Korean Pop Takes Off! Social Media Strategy of Korean Entertainment Industry JoongHo Ahn Sehwan Oh & Hyunjung Kim Graduate School of Business Seoul National University Seoul, Korea College of Business Administration 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 dramaoriented craze of the first K-wave, Korean pop music (shortly Kpop) 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 Kwave 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. 978-1-4673-4843-0/13/$31.00 © 2013 IEEE 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 in Korean (TOPIK) increased from 26,611 in 2005 to 151,166 in 2012 [2]. Furthermore, Korean companies benefit from K-wave. From a survey with small and medium enterprises (SMEs), the Institute for International Trade reported that K-pop contributes to enhancing the value of Korea image and playing a role of icebreaker for business with foreign partners [1]. LG Electronics, Korea’s second largest consumer electronics firm, displays its state-of-the-art TVs featuring music videos by Kpop idol groups and artists such as Big Bang and 4Minute at international conferences. For instance, the Internationale Funkausstellung (IFA), the largest consumer electronics exhibition in Europe [8]. Besides Korean companies, multinational companies utilize marketing potential of K-pop artists to penetrate not only Korean market but also global market. For instance, Intel Corporation, a semiconductor chip maker, released a commercial song in collaboration with a K-pop idol group, Girls’ Generation, in 2011. As Intel’s new marketing campaign, Girls' Generation showcased Intel products in retail stores across Korea, Taiwan and other Asian countries. In the same year, YG Entertainment collaborated with Nikon in a marketing campaign, “A Shot A Day”, to target the youth audience. In 2013, PSY, the South Korean artist who set historic popularity records with his “Gangnam Style” music video on YouTube, starred in a Super Bowl commercial for Wonderful Pistachios. II. K-POP ENTERTAINMENT AGENCIES AND THEIR SOCIAL MEDIA OUTLETS As mentioned earlier, recent K-wave is driven by K-pop. According to the Ministry of Culture, Sports and Tourism, it is reported that around 1,000 entertainment agencies are active in Korea. In terms of the number of K-pop artists, total sales, and global reputation, there are “big three” record labels and entertainment agencies in Korea such as SM Entertainment, YG Entertainment and JYP Entertainment (see Table I). SM Entertainment, the oldest and the largest entertainment agency, takes the lead of K-pop music industry in Korea. It was established by Lee Soo-Man and "SM" was the initials of the agency founder's name. It boasts of a wide range of K-pop artists such as Kangta, BoA, TVXQ, TRAX, The Grace, Super Junior, Zhang Liyin, Girls' Generation, J-Min, Shinee, f(x), and EXO. YG Entertainment, the nation’s second-largest agency, specializes in producing R&B and hip hop music. YG stands for “Yang Goon” and are also the abbreviation of the CEO, Yang Hyun-suk. Including PSY who made global sensation with “Gangnam Style”, YG’s current roster consists of Big Bang, 2NE1, Se7en, Epik High, Lee Hi and Gummy. JYP Entertainment is another major record label, founded in 1997 by Park Jin Young. Wonder Girls, JOO, 2AM, 2PM, Miss A, San E, JJ Project, Baek Ah Yeon, and 15& are under the management of JYP Entertainment. TABLE I. THE BIG THREE KOREAN RECORD LABELS AND ENTERTAINMENT AGENCIES K-pop Entertainment Agencies Established Year Founder Sales (2011) Current K-pop Artists Website SM Entertainment YG Entertainment JYP Entertainment 1995 1996 1997 Lee Soo-Man Yang Hyun-suk Park Jin Young 143 billion won 78 billion won 10 billion won Big Bang, 2NE1, PSY, Se7en, Epik High, Lee Hi, Gummy. Wonder Girls, JOO, 2AM, 2PM, Miss A, San E, JJ Project, Baek Ah Yeon, 15&. www.ygfamily. com www.jype.com Kangta, BoA, TVXQ, TRAX, The Grace, Super Junior, Zhang Liyin, Girls' Generation, JMin, Shinee, f(x), EXO www.smtown.c om These three entertainment agencies are allegedly differentiated from their philosophy and practices in recruiting new talents. Yim [14] pointed out that SM Entertainment is likely to put more weight on its artists’ appearances, while YG Entertainment considers unique characteristics of their artists. Some liken SM Entertainment to an elite school where a thorough education is provided to its artists from acting to singing and dancing, whereas YG Entertainment tries to maximize trainee’s strong points instead of complementing weaknesses. JYP Entertainment has preference for foreign language speaking abilities and puts more focus on education for its artists to communicate with international fans. There are numerous variations in the definition of social media. Kaplan and Haenlein [4] defined social media as “a group of internet-based applications that build on