Deepening “Decoupling” in K-Hallu Industry Amid Global Success of KPop Demon Hunters...Meager Profits for Korean Producers

The global success of *KPop Demon Hunters* has ushered in the era of K-Hallu 4.0, yet a pronounced “decoupling” phenomenon is underway, resulting in minimal direct benefits for Korean producers and platforms. According to Netflix, *KPop Demon Hunters* has accumulated 314.2 million views. From an industrial perspective, however, this series is entirely American content. Sony Pictures Animation handled production, while Netflix took charge of distribution and investment. Publicly available data shows the production cost was approximately $100 million (about 139 billion won). Sony Pictures, which only provided investment, earned roughly $20 million (about 27.8 billion won), whereas Netflix, which bore all the investment costs to secure the intellectual property rights, expects future utilization value of over $1 billion (about 1,390 billion won). K-Hallu has evolved through stages: the first phase in the early 2000s focused on exports, the second phase expanded markets through foreign idol members or collaborations with local companies, and the third phase involved establishing joint ventures overseas. Now, K-Hallu 4.0 has truly begun, a stage where not only investment capital but also production entities are localized. Notable examples include the global girl group *KATSEYE*, a joint venture between K-pop agency HYBE and American Geffen Records, and the music competition series *KPOP D* produced under Apple TV+. The problem lies in the worsening downturn of Korea’s domestic content industry ecosystem. Data from album tracking site Circle Chart shows that sales of the top 400 physical albums in the first half of this year dropped by 9% to 42.48 million units compared to the same period last year. Sales have declined for two consecutive years after reaching a peak of 55 million units in 2023. A music data journalist noted that “the more local production and distribution become active, the lower album sales remain, which are key to K-pop fan economy profits.” The environment for producing K-content is also deteriorating. According to data from the Korean Drama Producers Association and the Samil PwC Management Institute, the number of domestic dramas broadcast has declined from 141 in 2022 to 123 in 2023 and further to 105 in 2024. While Netflix releases 25 to 28 titles annually, CJ ENM, which owns Tving and tvN, reduced its output from 28 to 18 titles, and traditional broadcasters also drastically cut production from double digits to single digits. Experts are proposing structural solutions. A music critic suggested, “K-pop has already seen its creative earnings split due to collaborations with foreign composers. Introducing new copyright categories for choreography, where Korean creators hold strengths, could also help increase their share of royalties.” The director of the Digital Industry Policy Research Institute argued that “expanding investment and providing support for Korea’s content industry are necessary. Increasing funding for cultural sectors and making tax credits for video content permanent are also required.” A media industry consultant emphasized the importance of revitalizing domestic platforms. He stated, “Domestic local platforms must serve as strategic alternatives in negotiations between creators and Netflix. A structure that prevents dominance by a single company is needed.”