Yeon, and 15& are under the managed communication. Therefore, it became important for
management of JYP Entertainment. managers to influence and shape consumers’ discussion and
activities on social media.
Focusing on the business potential of social media, K-pop
entertainment industry utilizes various channels to promote
music videos and to communicate with global audience. Along
with releasing new music videos and related teasers on
YouTube, entertainment agencies open and manage Facebook
and Twitter accounts to meet their overall social media strategy.
Though each social media (YouTube, Facebook, and Twitter)
serves a specific purpose, agencies try to integrate the channels
under their business strategy and maximize the potential.
Social media strategy of Korean entertainment agencies can be
summarized as follows.
• Align strategic business model with social media
• Maximize various social media channels
• Engage customers with on-and offline promotions
• Stimulate audience with exclusive contents
III. SOCIAL MEDIA STRATEGY BY KOREAN ENTERTAINMENT
INDUSTRY
A. Align strategic business model with social media
The fear of illegal downloading and digital piracy made
most Korean entertainment agencies reluctant to use online
music distribution channels. Also, due to the subscription-
based services of music industry in Korea, which allows the
listener to rent music with relatively low price, agencies
complained their profitability was sinking. Though the existing
practice in music industry contributed to making the market
much bigger, they came to realize that they could not only
resort to direct music sales for consumers.
With the rapid growth of social media like YouTube,
agencies turned their eyes to the new business model with
social media. Overcoming the conventional business model of
music sales to consumers, they made use of social media like
YouTube to promote artists and their music for free and sought
revenues in the field of licensing, royalty, and advertisement.
Oh and Park [11] surveyed that the total B2B revenue of SM
Entertainment contributed 80% of total sales in 2010 and YG
Entertainment’s B2B revenue also increased from 12% in 2006
to 40% in 2010.
In June 2009, SM Entertainment opened its official
YouTube channel, the first move among Korean entertainment
agencies to upload music contents. Regarding SM
Entertainment’s challenge, Oh and Park [11] interviewed SM
Entertainment’s CEO, Kim Young-min, quoting the following
testimony.
“… unlike TV and radio, YouTube is the first global
mechanism that allows producers like us to advertise our music
while instantly selling it by charging fees either to downloaders
or to advertisers.”
B. Maximize various social media channels
Considering their business models and current Internet
environment, K-pop entertainment agencies focused on a few
social media channels such as YouTube, Facebook, and
Twitter. As for its main promotion channel, they opened
official YouTube channels to promote new music videos and
leveraged other social media such as Facebook and Twitter to
communicate with their youth audience. At the same time, to
facilitate communication with audience, major K-pop labels
manage individual dedicated YouTube channel for their artists.
In some cases, specific YouTube channel of individual K-pop
artist is more popular and vitalized than its entertainment
agencies. For example, as of February, 2013, PSY’s official
channel recorded over 1.9 billion number of video views which
is greater than that of YG Entertainment YouTube channel, 451
million, though they are connected with site links (see Table
II).
C. Engage customers with on-and offline promotions
As one of major marketing activities, contests have been
used to engage customers and recruit potential talents in
entertainment business. Every year SM Entertainment hosts its
“Global Audition” program to look for talented singers,
actors/actresses, and dancers. Regardless of age, gender or
nationality, any applicants can participate in the audition and
finalists will have an opportunity to sign a contract with SM
Entertainment.

TABLE II. SOCIAL MEDIA OF BIG THREE K-POP ENTERTAINMENT AGENCIES (AS OF JAN. 2013)
K-pop Entertainment Agencies
Social Media
SM Entertainment YG Entertainment JYP Entertainment
Joined March 2006 January 2008 January 2008
http://www.youtube.com/YGEntertain http://www.youtube.com/jypentertai
Site www.youtube.com/SMTOWN
ment nment
No. of subscribers
YouTube 1.9 0.8 0.2
(mil.)
No. of video views
843.3 451.1 49.4
(mil.)
No. of videos 731 156 91
Joined March 2011 August 2010 January 2011
Facebook Site www.facebook.com/smtown www.facebook.com/ygfamily www.facebook.com/jypnation
Likes (mil.) 2.0 0.6 0.4
Joined October 2012 October 2010 November 2010
Twitter Site www.twitter.com/smtownglobal www.twitter.com/ygent_official www.twitter.com/jypnation
Followers
515.6 478.9 266.4
(thousand)
 Through the Global Auditions, SM recruited few K-pop and manage Facebook and Twitter accounts to communicate
stars, such as Super Junior-M’s Henry (a finalist of the 2006 with audience more closely. Though each social media
Global Auditions) and f(x)’s Amber ( a participant of the 2007 (YouTube, Facebook, and Twitter) serves a specific purpose,
U.S. auditions). For “2013 Global Audition” event, which is to agencies try to integrate the channels under their business
take place from January to April 2013 in 5 countries and 14 strategy and maximize the potential.
cities, SM released an official promotion video through
SMTOWN YouTube channel (www.youtube.com/smtown) In summary, social media strategy of Korean entertainment
and opened a dedicated page at Facebook agencies can be presented as follows: align strategic business
(www.facebook.com/smaudition). model with social media; maximize various social media
channels; engage customers with on-and offline promotions;
Other entertainment agencies also use various social media and stimulate audience with exclusive contents. This case
to engage customers with global audition program. YG could be a benchmark for any entertainment agencies who
Entertainment manages the related pages at Facebook hope to maximize business potential with social media.
(www.facebook.com/ygaudition) and Twitter
(www.twitter.com/yg_audition), while JYP Entertainment
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