Analysing K-Pop: How digital transformation shaped the global cultural juggernaut

K-pop is, without a doubt, a tech-savvy and wired industry with titanic economical significance. BLACKPINK’s estimated net worth is US$24 million. BTS, one of the biggest K-pop groups internationally, is worth over US$3.6 billion a year to South Korea’s economy. 

How did the ever-expanding Korean Wave and the industry’s successful positioning in the global market come to be? Korean entertainment labels like SM Entertainment, Big Hit and YG Entertainment owe their success to a multitude of factors; one of which is strategic digital transformation. 

So, how did digital transformation shape the lucrative K-pop industry to what it is today?

1) Digital transformation helped K-pop become more accessible to the world

Who hasn’t been hanging out on YouTube for the latest top hits in 2020? If K-Pop music is your kind of bop, you may have heard the likes of K-Pop groups like BTS and BLACKPINK topping the charts with their new songs.

This is one example of how the online diffusion of music is more rapid than offline sales in the industry. Regarding the Korean Wave, this facet of digitisation led to their global growth and international recognition; it’s a massive milestone that the J-Pop industry is noticeably lacking in. There was simply no incentive for Japanese companies to include online international appeal tactics in their roadmap. After all, much of the J-Pop industry’s profits stem from domestic offline sales

However, Korean companies reacted differently; English lyrics started appearing more often in K-pop songs, starting from the early 1990s. There has also been increased collaboration between foreign singers to produce more globalised music; from BTS’s collaboration with American pop singer Halsey to BLACKPINK’s collaboration with Selena Gomez.

As daily Internet usage rose with smartphone adoption, Korean business sectors strategically shifted their focus from hardware to software. It all started with releasing K-Pop tunes on YouTube and other social networking services (SNS) platforms. Young people around the world were able to easily access K-pop through these official online channels created by Korean businesses. Besides, K-Pop’s loose intellectual property right (IPR) regime played a big part in attracting a more global audience.

2) K-pop’s visual-focused programs strategically align with the latest digital devices

With the widespread adoption of smart devices, a singer or band’s visual image has become just as important as the song for many consumers. The impact of a well-integrated audio sound and visual image can enhance a song’s popularity among tech-savvy youths. The viral hit song ‘Gangnam Style’ and more recent K-Pop MV releases look aesthetically better compared to American music videos. 

As these songs get widely distributed through Internet intermediaries such as YouTube under a loose copyright regime, the international appeal for K-Pop comes easily. Digitisation has enabled these vibrant K-Pop music videos to amass so much popularity; to the extent that foreign YouTubers like American channel Fine Brothers Entertainment and British channel JOLLY have started uploading video reviews of said music videos.

In the meantime, J-pop – with its single focus on the audio sound – has found it hard to compete with K-pop audio-visual appeal. 

3) K-Pop businesses recognised digitisation as an opportunity instead of a threat

Many Japanese companies have been complacent in traversing foreign markets. This is despite the Japanese government efforts to further globalisation of J-Pop and other facets of Japanese culture like J-dramas and Japanese anime. Perhaps this could be due to prior perceptions that vilify SNS platforms for cannibalising offline music distribution services. In addition, Japan had at one point operated in the second-largest market in the world.

On the flip side, the Korean music industry has been noticeably more active in exploring foreign markets. They have gone so far as to even recruit and popularise foreign talents. K-Pop also offer prices that are cheaper than that of their overseas counterparts; perhaps this competitive streak stems from a time when K-Pop music distributors had to compete with music pirates for streaming numbers. A lot of their hard work has been paying off as foreign service providers seeking to enter the Korean market are generally willing to pay a higher price to the music industry to acquire more Korean music and compete against local companies. 

All in all, the Korean music industry has been welcoming these foreign service providers to enter the market. It can also be argued that competition with foreign companies has helped to enhance the quality of the Korean market.

With the emergence of the Internet, digitisation has transformed the music industry in terms of production and dissemination. Under these circumstances, consumers have also adjusted their music consumption habits. In this time and day, it is ever more pertinent to emphasise the responsive strategy of business activities toward digitisation, especially in a digital era where online diffusion prevails.

From a business standpoint, it’s important to go digital for any industry

Businesses all over the world are preparing for recovery in these unprecedented times. Firms should continue to make use of this downtime to digitise, restructure, and transform with digital solutions. It’s worth noting that there’s a lot of excitement about digitisation these days and for good reason. Digitisation allows businesses to improve their productivity massively, and this can be done with minimal time and effort. 

With Talenox as our HR payroll software product, we are glad to be one of the digital solutions that help thousands of companies digitise and automate HR processes. We believe it is crucial that companies can still manage their HR tasks with ease, especially in these uncertain times.

Nominated Best Payroll Software by HRM Asia, Talenox helps thousands of businesses make payment flexibly throughout the month, as well as submit tax forms through grade A, IRAS-approved processes that are fool-proof. We also play an official and important role in Singapore’s Smart Nation vision, all in the following SMEs Go Digital Programme by IMDA:

1. Start Digital Pack. This is where newly incorporated SMEs and SMEs that are new to using digital technology can take up any two solutions – like Talenox – at ZERO cost for at least six months with a minimum 18-month contract period. Download Start Digital e-brochure here. One of the ways you can get started is through DBS, OCBC and M1 among other banks and telcos.
2. Digital Resilience Bonus. SMEs in the F&B and Retail sectors that use PayNow Corporate, E-Invoicing and pre-defined digital solutions can receive bonus payouts of up to S$10,000. For more information on how you can apply and whether you’re eligible for the bonus, click here.