Billboard executive Silvio Pietroluongo compared the influence of BTS to that of the Beatles. Time named them one of the 100 Most Influential People of the Year in April 2019. They were the first non-English speaking artists to make the Global Artist Charts in 2018 and the first non-English speaking musicians who won the Global Recording Artist of the Year of the International Federation of the Phonographic Industry.
The impact of BTS transcends beyond K-pop. Their legion of passionate fans, which number millions around the world, sees them as one of the truest global representations of Korean popular music and non-Western music who also helped ignite further the cultural phenomenon called the Korean Wave. Furthermore, as far as business and economics are concerned, this group is a massive brand that is worth billions of dollars.
Nevertheless, beyond their music and stardom, one of the most significant impacts of BTS is their specific contribution to the economy of South Korea. Several commentaries and even studies have been conducted to assess how much this group has brought into their home country. The opinions and conclusions are impressive because the estimated economic value of BTS is comparable to household brands from multinational companies.
From K-Pop Sensation to Economic Mover: Examining the Contribution of BTS to the Economy of South Korea
Celebrities as the Core of the Media and Entertainment Industry
Big-shot celebrities are money-making engines and have become important contributors to economic productivity. For example, in the United States alone, the media and entertainment industry accounted for 6.9 percent of its gross domestic product in 2022 and its market size was valued at USD 717 billion. A dated research from marketers Jagdish Agrawal and Wagner A. Kamakura concluded that the economic worth of celebrity endorsers centers on the positive impact on expected future profits of companies and brands.
Celebrities not only attract public attention to the brands that they endorse but also generate income for themselves and the companies that work with them. Their earnings help sustain and create other occupations and even other components of the media and entertainment industries while their big spendings also support other business activities. It can be argued that pop stars might be considered the most valuable among all classes of celebrities because of the different products offered to their large and established fanbase.
It is also important to note that the rise of billion-dollar music artists is not a new phenomenon. One Direction was regarded as the first group valued at more than a billion dollars while solo acts such as Justin Bieber and Taylor Swift have held their ground as some of the most valuable pop stars in the world. These artists have generated substantial value arising from their record sales, concert tours, endorsements, paid guesting, and official merchandise. The same formula has made BTS one of the most valuable music artists from South Korea.
The media and entertainment industry of South Korea is also as thriving as the United States and the United Kingdom. The Korean Wave is considered a “cultural economy” that has seen the global spread of Korean pop culture, media production, and music. K-pop and K-drama are central to the Korean Wave and have been considered two of the most important cultural exports of South Korea. Estimates suggest that the entire South Korean media and entertainment industry generates multi-billions of earnings each year
Nevertheless, when it comes to K-pop, the specific music industry generates about USD 10 billion a year and its estimated market size is about USD 20 billion. Take note that these estimates only accounted for revenues from record sales, music royalties, commissions from music streaming, and sales of concert tickets. K-pop artists generate revenues from other fronts including endorsements and sales of merchandise. Some of these artists, which include BTS, have the same income-generating power as Western pop stars.
Considering and Marketing the Group as an Established Brand and Business
Pop stars are the most accurate representation of a personal brand. These artists depend on their names and public image to distinguish themselves and capture the essence of their work or the kind of entertainment they provide. Launching and marketing an up-and-coming star involves developing a clear and consistent message, creating a positive reputation, and fostering a strong emotional connection with the target audience. It is important to underscore the fact that this general principle is also applied in marketing goods and services.
Successful pop stars are often associated with specific values, qualities, or attributes that resonate with their fanbase while creating a sense of identity or belonging. BTS has visible and notable values or attributes. The media have considered them perfect role models for young people and even adults. Furthermore, as described by Time Magazine, their fans, collectively called the ARMY and numbering around 40 million members across the world, have an unrivaled level of organization and a demonstrated degree of dedication.
It makes sense to further capitalize on BTS given that it has an established brand and an existing customer base. Take note that the group is under the South Korean music label Big Hit Music. This same label also manages all relevant affairs including music distribution, concert production, contracts for endorsements, guesting or public appearances, public relations, and development and distribution of merchandise, among others. Nevertheless, when considered as a whole, BTS operates as a well-oiled business organization.
The marketing of BTS is impressive. The group has maximized the reach of social media and the impact of content marketing to keep the fans engaged through a consistent online presence on different social media platforms. Storytelling is also part of its marketing. BTS has released materials detailing aspects of their lives and behind-the-scene stories that allow them to become relatable to their target audience and existing fanbase. Digital content, partnerships, and merchandises allow the group to remain visible and relevant.
Each of the seven-member boy band composed of Jin, Suga, J-Hope, RM, Jimin, V, and Jungkook also has individual personal brands. Each has also pursued solo projects that range from recordings and collaborations to brand endorsements and guest appearances. These individual pursuits represent a strategic move to keep the group and the entire brand relevant to the public following the announced scheduled pause in group activities to enable the members to complete their mandatory South Korean enlistment service.
Broader and Specific Impacts of BTS on the Economy of South Korea
There are two important things to highlight when it comes to understanding how BTS contributes to the South Korean economy. The first is that the group is an income-generating brand. This income is derived from the sales of its albums and concert tickets or commissions from music streams, music royalties, fees from endorsement contracts, talent fees from its media and public appearances, sales from merchandise, and licensing fees from its intellectual properties and other brand partnerships or collaborations.
Furthermore, due to its global presence, the second is that the group is also an export of South Korea. This means that BTS helps in generating income for its home country in a manner that is similar to international trade or the importation of homegrown products to other countries. Consider how companies such as Apple generate income for the United States through the sales of their products in the international market. The group specifically generates earnings from its global fanbase and business dealings outside South Korea.
BTS also attracts tourists. The Hyundai Research Institute noted that more than 790000 foreigners visited South Korea each year because of the group. The Korea Tourism Organization has also surveyed and identified the top five locations or tourist destinations associated with the group while the Seoul Metropolitan Government credited the same group with assisting in the recovery of the tourism industry of the South Korean capital city. Nevertheless, in 2022, the national government featured BTS in its tourism promotion.
Estimates on how much BTS brings to the South Korean economy differ. This is understandable considering the complexities of the business model of the group and the challenges in tracking down all direct income-generating activities and offshoots. A study by the Bank of Korea, the central bank of South Korea, concluded in 2021 that the group adds about USD 5 billion each year to the economy. This approximation was derived from direct income-generating activities and several ripple effects that include tourism.
The Hyundai Research Institute also noted that the group brings in an estimated USD 3.4 billion as economic value and another USD 1.26 billion in added value each year. The economic contribution of BTS has been compared with Korean Air, the flag carrier of South Korea, or with 26 medium-sized companies. Hence, considering its impact on the economy, legal debates ensued over whether the members of BTS should be exempt from rendering military service since their absence would result in significant economic loss and opportunity cost.
FURTHER READINGS AND REFERENCES
- Agrawal, J. and Kamakura, W. A. 1995. “The Economic Worth of Celebrity Endorsers: An Event Study Analysis.” Journal of Marketing. DOI: 2307/1252119
- Moon, Kat. 2020. “Inside the BTS ARMY, The Devoted Fandom With an Unrivaled Level of Organization.” Time. Available online