Alex Jensen and Choi Kyungmi KBLA’s special issue reporter discuss the recent #bts successes in the United States and the potential importance of BTS, Kpop Bands and other cultural products in spurring Korea’s economic recovery.
Not only was BTS stunningly successful in their recent Las Vegas concerts selling out over 200,000 tickets over four nights, the entire city was transformed into a mecca for their loyal fans.
Coming back home, the impact of the BTS and other cultural content exports is hard to overestimate. It has been estimated that its estimated that each BTS concert generates between KRW 620B and KRW1.2T worth of economic activity. But perhaps more significantly, The Korea ExIm Bank reports that a rise in music exports correlates to an amazing 17X rise in other Korean consumer goods.
This economic discussion happens as the issue of the BTS members’ national service reemerges. The economic benefit and the super-group is seen as being more than enough by many to have them excluded in the same way as Korean champion athletes are. Others argue that it is a better policy that the members complete their national duty in some way.
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Alex Jenson 0:08
You’re listening to koreabizcast with the KBLA. It is Monday, April 25. And I’m your host Alex Jensen. It’s a pleasure to have your company at the start of a new week. Now, a lot of interviews have made cultural references during the course of our podcast experience over the last few months. Little references here and there to Hallyu or to BTS. And a report recently has shed some serious light on exactly the financial impact that BTS has been having for Korea as a whole. And, you know, this manifests itself in so many different ways. Perhaps a business meeting that just offers the person that you’re meeting with is from another country and perhaps never been to Korea. A little bit of insight, a little bit of a window into the experience here in Korea. If they’re familiar with some of those cultural products. or special issues. Reporter Kyungmi Choi is on the line to take us through that report. And also just to set the scene with some of BTS’ movements recently. Thank you Kyungmi.
Kyungmi Choi 1:09
Well, thank you, Alex, for having me.
Alex Jenson 1:10
Honestly, I think in the area of Korea related content creation BTS, might be seen as the low hanging fruit and it is very easy to draw a lot of attention online simply by talking about BTS, but that doesn’t mean we shouldn’t talk about BTS, of course, it just means that we have to have a good reason, which I think we do have today. But first, they successfully concluded concerts in Las Vegas this month, the US city itself filled with the group’s signature color purple. That in itself is kind of an indication that they’re made it right as if that wasn’t already obvious.
Kyungmi Choi 1:45
Right? So definitely so Las Vegas actually even changed its name to Borahegas, which is a combination of of course, BTS’ fanclub army’s catchphrase which is Borahe, or I purple you and then Las Vegas. And not surprisingly, all four concerts were sold out. And apparently BTS was the first musician to hold all four rounds of concerts at this particular venue called Allegiant stadium. And then to fill all 200,000 seats there are since its opening, and its agency Big Hit Music said that the offline and online concerts attracted 620,000 attendees both are and the agency released the online version of the latest live concert series as well. On some 424,000 people are known to have watched them, and this included above 402,000 people from 182 countries and regions, as well as some 22,000 people who gathered at the MGM Grand Garden Arena in Las Vegas to watch the concerts being broadcast in real time to a big screen.
Alex Jenson 2:47
Also draw attention apart from the big number of concerts but spectators the various programs related to BTS held in the vicinity fans getting the opportunity to try different activities and experiences or just random people who might have been visiting Las Vegas drawn into that. So it wasn’t just the concert.
Kyungmi Choi 3:07
Right so the entertainment company behind BTS which is Hybe. It announced that before the concerts were held, I was preparing the program so that fans can feel the presence of BTS throughout Las Vegas. They were all during the concert period, and it was held under the name The City Las Vegas, and the programs included shopping entertainment, food, beverage and accommodations. And they were offered on a five kilometer section of the road linking to Allegiant stadium to around the strip, which of course is known for its concentration of resort hotels and casinos. And at the famous found of Fountains of Bellagio, there was a water show that would dance to BTS songs. And a photo exhibition of the band practicing for the live concert series was also held, as well as a club party where fans were able to enjoy the band’s music and hotels in the area offered BTS themed rooms. And these rooms also had cards carrying head and written messages from our members of BTS. And a restaurant offered a special course menu including favorite dishes of all the members as well. And have also said that the goal of this project was aimed at providing fans who came to view the concert with opportunities to enjoy Las Vegas and filling the city with all different festivities.
