The Globalization of East Asian Pop Music

9-708-479
REV: APRIL 22, 2010
JORDAN SIEGEL
YI KWAN CHU
The Glob
balizatio
on of East
E
Asiian Pop
p Musicc
Intro
oduction
Fo
oreign investo
ors in late 20007 had a lov
ve-hate relatiionship with the East Asiian music market.
m
Foreig
gn record labels and film studios
s
were attracted
a
by the
t sheer sizee of East Asia’’s population (over
1.5 billion people) and enormo
ous market po
otential ($9 trrillion estimated regional GDP).1 But China
C
y rate of 85%
%.2 Even in th
he more deveeloped markeets such as Jaapan, South Korea,
K
had a music piracy
Taiwaan, and Hong
g Kong, piracy
y had cost thee music indusstry at least a quarter of its revenue.
Bu
ut the East Asian
A
music market’s reccent growth and renewed
d profitability
y was exceptional
compared with mo
ost of the rest of the world
d. (See Exhib
bits 1 and 2.)) While global music salees had
been declining forr a decade, th
he East Asian
n market was beginning to
o record healtthy growth. From
2005 to
t 2006, the In
nternational Federation off Phonograph
hic Industry (IFPI)
(
experieenced a 5% deecline
in traade revenue from
f
global sales
s
of recorded music to
o $19.6 billion
n; revenue from physical sales,
mean
nwhile, slump
ped 11% to $17.5
$
billion. But againstt all odds, th
he Chinese, South
S
Korean
n, and
Japan
nese music markets all reccorded growth
h.3 In particu
ular, the Chin
nese market had
h tripled in
n size
from $323 million in 2004 to $1.09 billion in 2006. The Eaast Asian indu
ustry was forrecasted to grrow at
mpound annu
ual growth rate
r
(CAGR)) of 18.5% between 20077 and 2011.4 (For backgrround
a com
inform
mation on thee industry stru
ucture of the Japanese, Ch
hinese, and So
outh Korean music
m
marketts, see
the Appendix.)
Jusst a few yea
ars earlier, sim
milar to the global musicc markets, th
he Japanese and
a
South Korean
K
markeets had been shrinking at double-digit rates due to piracy and illegal Interneet downloadss. But
they were
w
able to rebound in just
j
a few yeears. Subseq
quently, thesee Asian mark
kets were listeed by
Billboaard magazinee as among the 12 “miraclee markets” thaat achieved ov
verall growth
h.
Several interestting trends co
ontributed to this
t
phenomeenal growth of
o the music and
a film mark
kets in
Asia. One was drriven by techn
nological inn
novation. “Diigital cinema” and “digitaal music” werre the
latest buzzwords. In 2003, So
outh Korea was
w the first music
m
markeet where salees of digital music
m
surpaassed those off physical form
mats. Digitall music sales had since sky
yrocketed to become one of the
most important rev
venue sources.
An
nother trend in these Asiian markets was
w the regio
onal joint production of music
m
with multim
counttry teams com
mbining elem
ments of the different
d
cultu
ures, languagees, and art fo
orms. Connecctions
betweeen music com
mpanies from
m China, Hon
ng Kong, Taiw
wan, South Korea,
K
and Jap
pan were gro
owing
strong
ger. Joint ven
ntures that co
ombined Japaanese compan
nies’ marketin
ng and managerial skills, South
S
Koreaan companiess’ expertise in
n technology, and China’s human resou
urces and maarket potentiaal had
mush
hroomed in th
he previous few years. Talent management comp
panies also crossed
c
bordeers to
manaage foreign artists,
a
or to market foreeign artists in local marrkets. In sh
hort, the tren
nd of
______________________
__________________________________________________________________________________________________
Professo
or Jordan Siegel and Research Associaate Yi Kwan Chu prepared
p
this case. HBS
H cases are deveeloped solely as thee basis for class disscussion.
