"Return" Policy Needed for Companies Benefiting from Hallyu Content... to Strengthen Overseas Activities in K-Beauty and Tourism

There is a call for a “return” policy that would direct the benefits gained indirectly or directly by foreign companies from Hallyu content back into creative industries. Hong Seok-kyung, director of the Hallyu Research Center at Seoul National University’s Asia Research Institute, wrote in a recent column that while Hallyu content, which began with dramas and music, has created ripple effects across a wide range of industries such as tourism, aviation, platforms, beauty, and food, there are concerns about whether this success can be sustained.

The content industry, which is centered around Hallyu, faces structural crises including a decline in the number of productions, a shortage of talent, and the collapse of small production companies. The core issue is that although industries benefiting from Hallyu have increased, there is almost no institutionalized mechanism for those profits to flow back into content production conditions. Benefits have spread, but reinvestment relies solely on voluntarism.

Director Hong explained that “return” refers to a mechanism that channels part of the profits from successful industries back to the areas that were the source of that success, emphasizing that concepts familiar from environmental fields such as internalizing carbon costs or financial regulations can be fully applied to the cultural industry as well. For example, France mandates that television channels allocate airtime, promote, and invest in domestic films, while Canada and European countries require platforms to reinvest a portion of their domestic revenues back into local content.

Netflix serves as a clear example of this. Although Netflix made substantial investments in Korean content, boosting the global profile of Korean dramas, it simultaneously accelerated structural changes such as soaring production costs, reduced broadcast slots, a sharp decline in drama production, and a concentration of IP on platforms. Critics argue that while capital is poured into individual projects, sufficient resources do not flow toward foundational areas like talent development, the survival of small production companies, and long-term IP accumulation.

To address this issue, Director Hong focuses on establishing a “Hallyu Fund” (provisional name). If tourism products, aviation and accommodation packages, K-beauty and K-food marketing, and platform advertising revenues—all of which generate sales through Hallyu content—depend on content as their common source, then encouraging or mandating that these companies reinvest a portion into content talent, IP development, and financing for small production firms could be interpreted as rebalancing the value chain.

The approach matters greatly. Instead of imposing uniform burdens on all companies, it is suggested to offer choices between direct investment and fund contributions, along with structures that reduce tax burdens for those who contribute to keeping IP domestically or protecting talent.

Meanwhile, the Korea Cosmetics Industry Research Institute is actively promoting K-beauty activities at overseas Hallyu expos starting in 2026. These events will feature K-beauty experiences and promotions in locations such as the United States (LA), France, and Mexico, supporting one-on-one business matching between cosmetics companies and local buyers. The institute reported that last year, through online and offline consultation sessions for foreign buyers, it secured 19 MOUs and export contracts worth 3.2 million dollars (approximately 4.4 billion won).

Experts stress the importance of approaches tailored to local market characteristics. Yu Jung-hee, a food designer at French K-mart, noted that “thorough research into local markets is necessary first to ensure compliance with requirements such as ingredient names, composition, allergy labeling, and packaging.” This means that for the sustainable success of Hallyu, strategies that reflect local regulations and consumption patterns are essential beyond simple product sales.