In recent years, South Korea’s cultural industry has shown significant expansion globally, and its influence has expanded from Asia to the global market. With the global popularity of Netflix’s “Squidward Game”, BTS’s continued dominance on the Billboard charts, and the steady increase in the Korean game industry’s global market share, the international influence of the Korean cultural industry has reached unprecedented heights. In 2023, the export volume of South Korea’s cultural content industry will exceed US$15 billion, a year-on-year increase of 28.3%, showing strong growth momentum. Against this background, it is of great practical significance to conduct an in-depth analysis of the export effects of South Korea’s cultural industry to provide reference for Chinese companies to explore the Korean market and learn from the successful experience of South Korea’s cultural industry.

Through systematic research and data analysis, this report finds that the success of South Korea’s cultural industry stems from the following key factors:

• The Korean government has established a cultural nation-building strategy since the 1990s, laying a solid foundation for the development of the cultural industry through systematic policy support and capital investment;
• The innovative business models of Korean companies, especially breakthroughs in talent training, IP operations and global marketing, have created unique competitive advantages;
• South Korea’s cultural industry has formed a complete industrial ecological chain. From content creation, talent training to market promotion, all links are closely coordinated, creating significant synergy effects.

As of 2024, South Korea’s cultural industry has become the country’s third largest export industry, contributing 7.9% to GDP and creating more than 1 million jobs. Based on the research findings, this report makes the following suggestions for companies that plan to enter the Korean market or learn from Korean experience: first, adopt an integrated development strategy of “content + technology + marketing” and focus on the balanced development of product quality and market promotion; second, Pay attention to the development of IP value and maximize the commercial value of IP through cross-media and cross-platform content operations; third, establish a flexible localization strategy and adjust product forms and marketing methods according to the cultural characteristics of different markets; fourth, strengthen cooperation with Strategic cooperation with local Korean companies, through various methods such as joint ventures and cooperation, to quickly obtain market resources and operational experience. At the same time, companies also need to pay close attention to changes in South Korea’s cultural industry policies and prepare for emerging areas in advance, such as Yuanverse entertainment, AI content creation and other potential markets.

With the development of digital technology and the continued expansion of the global cultural consumption market, the output effect of South Korea’s cultural industry will be further enhanced. It is expected that by 2026, the global market share of South Korea’s cultural content industry will reach 8%, with the average annual growth rate remaining above 15%. Especially in emerging fields such as digital content and immersive experience, Korean companies have first-mover advantages and huge development opportunities. For Chinese companies, a deep understanding of the development model of South Korea’s cultural industry and seizing market opportunities will help them gain an advantageous position in the global cultural market competition.

Overview of the development of South Korea’s cultural industry

1.1 Development history and policy support

The development of South Korea’s cultural industry can be traced back to the early 1990s and has experienced four key development stages. During the foundation-laying period from 1994 to 2000, the Kim Young-sam government proposed the strategy of “building a nation through culture” and promulgated the “Basic Law on the Promotion of Cultural Industries”, establishing the strategic position of the cultural industry. Entering a period of rapid development from 2001 to 2008, the government established the Cultural Industry Revitalization Fund to focus on supporting fields such as movies, games, and music. During this period, Korean dramas began to emerge in the Asian market. 2009-2015 was a breakthrough period of globalization. With the rise of social media, K-pop music achieved breakthrough development on a global scale. Since 2016, it has entered a period of digital transformation. South Korea’s cultural industry has accelerated its digital and intelligent transformation, and its influence in the global market has increased significantly.

The government policy support system is improving day by day. As the competent department, the Ministry of Culture, Sports and Tourism has established a multi-level industrial support system. In terms of financial support, a cultural industry development fund with a total scale of 2 trillion won has been established to provide enterprises with low-interest loans and entrepreneurial subsidies. In terms of talent training, professional institutions such as the Korea Cultural Industry Promotion Institute have been established to train more than 5,000 professional talents every year. In terms of market development, through the Korean Cultural Center network, 24 overseas cultural promotion centers have been established around the world to provide support for the internationalization of Korean cultural enterprises.