Alex Jenson 4:20
Let’s get into the numbers. There’s an estimate that the profits were well in the 10s of billions of one generated from these concerts and programs combined with that under the city project. Tell us more about those numbers.
Kyungmi Choi 4:35
Right. So the industry estimates that 40 billion won the worth of profits were created through the concerts themselves, and the amount goes up to 200 billion won when taking into consideration that fans who stayed at hotels near the concert venue. We’re generating profit as well as all they were spending on various entertainment and leisure activities during their time in Las Vegas. And the actual profits could be even bigger as well. ever say that this amount doesn’t reflect the sales of concert related merchandise as well as the online concert.
Alex Jenson 5:06
And before the performances in Vegas, the group held its first in person concert in two years in Korea last month. We sometimes spend so much time looking at the BTS effect abroad that we forget they’ve got quite a big following here at home.
Kyungmi Choi 5:21
Right but this was before the government here decided to lift most of the social distancing measures. And so due to the pandemic situation here or to guarantee social distancing among spectators, each concert limited the capacity to 15,000 people, even though the venue could take up to 70,000 people and all spectators of course had to keep their masks on the entire time, and over 700 staff were dispatched at the site to ensure that everyone was following quarantine rules. And now experts say that BTS could play a significant role in attracting foreign visitors and contributing to Korea’s economic growth. Although tourism in the post COVID era when all with all these restrictions now being lifted,
Alex Jenson 6:02
and the Korea Culture and Tourism Institute’s released a new report on the economic effects of BTS holding a concert under normal circumstances. This is where we come around to the report that I mentioned earlier.
Kyungmi Choi 6:14
Right so the institute forecasted that 619 point 7,000,000,001 to one point 2,000,000,000,001 worth of economic effects will be generated per each concert BTS holds in the post pandemic era, and one assuming that a concert venue could hold up to 65,000 people and 20% of the concert goers were formed fans, it would generate 619 point 7,000,000,001 And then the amount would go up to 920 billion won if 35% of the spectators were international fans. And then over half of the spectators are all from abroad, one concert will generate one point 2 trillion won. And it will lead to consumption of some 742 billion won and also result in value added inducement worth 570 billion won as well as lead to the creation of 10,800 jobs. So this means that if BTS holds 10 rounds of concerts in a year, we could see up to 12 point or 2 trillion worth of economic effects.
Alex Jenson 7:14
Let’s talk a little bit about how they came up with these figures.
Kyungmi Choi 7:17
So the figures were calculated based on the profit made from the sales of tickets and goods from BTS’ LA and Seoul concerts. And it also takes into account a foreign tourists who will be entering Korea to watch these concerts. Or there will be economic effects coming from these international fans spending in various areas such as transportation, accommodation, shopping, food and travel as we have seen from the case in Las Vegas. When BTS held its last concert before the pandemic in Korea in 2019, hotels near the concert venue in Jamsil were also reportedly fully booked with customers and there are mostly in their 20s and 30s for probably all BTS fans. And in the case of the concerts in LA that were all held last November and December 70% of the spectators were known to be from other states or from overseas. So the Institute also took into consideration the level of consumption and the tourism industry and the so called Revenge consumption or people are more willing to spend money as they’ve been unable to enjoy social activities or travel during the pandemic. And the institute concluded that BTS concerts could kick off Korea’s recovery in the post Coronavirus era, and that the government should provide measures to promote the culture and tourism sectors headed by the Kpop performance industry. And with the group having an enormous amount of impact on the country’s economic interest. There is currently controversy surrounding whether its members should be exempt from the country’s mandatory military service. And the National Assembly is reportedly reviewing this matter.