the ideological and technological foundations of Web 2.0, that allow the creation and exchange of User Generated Content”, while Kietzmann, et al. [5] argued that “social media employ mobile and web-based technologies to create highly interactive platforms via which individuals and communities share, cocreate, discuss, and modify user-generated content.” Representative social media can be exampled such as social networking sites (MySpace, Facebook), Video sharing sites (YouTube), business networking sites (LinkedIn), collaborative websites (Wikipedia), virtual worlds (Second Life), social bookmarking sites (Reddit, Digg), microblogging service (Twitter), etc. From a marketing perspective, researchers and business managers focused on the potential of social media. Social media enables companies to communicate with customers. At the same time, it enables customers to talk to one another through a wide range of channels. Customers perceive social media as a more credible information source than corporatemanaged communication. Therefore, it became important for 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 subscriptionbased 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. TABLE II. Social Media Joined Site YouTube Facebook Twitter No. of subscribers (mil.) No. of video views (mil.) No. of videos Joined Site Likes (mil.) Joined Site Followers (thousand) 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. SOCIAL MEDIA OF BIG THREE K-POP ENTERTAINMENT AGENCIES (AS OF JAN. 2013) K-pop Entertainment Agencies SM Entertainment YG Entertainment JYP Entertainment March 2006 January 2008 http://www.youtube.com/YGEntertain ment January 2008 http://www.youtube.com/jypentertai nment 1.9 0.8 0.2 843.3 451.1 49.4 731 March 2011 www.facebook.com/smtown 2.0 October 2012 www.twitter.com/smtownglobal 156 August 2010 www.facebook.com/ygfamily 0.6 October 2010 www.twitter.com/ygent_official 91 January 2011 www.facebook.com/jypnation 0.4 November 2010 www.twitter.com/jypnation 515.6 478.9 266.4 www.youtube.com/SMTOWN Through the Global Auditions, SM recruited few K-pop stars, such as Super Junior-M’s Henry (a finalist of the 2006 Global Auditions) and f(x)’s Amber ( a participant of the 2007 U.S. auditions). For “2013 Global Audition” event, which is to take place from January to April 2013 in 5 countries and 14 cities, SM released an official promotion video through SMTOWN YouTube channel (www.youtube.com/smtown) and opened a dedicated page at Facebook (www.facebook.com/smaudition). Other entertainment agencies also use various social media to engage customers with global audition program. YG Entertainment manages the related pages at Facebook (www.facebook.com/ygaudition) and Twitter (www.twitter.com/yg_audition), while JYP Entertainment communicates with audience at its dedicated Facebook page (www.facebook.com/jypaudition). and manage Facebook and Twitter accounts to communicate with audience more closely. 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. In summary, social media strategy of Korean entertainment agencies can be presented as follows: 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. This case could be a benchmark for any entertainment agencies who hope to maximize business potential with social media. REFERENCES [1] D. Stimulate audience with exclusive contents K-pop entertainment agencies leak teasers on social media to promote their new music videos or events and make it go viral among their fans more quickly. While YG Entertainment’s 2NE1 released its seventh Korean single, “I Am the Best” on YouTube, it exclusively leaked a series of teasers to arouse the interest of its fans beforehand. The first teaser of the song was released on June 19, 2011 featuring 2NE1's leader, CL. The teaser was posted via YG-Life along with the official artwork of the song. YG Entertainment also revealed that they would release a 10-second snippet of the song each day until the full track release. Finally, the music video of the song premiered on 2NE1's official YouTube channel on June 27, 2011. Similarly, on December 20, 2012, SM Entertainment posted a teaser image on their official Twitter. The following day the music video and single for “Dancing Queen”, a prerelease single, was released. It also ended with a teaser for their upcoming 4th album titled “I Got A Boy,” with the title track's release date of January 1, 2013 being revealed at the same time. The teasers were presented through various social media channels, including their official homepage, YouTube SM Town Channel, official Twitter, Facebook and Naver, a Korean Internet search portal, on December 26. IV. [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] CONCLUSIONS With the rapid spread of social media, K-pop has spread globally, expanding its fandom outside of Asia. 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