The Evolving Landscape of South Korea’s Entertainment Industry

South Korea’s cultural influence is at an all-time high, with global phenomena like BTS leading music charts, the Oscar-winning film Parasite redefining cinema, and Korean dramas capturing audiences worldwide. In 2024, cultural exports soared to a remarkable $15.18 billion, establishing the nation as a cultural powerhouse. However, within South Korea, its two most iconic industries—cinema and K-pop—are confronting significant shifts that may threaten their foundational creativity and longevity.

The Cinema Crisis

South Korea’s film industry is experiencing a sharp decline. Since 2019, total admissions for both domestic and international films have plummeted by 45%, dropping from approximately 226 million to just 123 million. Correspondingly, box office revenue has decreased from $1.3 billion to $812 million. This downturn is prompting distributors who previously released over 40 local films annually to forecast only about 20 for 2025, with warnings of an even bleaker outlook for 2026 as pandemic-generated backlogs diminish without sufficient new productions.

Kim Han-min, renowned for his work on the Yi Sun-sin trilogy, starkly indicated that the film sector is on the brink of collapse during a recent discussion with lawmakers. Meanwhile, Jason Bechervaise, a Korean film professor, notes that the industry’s troubles stem not just from a temporary downturn but from deeper structural weaknesses. He points out that a lack of mid-budget films, which are crucial for nurturing new filmmakers and experimental projects, is redirecting talent toward streaming platforms where financial support appears more stable and production timelines more predictable.

The reduction in the “holdback window”—the duration between a film’s theatrical release and its availability on streaming—has left many potential viewers with little incentive to buy tickets. This trend has led to unprecedented consolidation in the cinema space, as major chains like Lotte Cinema and Megabox plan to merge their operations.

Despite cinemas investing heavily in innovative formats such as Imax and Dolby, industry experts caution that without a steady stream of homegrown films, these upgrades alone cannot ensure a sustained revival.

K-pop’s Challenging Future

Film isn’t the only sector in turmoil; K-pop, once celebrated as a hallmark of South Korea’s cultural exports, is also facing uncertainty. In 2024, physical album sales saw a notable decline of 19.5%—the first drop in a decade—as sales fell from 115.2 million to 92.7 million, and projections indicate a continued downturn.

Nevertheless, major K-pop agencies have adapted by turning to global concert tours, which have now overtaken traditional album sales in revenue. Areum Jeong, a Korean studies professor, emphasizes that companies are increasingly catering to their most dedicated fans, prioritizing specific market segments over broader appeal. This shift in focus influences how talent is recruited and marketed, leading to a model that is now being mirrored by industries outside of Korea. However, it raises the question of whether this approach can produce new global sensations comparable to BTS or Blackpink.

Meanwhile, smaller agencies, once critical for diversity within K-pop, are struggling amid rising costs and a diminishing slice of fan spending. Interestingly, the worldwide success of Korean artistry doesn’t automatically translate into profits for domestic companies. Notably, productions influenced by Korean culture, like the Netflix animated feature KPop Demon Hunters, demonstrate how these cultural trends can spread internationally, sometimes without direct involvement from Korean creators.

As cultural concepts become more easily transferable, competition has intensified. Audiences, however, still demonstrate a strong desire for authentic interactions with Korean culture. Post-release of KPop Demon Hunters, various sectors—like museums and food brands—reported a surge in interest for products showcased in the film.

Bechervaise points out a vital shift: as local productions grow more predictable, global studios and creators of Korean descent are drawing on Korean cultural references for their projects, indicating a role reversal where Hollywood might now steer the narrative in ways unexpected.

Future Investments and Concerns

In response to these challenges, the South Korean government announced an expansive five-year plan involving a 51.4 trillion won investment to enhance the country’s cultural reach. This initiative aims to fortify sectors ranging from content creation to arts education and tourism.

President Lee Jae Myung has appointed JYP Entertainment’s founder to co-chair a new cultural committee aimed at promoting Korean pop culture globally. Major agencies like HYBE and SM Entertainment are expanding into Southeast Asia, India, and China, yet critics note that this overseas focus may detract from nurturing the domestic infrastructure that originally fueled South Korea’s meteoric rise in the cultural sphere. Jeong warns that while these industries may continue to thrive financially, true creative renewal may be elusive. She concludes that the entertainment sector will undoubtedly continue to prosper, but it may find it increasingly difficult to replicate the widespread appeal of cultural phenomena that captured hearts and minds around the world.