Alex Jenson 8:46
Not just BTS but the Korean music industry as a whole is continuing to see growth. In fact, the Korea Foundation says the number of fans of the so called Korean Wave or Hallyu, who actively take part in activities of fan clubs or groups related to Korean culture. As reached 156.6 million as of last year. This is 17 times bigger than a decade ago. But even a few years ago, it was found that the exports of Korean music had led to a significant amount of economic effects.
Kyungmi Choi 9:16
Right so the Export Import Bank of Korea announced the results of its analysis on the economic impact of Korea’s cultural content exports a few years ago in 2019, and music had the greatest effect among different cultural contents. When the exports of music rose by $100. Exports of other consumer goods increased by over $1,700. And in the case of broadcasts a rise of $100 and exports led to an additional $200 in exports of food. And it also found that an additional exports of $100 and Korea’s cultural contents as a whole led to an increase of $248 in consumer goods, goods exports. And this was based on analysis of exports to six regions of China, Japan, Southeast Asia, North America and Europe.
Alex Jenson 10:04
And we’ve seen startups developing technologies and services related to Kpop particularly related to Kpop fans that are attracting major investments as a result.
Kyungmi Choi 10:15
Alright, so one of them is K town for you. And this is a platform that connects fan clubs with shopping malls, specializing in Kpop merchandise, and some 5000 fan clubs from over 170 countries have opened their fan pages on this platform. And the page also distributes CD albums of Korean musicians to fans overseas. And even though the sales of CD albums as a whole have been decreasing, out of around 57 million albums sold in Korea last year 10.26 million were sold through or through this platform alone, and 90% of them were shipped internationally. And so thanks to this, the company’s sales came to 214.6 billion won last year even under the pandemic and it has over 4 million members and it broke 200 billion won in revenue last year. And it recently received 50billion won from LV investment, KB securities and SJ Investment Partners and investor Jim Rogers have recently invested in liverwurst. This is an operator of an online Kpop investment service called VX, and the amount of investment hasn’t been unveiled. But through the service users can trade neighbouring rights of Kpop tracks and over 2000 users from some 50 countries have taken part in its training.
Alex Jenson 11:32
And just to close here to make sure that the Kpop industry as well as Korea’s other popular cultural contents get the support they need. The government has vowed to strengthen overseas promotion of Hallyu content.
Kyungmi Choi 11:44
Yes, so the Ministry of Culture, Sports and Tourism announced in March that it’ll collaborate with other government ministries to come up with measures to backhaul us popularity. And it has dubbed this though how you outbound activation plan, and it’ll expand the role of the Korean cultural centers that are established abroad. And the centers will carry out collaborative projects with other Hallyu related organizations by forming K initiative consultative groups. And one example of this is how a Korean Cultural Center has teamed up with the Korea Tourism Organization and the Korea Trade Investment Promotion Agency to open a K brand overseas promotion Hall in Indonesia. And this is set to open in the second half of this year. And the government also plans to expand King Sejong institutes. These are the Korean language education centers run by the government. And they plan to expand the number to 270 by the end of this year. And it’ll also open more Korea contents business centers. And the ministry will also hold a K Cultural Festival from late September to early October this year. And this event will include popular culture as well as other highly related industries as well.
Alex Jenson 12:54
Let’s see what happens when the government changes. But hopefully everyone sees the sense in keeping Kpop on its course as well as the industry is related to other cultural assets. Like for example, the movie industry, the dramas that are flourishing online and so on. The thing is coming. It’s not just about everyone being on the same page and the need to promote them. It’s the way you promote them and allow creativity to flow that’s been a source of controversy in the past. So perhaps we’ll revisit that space, either with a glowing reference for the next administration or or perhaps otherwise, for now. Can we try? Thank you very much.
Kyungmi Choi 13:29
Thank you, Alex.
Alex Jenson 13:30
And let me also thank everybody for joining us on this Monday. Hope you have a fantastic week ahead. We’ll be back with another episode tomorrow. And in the meantime, if you’ve got any feedback as ever get in touch through LinkedIn search KBLA or email info@kbla.net.
Transcribed by https://otter.ai