Arrival of Hallyu 4.0 Era... The Paradox of “KPop Demon Hunters” and Limited Benefits for South Korea’s Industry

“KPop Demon Hunters” illustrates the success of global Hallyu while simultaneously exposing the limitations of South Korea’s entertainment industry. Although the film has accumulated 314.2 million views, this is because both its production and funding were handled by American capital. American Sony Pictures Animation was responsible for production, while Netflix handled distribution and investment. The production cost is estimated at around $100 million (approximately 140 billion won), and Sony Pictures’ revenue from merely handling production without direct investment amounted to only about $20 million (approximately 28 billion won). In contrast, Netflix, which bore all the investment costs and secured the intellectual property rights, expects the future value of these assets to exceed $1 billion (approximately 1.4 trillion won). South Korean production teams and capital were completely excluded from the project. Experts describe this as the arrival of the “Hallyu 4.0 era.” Hallyu has gone through three stages: the first stage in the early 2000s focused on exports, the second stage expanded markets through the recruitment of foreign members and collaborations with local companies, and the third stage involved exporting the production system itself, such as through the establishment of overseas joint ventures. HYBE’s girl group “KATSEYE,” created in partnership with American Geffen Records, is a representative example of this. The 4.0 stage represents a phase where not only investment capital but also production entities are localized. In addition to “KPop Demon Hunters,” the recently released Apple TV+ music competition series “KPOPd” follows the same structure. As South Korean culture achieves unprecedented success through global platforms, a phenomenon of “decoupling” — where South Korea is removed from production and investment — has intensified. The weakness of South Korea’s domestic content industry ecosystem is identified as the root cause. Lee Seong-min, a professor at Korea Radio and Communication University, noted, “Just as Italians are surprised by Korean-style pizza or Americano ice coffee, Korean culture now faces questions regarding its own ‘K’ identity.” Changes in the revenue structure of K-pop fanbases are also a source of concern. Kim Jinu, a music data journalist, said, “As local production and distribution become more active, album sales — which are central to K-pop fanbase revenue — are declining. Since South Korea lacks sufficient concert venues, it must find new revenue streams such as overseas concerts.” Erosion of creators’ earnings is also worsening. Im Hee-yoon, a music critic, stated, “K-pop has already seen its creative earnings split due to collaborations with foreign composers. An alternative approach is for South Korean creators to increase their share of copyright royalties by introducing new rights related to choreography, an area where they hold strengths.” Overall contraction in South Korea’s content industry is also deepening. According to estimates from the Korean Drama Producers Association and the Samil PwC Management Research Institute, the number of domestic dramas broadcast decreased from 141 in 2022 to 123 in 2023 and further to 105 in 2024. Experts are calling for the establishment of a stronger domestic industry foundation. Noh Chang-hee, director of the Digital Industry Policy Research Institute, suggested, “Investments and support measures need to be expanded within South Korea’s content industry. Financial allocations for culture should be increased, and tax incentives for video content must be made permanent.” Jo Young-shin, a media industry consultant, emphasized the need for domestic platforms to serve as strategic alternatives in negotiations between creators and Netflix, stressing the importance of promoting mergers among local platforms and preventing a monopoly by a single company.