A Cultural Empire at the Crossroads
South Korean entertainment appears unshakeable on the global stage. BTS conquered international charts, Parasite swept the Oscars in 2020, and Korean dramas dominate Netflix viewing hours worldwide. Cultural exports hit a record $15.18bn in 2024, cementing the nations reputation as a cultural superpower. Yet beneath this glittering success story, two pillars of the Korean Wave face fundamental transformation. Cinema and K-pop, the industries that built South Koreas soft power empire, now confront challenges that threaten to undermine the creative foundations of their achievements. The crisis stems not from declining international interest, but from structural shifts at home that may reshape how Korean culture reaches global audiences.
The warning signs come from unexpected places. Government statistics paint one picture, but industry insiders tell another story of declining attendance, falling album sales, and a creative pipeline under pressure. These developments raise questions about whether South Korea can sustain its cultural dominance through the next decade while maintaining the authenticity and innovation that first captivated the world.
The Collapse of Korean Cinema
Korean cinema faces its most severe crisis in decades. Admissions for both Korean and international films have plummeted 45% since 2019, dropping from 226 million to just 123 million. Box office revenue fell from $1.3bn to $812m over the same period, creating financial pressure throughout the industry. Investment has slowed sharply as distributors retreat from risk. Korean distributors that once released more than 40 locally produced films annually now expect to release only 20 in 2025, with warnings that 2026 could prove even more difficult as the pandemic-era production backlog exhausts itself.
The crisis prompted dramatic statements from industry veterans. Kim Han-min, director of the Yi Sun-sin trilogy, delivered a stark assessment when he told lawmakers last year that the sector had
almost collapsed
. This blunt language reflects deep concern about the structural viability of Korean filmmaking under current conditions.
Jason Bechervaise, a professor of Korean film at Hanyang University, identifies deeper structural issues rather than temporary setbacks.
Years of tightening margins and rising costs have thinned out the mid-budget productions where new directors once developed and established film-makers experimented,
he explains.
Much of the talent pipeline is now moving toward streaming platforms, where investment is steadier and production schedules more predictable.
This migration of talent and capital toward streaming creates a vicious cycle for traditional cinema. As theatrical audiences shrink, distributors become more risk-averse, producing fewer films that give audiences reasons to visit theaters. The
holdback window
—the period between cinema release and streaming availability—has shortened to just a few weeks for many titles, reducing the incentive for moviegoers to purchase tickets. Industry consolidation has already begun, with operators of the Lotte Cinema and Megabox chains planning to merge their 1,682 screens to survive in a contracting market.
Cinemas are investing heavily in premium formats such as Imax and Dolby to enhance the theatrical experience. However, without a reliable flow of compelling domestic films, insiders say such upgrades cannot deliver sustained recovery. The 30th Busan International Film Festival in 2025 highlighted these challenges, with box office figures showing substantial drops and industry leaders openly discussing solutions while noting the absence of domestic blockbusters.
The Streaming Paradox
Global streaming platforms appear both savior and threat to Korean cinema. Netflix and other services have invested billions in Korean content, producing internationally successful series and films that raised the global profile of Korean storytelling. Yet many professionals view this relationship as double-edged. Streaming platforms often prioritize global appeal over local specificity, pushing creators toward formulas that travel well internationally. This expands reach but limits artistic freedom and weakens Korea’s once-thriving cinema culture.
The streaming dominance began partly in response to geopolitical crisis. For years, Korean drama financing operated on an informal
one-third rule
where production houses depended on domestic broadcast fees, product placements, and crucially, international presales to Japan. That system collapsed in 2012 when diplomatic tensions over territorial disputes led Japanese entities to halt Korean content purchases, driving numerous production companies into bankruptcy.
Chinese streaming platforms stepped into the vacuum but acquired content at severely undervalued rates. The drama
My Love from the Star
reportedly sold for $600,000 despite generating more than $100 million in revenue for Chinese platforms. This 166-fold revenue multiplier demonstrated how Korean creativity produced world-class hits while bleeding capital. Netflix arrived in 2016 with a different model, offering stable, massive foreign capital divorced from regional political risks.