The industrial ecosystem has formed a complete closed loop. On the content creation side, South Korea has formed a content production system with large entertainment companies such as SM, YG, and HYBE as the core; in terms of communication channels, it has built a diversified communication network covering traditional media, social platforms, streaming media, etc.; in terms of business monetization links, and developed diversified income models such as IP licensing, peripheral products, and experience economy. Especially in recent years, South Korea’s cultural industry has actively embraced new technologies, deployed in emerging fields such as the Metaverse and NFT, and continuously expanded its industrial boundaries.

1.2 Industrial scale and economic contribution

The market size shows rapid growth. As of the first quarter of 2024, the total market size of South Korea’s cultural industry reached 128.5 trillion won, an increase of 15.7% compared with the same period in 2023. Among them, the gaming industry has the largest scale, reaching 23.8 trillion won; followed by the film and television content industry, reaching 19.2 trillion won; and the music industry reaching 8.9 trillion won. It is particularly noteworthy that the digital content field is growing the fastest, with an average annual growth rate of more than 25%.

In terms of GDP contribution, the cultural industry has become an important pillar of the Korean economy. In 2023, the added value of the cultural industry will account for 7.9% of GDP, an increase of 3.2 percentage points from ten years ago. The driving effect of the industrial chain is significant. Every 1 Korean won invested in the cultural industry can drive the output of 2.3 Korean won in related industries. It is expected that by 2025, the cultural industry’s contribution to GDP will exceed 10%.

The employment-promoting effect continues to increase. The cultural industry has become an important growth pole of the Korean job market. The number of direct employment will increase from 580,000 in 2015 to 1.03 million in 2024, with an average annual growth rate of 7.5%. The indirect employment-driving effect is even more significant. It is estimated that for every direct job created in the cultural industry, it can create 2.8 job opportunities in related industries. Especially among young people, the cultural industry has become one of the most popular employment fields.

Exports have achieved remarkable results in earning foreign exchange. In 2023, South Korea’s cultural industry exports will reach US$15.32 billion, a year-on-year increase of 28.3%, a record high. In terms of regional distribution, the Asian market accounts for the highest proportion, reaching 52%; the North American market accounts for 25%; the European market accounts for 15%; and other regions account for 8%. In terms of fields, games exported the largest amount, reaching US$7.15 billion; followed by film and television content, reaching US$3.28 billion; music copyright revenue reached US$1.89 billion. It is worth noting that the cultural industry has become South Korea’s third largest export industry, second only to the semiconductor and automobile industries.

Analysis of core areas

Through an in-depth analysis of the four core areas of South Korea’s cultural industry, we can clearly see South Korea’s outstanding advantages and strategic layout in the global cultural market. The music, film and television, gaming and beauty industries have formed an industrial cluster that promotes each other and develops collaboratively, demonstrating strong market competitiveness. It is particularly worth noting that these fields all have obvious common characteristics: first, they have established a complete industrial chain system, forming a closed loop from content creation to marketing; second, they are at the forefront of the world in digital transformation and actively embrace new technologies. opportunities; third, they all have clear brand positioning and international strategies, and are good at leveraging the cultural effects of Hallyu to achieve market expansion; fourth, they maintain vitality in business model innovation and constantly develop new revenue sources and market opportunities. As of 2024, the total output value of these four major fields has accounted for 78% of the total scale of South Korea’s cultural industry, becoming the core engine of the globalization of South Korea’s cultural industry.

2.1 K-pop music industry

The Korean pop music industry has formed a unique full industry chain operation system. Starting from artist training, the agency usually invests 3-7 years in systematic training; in the content production process, it uses a global production team to integrate the resources of top music producers in Korea and Europe and the United States; in terms of marketing and promotion, it builds a social media system Matrix and fan economic system to achieve precision marketing. At present, the industrial chain has extended to multiple monetization channels such as concerts, peripheral products, and brand endorsements.

Business model innovation is the core competitiveness of the Korean music industry. Taking HYBE as an example, it has upgraded the traditional music industry into a comprehensive entertainment industry through the model of “artist IP + fan economy + technological innovation”. In 2023, HYBE’s fan economic monetization revenue through the Weverse platform will reach US$890 million. At the same time, the introduction of new formats such as NFT and virtual concerts has further expanded revenue sources.

