The Hallyu Effect

When I spoke to a Korean audience last week, the subject of "Hallyu", or the "Korean Wave," came up.  "Hallyu" is a buzzword that describes the spread of Korean media and culture worldwide, primarily through Korean films and television shows (especially dramas).  The person who introduced me noted that I had done a study on the economic impact of the Korean Wave and mentioned that audience members who had questions about it could ask me questions on the subject.  The irony in that offer is that he was inviting Koreans to ask me, a foreigner, about a Korean phenomenon that most Koreans already know well.  What they don’t know is just how significant an economic impact Hallyu has had on the Korean economy.
I did my study on the effects of Hallyu in 2004.  My study is a bit dated but still relevant.  In 2004, "Winter Sonata," a 20-episode drama series by Korean broadcasting company KBS, rocked the Asian world.  The drama made Korean stars Bae Yong Jun and Choi Ji Woo household names in Asia.  The euphoria over "Winter Sonata" has since subsided, but Korean Wave is still rolling.  Korean films and dramas tend to become popular overseas about a year after they are initially released in Korea.  During the past two years, three notable Korean dramas have been extremely popular here and have the potential to become Korea’s next runaway global hit–"Lovers in Paris," "Lovers in Prague," and "My Lovely Samsoon."  Like their American counterparts, Korean producers and directors are  keen to build lucrative franchises ala James Bond and the "Lord of the Rings."  For example, "Winter Sonata" is one of four dramas in the "Seasons" series.  The other three lesser-known dramas in the series are "Summer Scent," "Autumn Tales," and the upcoming "Spring Waltz."  Dramas with variations of the "Lovers" theme also form a quasi-franchise.  I sometimes remark that "Lovers" dramas, which are set in various amorous locations ranging from Harvard to Prague, is a bit like the U.S. show "Survivor," which moves around from destination to destination.  I’m still waiting for "Lovers in Guatamala."  Probably won’t happen.
Here is a summary of my 2004 report on the effects of "Hallyu" on the Korean economy.
What is "Hallyu," or the "Korean Wave"?
The term Hallyu, or "Korean Wave," was created by the Chinese media to describe a “new” Korean media phenomenon.   "Hallyu" is especially popular in East and Southeast Asia and in overseas Asian communities.  Countries that have embraced "Hallyu" include Japan, Taiwan, Hong Kong, China, Malaysia, Indonesia, and Singapore.  "Hallyu" is a buzzword for the rising worldwide interest in Korean culture, including:

  • Dramas (soap operas)
  • Movies

  • Popular music

  • Food and drink

  • Traditional culture

  • Tourism

  • Cosmetic surgery

"Hallyu" is not just a teen phenomenon.  In fact, in many places such as Japan, older women are its biggest fans.  It has been actively promoted by the Korean Government through organizations such as the Korean National Tourism Organization.  Korean actors such as Bae Yong Jun, Choi Ji Woo, and Won Bin, singers such as BoA and Bi, and artists and designers such as Andre Kim have helped promote "Hallyu" worldwide.


Hallyu Timeline
Worldwide interest in Korean media and culture grew after the Korean War (1950-53):

  • 1955:  Modern tae kwondo is born

  • 1980s:  Discourses on Korean culture by Yi Gyu-tae and others
  • 1988:  Korea showcased during Summer Olympics
  • 1997:  Hong Kong’s STAR-TV broadcasts Korean drama "Star in My Heart"
  • 2002:  World Cup promotes Korean culture globally
  • 2004:  KNTO launches “Korean Wave 2004” campaign and interest in the Korean Wave skyrockets after "Winter Sonata" is broadcast in Japan

Benefits of "Hallyu"


"Hallyu" significantly benefits Korea and its economy, including:

  • Increasing awareness of Korean culture worldwide
  • Promoting a positive image of Korean culture

  • Providing a new Japanese mania with a Korean (foreign) flavor

  • Depicting Korea as a post-modern center of Confucianism

  • Improving relations between Koreans and other nations, particularly between Korea and Japan

  • Promoting Korean tourism (2004 tourism increased by 47% over 2003)
  • Earning more currency from tourists who spend boatloads of money to relive their favorite "Hallyu" money 

  • Generating increased revenue and exports for Korean companies

The Economic Effect of "Hallyu"


In addition to the benefits listed above, "Hallyu" contributed nearly .35% to 2004 Korean gross domestic product (GDP).  "Winter Sonata" was by far the largest contributor.  Revenues from "Winter Sonata" were more than $2.25 billion in 2004, representing one-quarter of one percent (.25%) of Korea’s 2004 GDP.  In addition, the domestic Korean impact of the "Hallyu" was $866 million in 2004, or .10% of Korean GDP.  Contrast the success of "Winter Sonata" to that of the "Lord of the Rings" trilogy, which brought in $2.91 billion at the box office.  "Winter Sonata" grossed more than the #1 movie of all time, "Titanic," which brought in $1.84 billion.  The single biggest film of all time when measured as dollar purchasing parity, "Gone With the Wind," grossed nearly $200 million in 1939.  It signifcantly impacted the U.S. economy at a time when the country was emerging from the Great Depression and was not yet gearing up for World War II.  "Gone With the Wind" contributed .02% to U.S. GDP in 1939, much less than the .25% contributed by "Winter Sonata."  While .35% of GDP may not sound like much, it is amazing to think that a phenomenon that did not even have a name in 2003 contributed so much to Korea’s bottom line in 2004.