The Netflix intervention fundamentally changed production economics. Before the streaming era, an average K-drama episode cost between $250,000 and $330,000. Under the Netflix model, high-end originals now cost between $1.7 million and $2.4 million per episode. In April 2023, following a meeting between co-CEO Ted Sarandos and South Korean President Yoon Suk Yeol, Netflix announced a $2.5 billion investment in Korean content over four years, double what it had spent in South Korea since 2016.
This investment rescued the industry from financial collapse but created new dependencies. By 2022, 60% of Netflix’s 221 million subscribers had watched a Korean program in the previous year, and Korean content accounted for 8-9% of total viewing hours, surpassing content from the UK and Japan. However, researchers note that production for many big-budget series is now
unfeasible without Netflix’s investment,
giving the platform immense leverage over intellectual property rights and creative control.
K-Pop’s Shifting Landscape
K-pop, long considered South Korea’s strongest cultural export, also enters a period of uncertainty. Physical album sales fell 19.5% in 2024, the first decline in a decade, dropping from 115.2 million units to 92.7 million. Projections suggest this decline will continue through 2025. This statistic includes international releases, though few make significant inroads into Korean charts, indicating challenges in both domestic and international markets.
The music industry has pivoted to compensate. Major agencies have found salvation in concert revenues, which now surge past traditional album sales as companies prioritize global touring. This shift reflects deeper changes in how K-pop operates. Areum Jeong, a professor of Korean studies at Arizona State University, observes that companies have increasingly focused on their most dedicated fans.
K-pop companies began catering mainly to the core fandom, and kind of forwent the idea of being widely known to the public,
Jeong says.
When companies cater to the core fandom’s needs, the core fandom will spend and support.
This narrow focus influences how idols are recruited, trained, and marketed. The superfan-centered model has spread beyond Korea, with industries in other countries copying the approach. Yet questions remain whether this strategy can produce the kind of breakthrough global phenomena that defined K-pop’s golden era, such as BTS or Blackpink. Smaller agencies, once vital for experimentation and diversity, struggle to survive as rising production costs and shrinking fan share squeeze their margins.
Recent market performance reveals the strain. Solo albums by Blackpink members Jennie and Lisa each debuted at number seven on the US album chart before dropping out of the Top 10 after one week. Neither album produced a single that peaked higher than number 68. Relative newcomers like Tomorrow X Together, Ateez, and Twice achieved solid first-week chart positions through strong physical album sales before facing precipitous drop-offs.
Domestic Disconnection
Even within South Korea, the genre faces headwinds. Sarah, host of the Idol Cast podcast, notes that
K-pop has lost a lot of market traction in South Korea—the music is not being written to appeal to a Korean audience, but more to this homogenized, globalised audience.
She argues that
it’s trying to be all things to all people, and ends up being sort of nothing to no one.
This homogenization stems partly from language shifts. K-pop increasingly incorporates English lyrics following the success of BTS’s
Dynamite
as an all-English song. While this aids international appeal, it alienates Korean listeners. Innovative acts like Le Sserafim and Aespa, lacking the forceful marketing push that BTS and Blackpink received, have struggled to find footing in the US market despite their musical merits.
The genre has also become more isolated from broader Korean culture. Sarah points out that
you’re not seeing idols in TV dramas or variety shows; a lot of content is moving on to gated [online] platforms like Weverse.
This siloing reduces mainstream exposure while concentrating engagement among existing fans rather than attracting new audiences.
Demographic shifts in fandom compound these challenges. The audience has aged significantly, with many older women entering fandom spaces. While valid as a market segment, this demographic change alienates younger would-be fans who might otherwise discover K-pop. Meanwhile, the Korean charts now fill with J-pop acts, Korean rap, and
2D idols
like Plave, a virtual boyband, signaling shifting domestic tastes.
The absence of new hits becomes apparent in streaming data. A 2015 hit by boyband BigBang,
Bang Bang Bang
,
has consistently been one of the most-streamed K-pop songs globally over the past months, which is not great for K-pop,
Sarah notes.
Where are the new songs?
The De-Territorialization of Korean Culture
A paradox emerges as Korean culture reaches unprecedented global influence: success no longer guarantees that Korean companies will profit. Netflix’s animated hit
KPop Demon Hunters
became the platform’s most-watched animated film, but it represented an American production based on Korean aesthetics rather than an authentic Korean product. The film was co-directed by the Korean-Canadian Maggie Kang and featured Korean voice actors, yet its profits flowed to American companies.
