Send a Love Letter to China if you want to thank someone for BTS making a major drive in the United State’s market.
The decision to install the Terminal High Altitude Area Defense (THAAD) missile system on the Korean peninsula was a major point of contention between Korea and China. Korea, with the aid of the United States (U.S.), believed that the deployment of THAAD was an appropriate safety measure against an increasingly bold North Korea. On the other hand, Chinese official strongly objected to the planned deployment. It believed that it would enable a high-level of military surveillance that would compromise Chinese and Russian security. Tensions in the political sphere thickened between China, Korea, and the U.S as politicians continued to contended over THAAD. At the same time, China also took action to demonstrate vexation by subverting Korea economically.
The Hallyu Ban
During the second half of 2016 China impose a ban on Korean popular culture products. As The Telegraph pointed out, “K-pop and K-dramas are hugely popular in China, but their success in the Chinese market also puts them at risk of economic exploitation during political crises”. China has been a lucrative market for Korean entertainment companies for about the past decade. Accordingly, Korean companies have worked on business ventures with the Chinese market in mind. SM Entertainment formed the EXO and Super Junior sub-units, EXO-m and Super Junior-m, specifically to appeal to Chinese audiences.
The imposed sanction on Korean popular cultural products dealt a huge blow to stars and companies dependent on Chinese market profits. With the ban mainly targeting music, film, television, and radio Korean entertainment company stocks dropped an average of 40%. Due to the ban, groups such as EXO had no choice but to cancel scheduled performances. Moreover, according to an article published by the Korea Economic Institute of America, ” there is no k-drama scheduled to be on air on any of the four major broadcasting companies in China.”
This ban left companies to pander to different markets to make up for the loss of the Chinese market.
“Gold! Gold! Gold from the American River!” – Samuel Brannan, 1848
BTS turned its gaze from China to the rest of the world. This past week has been a huge one for the popular boy group. They appeared on the Los Angeles morning news, stopped by Jimmy Kimmel and Ellen Degeneres, and performed at the American Music Awards. Granted, this was not the group’s first time in the U.S. In fact, BTS was in the U.S earlier this year for its sold out “Wings” tour. However, it was BTS’ first time being introduced to a mass American audience that had not heard about k-pop before.
China’s Loss and Differences of the U.S. Music Market
This was all possible because of the Chinese ban. If the ban had not been in place BTS would have likely invested in the Chinese market. As mentioned earlier, the Chinese market is lucrative for Korean entertainment companies. This is because of relatively low investment costs that produce high returns. Conversely, it is costly to bring a group to the U.S. to do promotional activities and performances. Furthermore, the music market in China is similar to Korea in that,”Chinese fandoms (sic) spend a lot of money buying thousand of albums, Korean artists attend public broadcast… Korean artists attend variety shows in China (and they go to top variety shows)..” as one OneHallyu user explained.
The U.S. entertainment market is vastly different from East Asia’s, and this is especially true for the music market. Americans don’t buy physical albums nor are there variety show or music show like the ones found in Korea and China that guest can feature on. Distribution partnerships will most likely only benefit hardcore fans who already purchase the group’s albums. These negative aspects of entering the U.S. market have always made other companies turn to China and Japan. However, the U.S. has the largest music industry in the world. No matter the cost or challenges of this past week, BTS’ exposure through U.S. media is irreplaceable.
Fans can expect more public appearances of the boy group on U.S. national television and more collaborations with western artists. While BTS will most likely make a push into the Chinese market now that the THAAD issue has been resolved, it will not be as beneficial for the group or company now that they breaking into the U.S. market.
The views expressed here are the authors’ alone.