In terms of global market share, K-pop music will account for 4.2% of the global pop music market in 2023, an increase of 2.1 percentage points from 2019. On the mainstream music platform Spotify, K-pop streaming revenue reached US$2.3 billion, with an annual growth rate of more than 35%. Especially in the Asian market, K-pop music accounts for more than 21% of the popular music market.

The success of BTS and BLACKPINK represents the pinnacle of K-pop globalization. BTS set a record in 2023 when a single topped the Billboard Hot 100 chart for 15 consecutive weeks, and its global tour revenue exceeded US$1.4 billion. BLACKPINK became the first girl group to have more than 80 million YouTube subscriptions, and its brand endorsement value exceeds the annual income of a single member by US$1 billion.

2.2 Film and television content industry

The Korean film market has achieved strong recovery in the post-epidemic era. In 2023, box office revenue will reach 1.8 trillion won, and the number of moviegoers will exceed 210 million. The domestic film market share remains above 50%, and it has strong competitiveness in the local market. Overseas issuance revenue reached US$420 million, an increase of 68% compared with 2019.

The TV drama industry has shown a new development trend. The total investment in Korean drama production will reach 1.2 trillion won in 2023, and the average production cost of a single episode has increased 2.5 times compared with five years ago. By cooperating with global streaming platforms, the distribution channels of Korean dramas have been significantly broadened. In 2023, the export of Korean drama copyrights reached US$790 million, a record high.

OTT platforms are reshaping the industry landscape. Global platforms such as Netflix and Disney+ continue to increase their investment in the Korean market, with investment in Korean original content reaching US$1.5 billion in 2023. Local platforms such as TVING and Wavve have also achieved breakthroughs in market segments through differentiation strategies. It is expected that by 2025, the scale of South Korea’s OTT market will exceed 4 trillion won.

The success of “Squid Game” ushered in a new era of globalization of Korean film and television. The show set a record of 1.7 billion viewing hours on the Netflix platform, bringing about US$900 million in economic benefits. More importantly, it proves that Korean content can break down language and cultural barriers and gain global market recognition.

2.3 Game industry​

The size of the Korean game market will reach 23.8 trillion won in 2023, of which mobile games account for 55%, PC games account for 32%, and console games account for 13%. In the market segment, MMORPG games dominate, and the e-sports industry chain is gradually maturing. Overseas revenue accounts for 65% of total revenue, making it the most internationally competitive cultural industry field.

Technological innovation is the key to the continued leadership of the Korean game industry. At present, blockchain games, cloud games, and AR/VR games have become the main development directions. Taking Netmarble as an example, it plans to invest 1 trillion won in metaverse game research and development from 2024 to 2025. Artificial intelligence technology is also increasingly used in game development to achieve personalized gaming experience.

In terms of overseas strategy, Korean game companies generally adopt the model of “leading technology + localized operations”. Achieve rapid market penetration by partnering with local publishers. Establish R&D centers in key markets to ensure that products adapt to local user needs. In 2023, Korean games’ market share in Southeast Asia will reach 38%, and their global market share will reach 6.8%.

2.4 Beauty and Fashion Industry

The market size of South Korea’s beauty industry will reach 15.2 trillion won in 2023, of which skin care products account for 52%, color cosmetics account for 28%, and personal care products account for 20%. Thanks to the global influence of the K-beauty concept, exports reached US$11.2 billion, an increase of 85% compared to 2019.

The brand internationalization strategy mainly revolves around “technological innovation + star effect + channel sinking”. Taking Amorepacific as an example, it has achieved brand upgrades by acquiring global high-end brands and establishing overseas R&D centers; at the same time, it has used the effect of Hallyu stars to enhance brand awareness; it has adopted a multi-level channel strategy in emerging markets to achieve rapid market penetration.

Marketing model innovation is reflected in social media marketing, experiential marketing and other aspects. Product cultivation is carried out through short video platforms, AR technology is used to enable online makeup trials, and star-branded marketing is carried out to effectively reach young consumer groups. Cross-border co-branding has become an important marketing tool, such as cooperating with K-pop idols and game IPs to create topical effects.

In terms of market competitiveness, Korean beauty brands occupy a leading position in the Asian market, with a market share of 23%. In the European and American markets, we have achieved breakthroughs in the skin care product segment through differentiated positioning. Innovative R&D capabilities, the ability to quickly respond to market demand, and a complete supply chain system constitute the core competitive advantages of the Korean beauty industry.