Jeong describes this phenomenon as a
de-territorialised, hybrid idea of K-pop [rather] than an authentic K-pop product
. Korean cultural concepts have become portable enough to be reproduced internationally without Korean participation. Similar groups trained in Korean methods now emerge in Japan and Southeast Asia, creating direct competition for Korean companies.
Bechervaise observes how creative dynamics have shifted. As domestic productions became more formulaic, American studios and Korean-diaspora creators began drawing on Korean cultural elements in works such as
Minari
,
Beef
and
Demon Hunters
.
Korea had beaten Hollywood at its own game,
he says,
but now it’s as though Hollywood’s beating Korea at its own game.
This trend extends beyond entertainment. The global success of Korean ideas creates opportunities for foreign companies to extract value without benefiting Korean creators. Yet audiences still seek authentic encounters with Korean culture. After
KPop Demon Hunters
released, museums, food brands, and cosmetics companies experienced renewed interest in items featured onscreen. This suggests that while Korean aesthetics have global appeal, audiences still value connection to actual Korean culture.
Government Response and Strategic Challenges
The South Korean government has responded with ambitious initiatives. A sweeping five-year plan allocates 51.4tn won (£26bn) for cultural investment, aimed at expanding South Korea’s global cultural footprint and strengthening broader cultural industries. The strategy encompasses content exports, arts training, tourism, and sports. President Lee Jae Myung appointed JYP Entertainment founder and K-pop mogul Park Jin-young to co-chair a new presidential cultural committee promoting Korean pop culture internationally.
Major agencies like HYBE and SM Entertainment are opening subsidiaries in Southeast Asia, India, and China to capture growth in emerging markets. These expansions follow the pattern of Korean chaebols—family-run conglomerates that brought expertise from manufacturing appliances and cars into the entertainment sector. CJ Group, originally a food company, became a founding investor in Steven Spielberg’s DreamWorks SKG in the 1990s to gain distribution rights for Asian countries. Today, CJ ENM ranks among Korea’s biggest entertainment companies.
Critics argue that the focus on overseas expansion risks overlooking domestic infrastructure that once powered South Korea’s cultural ascent. There are concerns that chasing global markets may erode the cultural authenticity that originally attracted international audiences. Jeong believes the industries will continue earning money but warns that financial success alone cannot guarantee creative renewal.
The Korean entertainment industry will continue to profit this way,
she says,
but I think it will be difficult to create something like KPop Demon Hunters that has won over so many people worldwide.
The Human Cost
Behind the statistics and business strategies, human costs mount. The K-pop system relies on intense training, heavy investment, and constant output. Rising production costs, international touring expenses, and pressure to deliver viral hits have pushed entertainment companies into risky financial territory. Smaller agencies struggle to survive, while even major labels face shrinking profit margins.
Burnout affects actors, idols, dancers, and behind-the-scenes workers who face exhausting schedules and uncertain job security. Mental health concerns, already sensitive in South Korea, become harder to ignore as competition intensifies. Performers operate under immense pressure to succeed quickly or risk replacement, raising questions about sustainability—financially, emotionally, and creatively.
The recent controversy involving NewJeans highlights these tensions. The critically acclaimed group, once considered K-pop’s strongest hope in the US after Blackpink and BTS, became bogged down by legal battles with management. The group attempted to terminate their contract with Ador, the Hybe subsidiary that formed them, alleging mismanagement. Ador subsequently sued NewJeans, though the label later stated they
regret the escalation of this matter to court and believe that most claims advanced by NewJeans members thus far have arisen from misunderstandings
.
Member Danielle revealed troubling conditions during her trainee period, describing constant surveillance and requiring management approval for all meals. A coalition of trade bodies warned in February that the dispute could
collapse
the K-pop industry. The group continues acting as whistleblowers about worker rights in an industry where stars have been legally denied worker status. A South Korean court recently ruled in favor of Ador, granting a preliminary injunction that stops NewJeans from working outside their contract until the main lawsuit hearing.
Broader Structural Challenges
The entertainment crisis reflects deeper national challenges. South Korea faces a dramatically slowing economy, rapidly aging population, critically low birth rate, and complex geopolitical landscape. Projections indicate substantial slowdown in economic growth, with average annual rates expected to dip significantly in coming decades. Deep political divisions and legislative gridlock pose additional domestic hurdles.
