Hyunjoon Shinas a singer-cum-dancer, but also as an actor in film and drama, TV talk show host, radio DJ, and
salesperson in ads. It looks as though a one-source multi-use, a popular concept in managerial
sciences, has been invented just for K-pop idols.
In the official discourses on Korean cultural industries, an idol is defined as “content,” which
is turned into capital through the logic of one-source multi-use in the emerging ecology of the
digital economy. Not just for the music industry, but for all sectors of Korean cultural industries,
the term “content industry” has much wider currency than, say, “creative industry.” If Britpop
is the outcome of the creative industries in 1990s’ UK, then K-pop is the outcome of those
content industries in 2000s’ ROK (Republic of Korea).
Korean entertainment companies are thus scrambling to produce entertainment contents
beyond recorded music, but if it is not easy to create one-source multi-use content in the first
place, then how have a few entertainment companies come to mass-produce such one-source
multi-use content? The process is closely associated with the socioeconomic transformation
of Korea after the 1997 Asian financial crisis. The rapid development of the digital economy
with strong governmental support was regarded as a solution to the crisis, and it profoundly
affected music and cultural industries. Although the first generation K-pop idols prospered up
until the early 2000s, their profitability dropped in the following years due to the decline of
TV music show programs. Worse still, the decline of physical sales led to the collapse of the
distribution system.
The Korean response was to develop “the first music industry where digital music sales
overtook physical music sales” (IFPI 2007, 7). The new outlet for the revenue was sought from
the additional “spin-off ” market, which depended heavily on the Internet and mobile platform.
Winners were those who quickly adjusted themselves to the emerging digital economy and
abandoned the old business model based on physical CD sales. Fierce competition in the digi-
tal arena left only three or four companies as the winners that took the risk of cultivating the
idol system. The problem, however, is that the revenue from digital music sales has never been
enough for the traditional music industry to recover from the crisis.
The real winners are the three telecommunications companies (SK Telecom, Korea Telecom,
and LG Telecom) that control the networks and run the Internet and mobile music distri-
bution services (Lee 2009, 493). There have been constant complaints, not only from artists and
performers, but also from entertainment companies, that the big telecoms are taking in more
than 50 percent of total digital music sales. Actually, the total sales revenue from digital music
distribution in 2012 was 622.1 billion KRW (564 million USD), or much bigger than the sales
revenue from music production, which amounted to 387.8 billion KRW (US$352 million)
(MCST 2014, 340–341).^1
Under this circumstance, it is especially notable that the idol system has been closely associated
with the advertisement industry from the start. According to Fortune Korea (August 2011), “the
current advertisement market is structured in this way: if a certain company produces a com-
modity, an entertainment company supplies advertising endorsement.” As major entertainment
companies and ad agencies are tied with one another ever closer, idols are increasingly becoming
the face of various products: Rain for Pepsi Cola, Girls’ Generation for Intel microprocessors, Big
Bang for LG mobile phones, etc. It is a sign that the profit model of the Korean music industry
is transitioning from the B2C (Business to Consumer) to the B2B (Business to Business) model,
relying less on consumer payments than on business transactions (Oh and Park 2012).
According to a study on SM Entertainment, physical CD sales are 18.51 percent and royalties
(digital music sales) are 51.08 percent of the total revenue. Surprisingly, 78 percent of the royalties
come from abroad, accounting for 40.3 percent of the total revenue. The remaining 30.31 percent
comprises “service sales” based on the B2B model (Park and Rhee 2011, 98).^2 In other words,