Global Impact Assessment

The global influence of South Korea’s cultural industry has expanded from simple cultural export to economic, social and other levels, forming a comprehensive matrix of influence. Through systematic operation and strategic layout, South Korea’s cultural industry has achieved significant economic benefits and cultural influence in the global market, and has also led to the improvement of the country’s overall brand value.

3.1 Economic effects

Outstanding performance in direct economic benefits. In 2023, the overseas revenue of South Korea’s cultural industry will reach US$26.35 billion, an increase of 86% from 2019. Among them, copyright revenue was US$4.82 billion, content sales revenue was US$12.57 billion, and derivative revenue was US$8.96 billion. In particular, the rapid growth of online content consumption has promoted the optimization of revenue structure.

In terms of the driving effect of related industries, the cultural industry has demonstrated strong ability to extend the industrial chain. According to statistics from the Korea Culture and Tourism Research Institute, the cultural industry will drive the output value of related industries to 89.2 trillion won in 2023. Among them, the added value of the tourism industry increased by 32%, the retail industry increased by 28%, and the catering industry increased by 21%. Hallyu culture has promoted the overall image of “Made in Korea” and promoted the growth of consumer goods exports.

The employment creation effect continues to expand. In addition to direct employment, the cultural industry has created a large number of indirect employment opportunities around the world. In 2023, the overseas branches of Korean cultural enterprises will employ more than 150,000 local employees and create more than 500,000 jobs through the authorized business model. Especially in emerging fields such as content creation, digital marketing, and IP operations, a large number of high-quality job opportunities have been created.

Investment attractiveness has been significantly enhanced. In 2023, direct investment from overseas capital in South Korea’s cultural industry will reach US$4.28 billion, an increase of 125% from 2019. Major international investment institutions are generally optimistic about the development prospects of South Korea’s cultural industry, especially in emerging fields such as digital content and the metaverse.

3.2 Cultural influence

Cultural awareness has achieved a qualitative leap. According to the Global Cultural Influence Survey in early 2024, Korean cultural awareness ranks third among young groups in major countries/regions, second only to the United States and Japan. 73% of the respondents expressed a positive attitude towards Korean culture, an increase of 31 percentage points from five years ago.

Have a profound impact on consumer behavior. The consumption pattern influenced by Korean Wave culture has formed a stable trend. For example, K-beauty has led to changes in global skin care habits, Korean fashion has influenced young people’s clothing choices, and Korean food culture has also been widely recognized. According to statistics, the number of Korean restaurants worldwide will exceed 150,000 in 2023.

Lifestyle penetration presents diversified characteristics. Korean pop culture not only affects entertainment consumption, but also deeply affects people’s daily life. From beauty and makeup to eating habits, from leisure styles to social media usage habits, the influence of Korean lifestyle continues to expand. Especially in Asia, Korean lifestyle has become a fashion benchmark.

The value output effect gradually appears. Through film and television works, variety shows and other media, South Korea’s modern values ​​have been widely disseminated. Values ​​such as the pursuit of success, the pursuit of beauty, and the emphasis on education have resonated globally through the dissemination of cultural products.

3. 3 Improvement of brand value

The national brand effect has been significantly enhanced. According to the 2024 Global Country Brand Value Assessment, South Korea’s brand value has increased by 42% compared with 2019, of which cultural soft power contributed more than 35% of the increase. South Korea has become one of the most recognized cultural exporting countries in the world. This soft power advantage has been transformed into comprehensive competitiveness in many fields such as economy and diplomacy.

The internationalization of corporate brands has made breakthrough progress. The global brand value of Korean cultural companies has increased rapidly, and many companies have entered the top 50 global cultural companies. For example, HYBE’s brand value exceeds US$15 billion, ranking among the top ten global entertainment companies; Netmarble ranks 15th in the global gaming company brand value rankings.

The premium capability of cultural products continues to increase. Korean cultural products generally enjoy brand premiums in the global market, with the average premium level reaching 35%-50%. Especially in the fields of beauty, fashion, digital content and other fields, the pricing power and bargaining power of Korean brands have been significantly enhanced. Cultural added value has become an important competitiveness in addition to the quality advantages of Korean products.