The demographic crisis affects every industry, including entertainment. A shrinking youth population means fewer potential performers and a smaller domestic market for youth-oriented content. The military, facing manpower shortages due to declining birth rates, competes with entertainment companies for young talent, as military service remains mandatory for most men.
Geopolitically, South Korea navigates North Korea’s nuclear ambitions, China’s assertive military posture, and US-China technological rivalries. Cultural exports provide soft power that opens doors for diplomatic and economic initiatives, fostering goodwill and creating more receptive environments for Korean interests abroad. However, maintaining this advantage requires constant innovation and adaptation.
The nation consistently invests heavily in research and development, positioning itself as a leader in AI, quantum computing, and advanced technologies. Defense industry exports have surged, catering to global demand. Yet cultural industries require different types of investment and support mechanisms than technology or manufacturing sectors.
The origins of Hallyu—the Korean Wave—trace back to specific policy choices made during crises. The Asian financial crisis of 1997-98 forced restructuring of Korean chaebols, which opened market opportunities for smaller players. President Kim Dae-Jung pushed for information technology and popular culture as key drivers for future Korea. The government lifted bans on foreign travel for Koreans, censorship laws were struck down, and infrastructure investment created the foundation for cultural exports.
These historical lessons suggest that crisis can spur transformation, but only with deliberate policy choices. The current challenges may force South Korea to reinvent its cultural industries once again, balancing global ambitions with domestic sustainability.
Path Forward for Cultural Sustainability
The entertainment industry stands at a crossroads, facing fundamental choices about future direction. South Korea must decide whether cultural output should be driven solely by algorithms and global trends, or whether it values long-term creative ecosystems that nurture authentic innovation.
Lessons from other countries offer perspectives. The Canadian entertainment industry faces similar challenges with globalization, as about half its TV and film industry caters to American productions. Canadian experts note that South Korea succeeded by making content for Korean audiences that reflected their own lives, then exporting successful domestic products. This approach contrasts with Canadian strategies that often hide Canadian identity to appeal to broader markets.
Infrastructure investment distinguishes the Korean approach. Rather than funding individual projects, the South Korean government invests in sector-wide infrastructure like Digital Media City in Seoul, which houses tech and media companies. The K-Content Strategic Fund, worth $400 million, pools investments from private companies including studios and banks, backed by government guarantees to leverage capital markets for global expansion.
The intense work culture that powered K-pop’s rise also faces scrutiny. Koreans work some of the longest hours in the developed world, a reality reflected in the idol training system. This method produced global superstars but raises questions about human sustainability. International markets may resist replicating such intensive systems, suggesting that Korean entertainment may need to evolve its production methods.
Industry observers suggest several priorities for sustainable growth. Strengthening mid-budget film production could rebuild the talent pipeline that new directors need to develop. Diversifying revenue streams beyond touring could reduce pressure on K-pop groups. Expanding support for independent creators might counterbalance corporate consolidation. Protecting intellectual property rights in streaming deals could ensure Korean creators capture value from their work.
Most importantly, maintaining the connection between Korean culture and global audiences requires preserving authenticity while embracing innovation. The Korean Wave succeeded not because it mimicked Western formulas, but because it offered distinct perspectives and storytelling approaches that resonated universally. This balance between specificity and universality may prove crucial for future success.
The Essentials
- Korean cinema admissions dropped 45% since 2019, with box office revenue falling from $1.3bn to $812m
- Distributors expect to release only 20 Korean films in 2025, down from more than 40 in previous years
- K-pop physical album sales fell 19.5% in 2024, the first decline in a decade
- Netflix committed $2.5 billion to Korean content over four years, fundamentally changing production economics
- The South Korean government announced a 51.4tn won cultural investment plan over five years
- Korean cultural exports hit a record $15.18bn in 2024 despite domestic challenges
- The
holdback window
between cinema and streaming releases has shortened to just weeks for many titles
- Lotte Cinema and Megabox chains plan to merge their 1,682 screens amid industry consolidation
- Streaming platforms account for 8-9% of total Netflix viewing hours, surpassing UK and Japanese content
- NewJeans legal battle with management highlights worker rights issues in the idol system
