By Jeffrey Jones
The new dynamo of the Korean economy is not steel, cars, ships or semiconductors, but a product stemming from the creativity of Korea’s youth. Korea’s entertainment industry is now a major export industry and growing stronger each year.
There is no question that Korean entertainers now dominate the Asian entertainment market often attaining star status and popularity exceeding local celebrities in neighboring countries. It is not unusual for visiting Korean actors or singers to create traffic jams or paralysis at airports and other public places in China, Japan, Vietnam, Thailand or Singapore. It won’t be long before Korean movies will surpass ships, cars or semiconductors as a leader of Korean exports.
The market has begun to recognize the importance of the entertainment industry. Recently, one of Korea’s top talent agencies was successfully listed on the stock market and the competition for subscriptions for the IPO shares was 586:1 with more than a trillion won vying to purchase the company’s stock. Korean entertainment is no longer the mom & pop business it once was and it is deserving of greater interest on the part of the business infrastructure of Korea.
Historically, perhaps as a result of the Confucian ethics so strongly implanted in Korean mores, the entertainment industry has not been held in high social esteem. As a result, the infrastructure supporting the entertainment industry, both in terms of the software and hardware, is nowhere near the level it should be.
For example, the legal and accounting professions have not been active in this segment of the Korean economy such that the legal and accounting practices have not caught up with the sophistication of the performers in the industry. Contract terms, loyalty arrangements, accounting transparency, etc. are woefully behind the quality of the performance talent.
Given the size of the entertainment industry in Korea, it is also surprising to note the lack of suitable hardware that is needed to support the industry, particularly in a country that has focused on hardware development. It is very sad and surprising that most of Korea’s top singers have to leave the country to produce quality shows for their fans. There are simply no venues or arenas in Korea suitable for their performances.
Most recently, Korean music awards were held in Singapore given the absence of a venue in Korea that could house the awards ceremony. MGM Grand in Las Vegas recently hosted a K-Pop show that simply could not have occurred in Korea because of the absence of a suitable venue where such a show could be shown.
It is gratifying therefore that companies like Las Vegas Sands, MGM and Wynn, who recognize the potential of the Korean market, have recently indicated their willingness to invest in Korea and build the size and type of facilities in integrated resorts that can support the entertainment industry in Korea.
With these types of venues in Korea, the entertainment industry can have the necessary facilities to showcase their talent, provide a meaningful and enjoyable source of entertainment for the Korean public and be a major source of tourism revenues enriching not only the pockets of entertainers and their management teams, but also be a source of additional revenue to the numerous small businesses who support tourism.
Korea should take a hint from the Singapore government who recently adopted a policy of opening integrated resorts. Such a policy can be a real boom to Korea’s newest export industry and help to ensure the success of Korean entertainment.
Jeffrey Jones, an international lawyer at Kim & Chang, is a former AMCHAM Korea Chairman.