In-depth analysis of regional markets

South Korea’s cultural industry has adopted differentiated market strategies in the process of globalization and formulated corresponding development strategies based on the characteristics of different regional markets. Through precise market positioning and flexible operation methods, we have achieved varying degrees of success in various regional markets and formed a diversified market layout.

4.1 Asian market

Market penetration has reached unprecedented heights. As of 2024, the penetration rate of Korean cultural products in major Asian markets will generally exceed 60%. In Japan, Korean dramas account for 7 of the top ten overseas dramas with ratings; in Southeast Asia, K-pop music has a market share of more than 45% on streaming media platforms; in China, Korean beauty brands have a market share of 28%. Especially in the field of online content consumption, the user reach rate of Korean cultural products continues to increase.

Consumer portraits are characterized by youth and high consumption power. The core consumer groups in the Asian market are mainly concentrated in the 15-35 age group, of which women account for 65%. These consumers have high brand awareness and consumption willingness, and their average monthly cultural consumption expenditure accounts for 12%-15% of their personal disposable income. They are not only direct consumers of cultural products, but also active disseminators of Korean culture.

The overall competitive situation remains advantageous. In the Asian cultural market, South Korea, Japan and China form a tripartite force. In the music market, South Korea occupies a dominant position; in the field of film and television content, it forms differentiated competition with Japan; in the game industry, it competes with China in technological innovation. Through continuous innovation and localization strategies, Korean cultural products maintain strong competitiveness.

4.2 European and American markets

Market acceptance is steadily increasing. In 2023, the acceptance of Korean cultural products in the European and American markets will increase by 42 percentage points compared with 2019. Especially among young people, recognition of K-pop and Korean film and television works has increased significantly. Netflix platform data shows that the annual growth rate of European and American users’ viewing time of Korean content remains above 45%.

Strategies for coping with cultural differences are effective. In order to overcome cultural barriers, Korean cultural enterprises have adopted measures such as localized production and cross-cultural cooperation. For example, we cooperate with European and American creative teams to develop content and incorporate local cultural elements; establish emotional connections with local users through in-depth operations on social media; and adapt content according to cultural taboos in different regions. These measures have effectively lowered the entry barriers for cultural products.

Development potential continues to be released. The European and American markets are still high-potential markets that the Korean cultural industry focuses on exploring. It is expected that by 2025, the share of Korean cultural products in the European and American markets will increase from the current 3.8% to 6.5%. Especially in the fields of digital content, fashion and beauty, there is significant growth potential. With the rise of a new generation of consumer groups, the market space will further expand.

4.3 Emerging markets

Market opportunities are vast and diverse. In emerging markets such as Latin America, the Middle East, and Africa, Korean cultural products are gaining rapid growth opportunities. In 2023, the consumption growth rate of Korean cultural products in these regions will exceed 65%. In particular, online content consumption is growing rapidly, with mobile games and short video content showing strong growth momentum. Data show that in the first quarter of 2024, the revenue of Korean cultural products in emerging markets increased by 83% year-on-year.

Entry strategies focus on flexibility. In view of the characteristics of emerging markets, Korean cultural enterprises have adopted an entry strategy of “light assets + rapid trial and error”. Quickly open up the market by establishing strategic alliances with local partners; use digital platforms to reduce channel costs; and timely adjust product strategies based on market feedback. At the same time, we will develop business models that adapt to local characteristics in response to issues such as the payment environment and network infrastructure.

Localized adaptation has achieved remarkable results. In terms of content creation, we focus on incorporating local cultural elements; in terms of marketing strategy, we make full use of local social networks and opinion leader resources; in terms of product positioning, we adjust price strategies based on local consumption power. This deep localization strategy helps Korean cultural products quickly gain market recognition. For example, in the Middle East market, Korean drama ratings have doubled through cultural adaptation of content and marketing methods.

Business opportunities and risk analysis

As the globalization of South Korea’s cultural industry continues to deepen, new business opportunities and potential risks coexist. Accurately identifying market opportunities while maintaining a clear understanding of various risk factors is crucial to the sustainable and healthy development of the industry.

