The Evolving Landscape of South Korea’s Entertainment Powerhouses

South Korea’s cultural influence seems stronger than ever, with global sensations like BTS topping charts, the Oscar-winning film Parasite, and a plethora of popular Korean dramas on streaming platforms like Netflix. With exports from the arts hitting an impressive $15.18 billion in 2024, South Korea has solidified its status as a cultural powerhouse. However, beneath this success, the industries that propelled the Korean Wave—cinema and K-pop—are undergoing significant transformations that could affect their creative essence.

The Troubling State of South Korean Cinema

South Korea’s film industry is facing one of its most challenging periods. Film admissions have plummeted by 45% since 2019, with ticket sales dropping from 226 million to just 123 million, causing box office revenue to fall from $1.3 billion to $812 million. Investment in domestic cinema is also slowing. Once known for releasing over 40 local films a year, distributors are now projected to release around 20 by 2025, with many warning that the situation could worsen as the backlog from the pandemic diminishes and new projects fail to materialize.

Kim Han-min, the director behind the Yi Sun-sin trilogy, candidly warned lawmakers last year that the film sector is “on the brink of collapse.”

Jason Bechervaise, a professor specializing in Korean film, believes that this crisis is not just a temporary drop but a reflection of deeper structural issues. He points out that rising production costs and reduced financial margins have led to a diminishing capacity for mid-budget films, which were once crucial for nurturing new talent and experimental filmmakers. Talent is increasingly migrating to streaming platforms, where the financial landscape is more stable.

The rapid shortening of the “holdback window” for films— the time between theatrical release and availability on streaming—has left audiences with little incentive to watch movies in theaters. This has triggered unprecedented consolidation in the industry, with cinema chains like Lotte Cinema and Megabox planning to merge their extensive networks of screens.

While cinemas are investing significantly in premium viewing experiences, such as Imax and Dolby formats, industry experts caution that without a consistent flow of domestic films, such upgrades may not lead to a stable recovery.

K-Pop Faces Its Own Challenges

The struggles aren’t confined to cinema; the K-pop industry, long seen as a cornerstone of South Korean cultural exports, is also navigating turbulent waters. In 2024, physical album sales dropped by 19.5%, marking the first decline in a decade, with projections for further declines through 2025. Although album sales include international releases, few achieved significant traction on Korean music charts.

However, many K-pop agencies are finding fresh avenues for revenue, with concert earnings now surpassing traditional album sales as they pivot towards global touring and live events. Areum Jeong, a professor of Korean studies, notes that agencies are increasingly focusing on their most dedicated fans, often at the expense of broader public appeal. This model emphasizes catering to core fan needs, which fuels spending and support but raises questions about the future of K-pop’s broader cultural impact.

Moreover, smaller agencies, once vital for innovation and variety in the K-pop scene, now find themselves struggling against rising costs and a diminishing slice of fan expenditure. Interestingly, the global resonance of Korean cultural phenomena no longer guarantees profits for Korean companies alone.

For instance, Netflix’s animated feature KPop Demon Hunters became a hit, crafted in the U.S. but rooted in Korean aesthetics. Jeong describes it as a hybrid version of K-pop, illustrating how Korean cultural expressions have become malleable enough to be recreated internationally, often without direct involvement from Korean artists or agencies. Concurrently, rival groups trained in Korean methodologies are emerging in regions like Japan and Southeast Asia, intensifying competition.

Despite the proliferation of K-pop influences, audiences still yearn for authentic encounters with Korean culture, spurred by renewed interest in museums, food brands, and cosmetics linked to popular titles. Bechervaise notes a shift in creative dynamics, highlighting that as domestic productions become more formulaic, creators from American studios and the Korean diaspora are tapping into Korean cultural elements in their own works, suggesting that Hollywood is currently outpacing Korea in this domain.

In response to these industry challenges, the South Korean government has unveiled a comprehensive five-year plan, investing approximately 51.4 trillion won to bolster the country’s cultural export landscape, enhance arts training, and expand tourism. Additionally, the founder of JYP Entertainment has been appointed to co-chair a new presidential cultural committee aimed at promoting Korean pop culture worldwide.

Major agencies like HYBE and SM Entertainment are also setting up regional offices in Southeast Asia, India, and China. Critics, however, express concern that this rush toward international expansion may divert attention away from the foundational structures that fostered South Korea’s cultural rise, risking the authenticity that initially captivated global audiences.

Jeong remains optimistic that these industries will continue generating revenue but warns that mere financial gain is insufficient for genuine creative revival. “The Korean entertainment sector will likely remain profitable,” she states, “but replicating a phenomenon like KPop Demon Hunters that resonates worldwide could be challenging.”