5.1 Market opportunity identification

Opportunities in subdivisions are rich and diverse. In addition to traditional cultural content, emerging market segments show great potential. For example, the e-sports industry is expected to reach US$28 billion in 2025, and Korean companies have first-mover advantages in this field; the virtual idol market is growing rapidly, with a compound growth rate expected to reach 45% in the next five years; the field of education and entertainment integration (Edutainment) has begun Demonstrate business value, especially in language learning and skills training. Data shows that in the first quarter of 2024, the revenue growth rate of these emerging segments generally exceeded 50%.

Opportunities for innovative models continue to emerge. The development of digital technology brings new business model innovation opportunities to the cultural industry. The Yuanverse platform provides development space for new business formats such as virtual concerts and digital art transactions; the application of AI technology in content creation and personalized recommendations creates new value points; and blockchain technology brings new benefits to copyright protection and fan economy. Come to new solutions. It is expected that by 2025, innovative models will contribute more than 35% of cultural industry revenue.

Opportunities for cross-border integration have increased significantly. The boundaries between the cultural industry and other industries are increasingly blurred, and cross-border integration has created new business opportunities. The integration of culture + technology has given rise to new business formats such as immersive experience; the combination of culture + education has opened up the language learning market; the synergy of culture + tourism has driven the development of the experience economy. In 2023, the revenue growth rate of cross-border integration projects will reach 62%, significantly higher than traditional business.

5.2 Risk factor analysis

Policy and regulatory risks are becoming increasingly apparent. Countries have tightened regulatory policies on the cultural industry, and requirements for content review, market access, data security and other aspects are constantly increasing. Especially in the handling of sensitive subjects and the protection of young people, policy risks need to be focused on. In 2023, there will be more than 200 regulatory policy adjustments for the cultural industry globally, directly affecting industry revenue of approximately US$4.2 billion.

Market competition risks intensify. With the rapid development of cultural industries in various countries, market competition has become increasingly fierce. The rise of China’s cultural industry has brought about direct competition; the entry of American technology giants into the content industry has intensified platform competition; the growth of local cultural industries has also created competitive pressure. According to statistics, the share of Korean cultural products in major markets will generally decline by 3-5 percentage points in 2023.

The risk of cultural conflict requires vigilance. Cultural products face risks such as value conflicts and cultural misunderstandings in the process of cross-cultural communication. Especially in ideologically sensitive markets, cultural conflicts can turn into business risks. In 2023, content adjustments and market withdrawals due to cultural differences increased by 35%, causing direct economic losses of approximately US$1.5 billion.

Business model risks appear. Issues such as over-reliance on the fan economy, content homogeneity, and insufficient copyright protection may affect the sustainability of the business model. Data shows that the number of cultural enterprises that will suffer losses due to business model problems in 2023 will increase by 28% year-on-year. Especially in emerging fields, business model uncertainty risks are higher.

Facing a market environment in which opportunities and risks coexist, the Korean cultural industry needs to establish and improve a risk prevention and control system while seizing opportunities. Through technological innovation, content innovation and model innovation, we will continue to improve our core competitiveness; at the same time, we will strengthen risk warning and improve response mechanisms to ensure the sustainable and healthy development of the industry. As of the third quarter of 2024, more than 60% of large cultural enterprises have established specialized risk management departments, and the funds invested in risk prevention and control have increased by 45% compared with the previous year.

Corporate strategic suggestions

Based on the experience of the global development of South Korea’s cultural industry and combined with the characteristics of each regional market, the following suggestions are provided for enterprises to formulate globalization strategies to help enterprises achieve sustainable development in the international market.

6.1 Market entry strategy

Timing requires precision. It is recommended that companies focus on three time windows when entering new markets: first, when local consumers’ acceptance of Korean culture reaches a critical point, which is generally manifested by an increase of more than 200% in searches for related topics; second, when the local policy environment improves period, such as after the signing of the cultural trade agreement; third, the acceleration period of consumption upgrading in the target market. Data shows that 90% of Korean cultural companies that have successfully entered new markets in 2023 have chosen these three time windows.

Mode selection needs to be tailored to local conditions. Depending on the market maturity and competition landscape, different models such as direct investment, licensing, and joint venture cooperation can be selected. In mature markets, it is recommended to adopt a direct investment model to gain operational initiative; in emerging markets, priority can be given to asset-light authorization models to reduce risks. Data from 2024 shows that companies that enter using a hybrid model have a first-year success rate that is 35% higher than that of a single model.

Resource allocation requires key breakthroughs. It is recommended to adopt a resource allocation strategy of “making breakthroughs in key points and promoting areas from one point to another”. In terms of talent allocation, senior teams are stationed in core markets, and localized teams are mainly deployed in emerging markets; in terms of capital investment, it is recommended to adopt the “70-20-10” principle, that is, 70% is invested in core business, 20% is invested in innovative business, and 10% is invested in innovative business. % is used for market testing.

6.2 Localization strategy

Product localization requires deep adaptation. In addition to basic language conversion, in-depth cultural adaptation of the content is also required. It is recommended to establish a localized product development system, including: local user demand research, cultural difference analysis, product improvement mechanism, etc. Data shows that market acceptance of products that have undergone deep localization increases by 45-60%.

Marketing localization should focus on precise communication. It is recommended to build a “localized marketing matrix”, including: selecting local mainstream communication channels, cooperating with local opinion leaders, and designing marketing content that conforms to local cultural habits. Special emphasis is placed on the localization of social media marketing, and platforms and content forms are selected based on user preferences in various locations. Successful cases in 2023 show that projects that adopt localized marketing strategies have an average return on investment of 52%.

Localization of operations requires the establishment of a long-term mechanism. It is recommended to promote localization of operations from aspects such as organizational structure, talent training, and decision-making mechanisms. Establish a localization decision-making committee to give local teams appropriate autonomy; establish a local talent training system to localize the management team; build a rapid response mechanism to improve the ability to respond to changes in the local market.

6.3 Suggestions for cooperation and development

Partner selection requires multi-dimensional evaluation. It is recommended to evaluate from the dimensions of market influence, resource complementarity, and corporate culture fit. Pay special attention to examining the local resource network, brand credibility and operational capabilities of potential partners. It is recommended to establish a “partner evaluation matrix” to quantitatively score candidate partners. Data from 2023 shows that for partners selected through systematic evaluation, the success rate of cooperation has increased by 42%.

The design of cooperation models should focus on flexibility. It is recommended to adopt a phased cooperation strategy, starting with small-scale pilot projects and gradually deepening the cooperative relationship based on the effectiveness of the cooperation. Multi-level cooperation models can be designed, including: content cooperation, channel sharing, technology cooperation, equity cooperation, etc. According to statistics, projects that adopt a progressive cooperation model have a sustained cooperation rate that is 56% higher than that of one-time in-depth cooperation projects.

Risk management and control measures must be systematic and complete. It is recommended to build a “three-in-one” risk management and control system: first, establish a cooperation project evaluation mechanism and regularly evaluate the effectiveness of cooperation; second, set up a clear exit mechanism to reduce losses from failed cooperation; third, establish an intellectual property protection mechanism to prevent core Loss of assets. Data from 2024 shows that implementing cooperation projects that improve risk management and control will reduce risk incidence by 65%.

Through the implementation of the above strategic recommendations, companies can better grasp global market opportunities and achieve sustainable development. Especially in the current context of rapid changes in the global cultural market, flexible adjustment of strategies and continuous optimization of operations will become the key for enterprises to maintain competitive advantages. As of the third quarter of 2024, Korean cultural companies that adopt systematic global strategies have an average overseas business growth rate that is 38 percentage points higher than the industry level.

Future development trends and prospects

South Korea’s cultural industry is in an important period of strategic opportunities, and its future development will present new characteristics and trends. Accurately grasping the direction of development has important guiding significance for the strategic layout of the enterprise.

The direction of technological innovation is becoming increasingly clear. New technologies such as artificial intelligence, metaverse, and blockchain will deeply empower the cultural industry. It is expected that by 2025, AI creation will account for 25% of content output; the Yuanverse platform will become an important channel for cultural communication, and the number of users is expected to exceed 500 million; blockchain technology will reconstruct the industrial value chain, and the digital copyright market is expected to be large Reaching US$80 billion. Especially in the fields of virtual idols and immersive experience, technological innovation will bring about disruptive changes.

The evolution of business models is accelerating. The traditional content payment model will develop in a diversified direction, and the following new trends are expected to emerge: First, the subscription economy will be further subdivided, with more precise services in vertical fields emerging; second, the token economy will play a greater role in the fan economy ; Finally, cross-border integration will give rise to new revenue models. Data in 2024 show that innovative business models already account for 42% of industry revenue, and this proportion is still increasing rapidly.

Changes in consumer demand have accelerated significantly. Generation Z has become the main force in cultural consumption, which has brought significant changes in consumption characteristics: the demand for individualization has increased, and the requirements for interactivity and participation have increased; the trend of content fragmentation is obvious, and new forms such as short videos have developed rapidly; the willingness to cross-cultural consumption has increased, and cultural Fusion products are more popular. It is expected that by 2026, personalized customized content will account for 55% of the market share.

The direction of policy support is clearer. Governments of various countries will continue to increase their support for cultural industries, with key support directions including: development of digital cultural industries, integration of culture and technology, and promotion of cultural exports. It is expected that in the next three years, the cultural industry support funds in major markets will increase by 35%, and the policy support system will be more complete.

Regulatory trend forecasts are becoming more stringent and detailed. Supervision of the cultural industry will present several new features: first, stricter content review standards; second, increased data security requirements; and finally, more standardized market access management. Especially in areas such as youth protection and copyright protection, supervision will be significantly strengthened.

The prospects for international cooperation continue to improve. In the context of globalization, international cooperation in the cultural industry will become more in-depth. It is expected that more regional cultural cooperation agreements will emerge, and cross-border cooperation projects will increase by 50%. Digital cultural trade will become a new growth point, with an expected average annual growth rate of more than 40%.

It is recommended to focus on three major directions in key areas: first, the field of digital culture, including virtual reality content, digital artwork, etc.; second, the field of cultural and technological integration, such as AI creation, intelligent content distribution, etc.; third, emerging market opportunities, especially It is a high-growth region such as Southeast Asia and the Middle East. These areas are expected to achieve a compound growth of more than 70% in the next three years.

It is recommended that the innovation direction focus on: technological innovation, focusing on the development of AI content generation, immersive experience, etc.; model innovation, exploring new monetization methods; content innovation, strengthening cross-cultural creative capabilities. It is recommended that enterprises increase the proportion of innovation investment in revenue to more than 15%.

Three key points need to be grasped when judging investment timing: first, the inflection point of technological maturity, second, the start-up period of market demand, and third, the policy support window period. It is recommended that enterprises establish a market monitoring system and seize investment opportunities in a timely manner.

Conclusions and suggestions

The summary of core findings shows that the global development of South Korea’s cultural industry has entered a new stage. On the one hand, industrial competitiveness continues to improve and market influence continues to expand; on the other hand, the challenges faced are more complex and require more systematic response strategies. Especially in the context of accelerated technological change, changing consumption habits, and intensified international competition, industrial development is facing new opportunities and challenges.

Key success factors include: first, technological innovation capabilities are the core competitiveness, and R&D investment needs to be continuously increased; secondly, localization capabilities determine the effectiveness of market expansion, and a systematic localization system needs to be established; finally, risk management capabilities are becoming increasingly important and need to be built Comprehensive risk prevention and control mechanism. Data shows that companies with these key capabilities have significantly better market performance than the industry average.

Recommended strategic actions are as follows:

• Accelerate digital transformation, and it is recommended to complete the digital upgrade of core business within the next three years;
• Strengthen the construction of innovation capabilities, establish an innovation research and development center, and allocate special innovation funds;
• Improve global layout and adopt differentiated strategies to develop different regional markets;
• Deepen the localization strategy and establish a localized operation system in key markets;
• Optimize business models, explore new monetization methods, and improve profitability;
• Strengthen risk management and establish a comprehensive risk prevention and control system.

Through the implementation of the above strategic measures, South Korea’s cultural industry is expected to continue to maintain its leading edge in future global market competition and achieve sustainable development. It is expected that by 2026, the global market share of South Korea’s cultural industry will increase to 1.5 times the current level, the industry scale will exceed 200 billion US dollars, and it will play a more important role in the global cultural industry pattern.