Cases arre not intended to serve
s
as endorsemeents, sources of prim
mary data, or illusttrations of effectivee or ineffective man
nagement.
ght © 2008, 2010 Prresident and Fellow
ws of Harvard Colleege. To order copiies or request perm
mission to reproducce materials, call 1-8800-545Copyrig
7685, wrrite Harvard Busin
ness School Publish
hing, Boston, MA 022163, or go to http:://www.hbsp.harv
vard.edu. No part of this publication
n may be
reprodu
uced, stored in a retrieval system, used in a spread
dsheet, or transmittted in any form or by any mean
ns—electronic, mecchanical,
photoco
opying, recording, or
o otherwise—with
hout the permission
n of Harvard Busin
ness School.
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708-479
The Globalization of East Asian Pop Music
“hybridization” of cultural consumption had emerged. Yet this hybridization was still in its early
stages, and it was an open question as to whether it was a smart strategic decision for companies to
focus resources on hybridization. Moreover, some companies were focusing their hybridization on
the U.S. market, whereas others were openly shunning the Western markets and focusing solely on a
regional strategy within East Asia. Did turning East or turning West make more sense for these
music companies?
Cross-Border Flow of Music and Films: Going East or Going West?
The consumption of domestically-created music and film in East Asia was no longer confined
within country borders. The destinations of these cultural products, as well as the ways they entered
foreign markets, could be completely different.
Examples of Successful Cross-Border Flows
Statistics published by the South Korean Ministry of Culture and Tourism showed that South
Korean music and TV dramas were mostly exported to other Asian countries. Broadly speaking,
Japan was the top export destination for South Korean music, accounting for an overwhelming
majority of South Korean exports (see Exhibit 3). Japanese exports most often went to the United
States, Europe, and some neighboring Asian countries, according to statistics from the Japanese
Ministry of Foreign Affairs. However, Chinese music products rarely flowed outside of their own
home market.
Cultural Proximity One obvious reason for the flow of cultural contents into foreign markets
was that people living in these foreign markets shared similar cultural and historical traditions, and
therefore were able to enjoy one another’s cultural products. Asia could be divided into sub-regions
that were defined by geographic proximity, shared environmental conditions, and the direct
exchange of information and goods.5 East Asia included cultures that had been heavily influenced by
ancient Chinese culture, such as South Korea and Japan. In East Asia, Confucianism, the ancient
Chinese philosophy that had been influential as early as during the Han Dynasty (206BC–9AD), was
the original source of shared traditions.6 Its teachings, from the emphasis of loyalty to ritual
propriety, and from the reverence of education to filial piety, had strong influence politically, socially
and culturally in China, Japan, and South Korea.
Among Confucianism’s other political and cultural influences, Confucian rituals, as expressed in
court etiquette, could be observed in South Korea and Japan. Court music—initially performed by a
Confucian ceremonial orchestra in Chinese royal court—was lost in China but still existed in Japan
and South Korea. Ethnomusicologist Hiromi Lorraine Sakata noted that “the ritual and court music
traditions of both South Korea and Japan [were] based on the Chinese idea that ritual and ceremonial
music must represent harmony in nature.”7 They had similar traditional instruments, such as the
zither, which in Chinese was qin or zheng, in Korean kayagum, in Japanese koto; and the flutes, which
in Chinese was dizi, in Korean taegum, and in Japanese shakuhachi. Moreover, the Japanese noh and
kabuki theater was heavily influenced by Buddhist philosophy, with many references to classic
Chinese poetry.
In particular, Okinawa, the largest of the Ryukyu Islands in Southern Japan, had served as a
stepping stone in introducing Chinese music to Japan. Comprising hundreds of islands on the Pacific
Ocean, Okinawa was formerly known as the Ryukyu Kingdom, which had been paying tribute to
China and the Japanese imperial court throughout much of its history. Sanxian, a Chinese threestring, plucked instrument covered with snake skin, was first introduced to Okinawa and had since
been a main instrument in Okinawan music. That musical instrument was then adopted as sanshin in
2
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The Globalization of East Asian Pop Music
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Okinawa and became an important folk and popular instrument throughout Japan as shamisen.8
Okinawan folk music reflected other Chinese music elements. The musical scales of Okinawa were
different from Japanese scales and closer to that of the Chinese.
Interestingly, Okinawa also served as a stepping stone from Japan to other parts of the world and
has played a significant role in the current Japanese rock music scene. In fact, several famous J-pop
singers, including Namuro Amie, and girl bands Speed and Max, were graduates of Okinawa Actors
School.9 When Okinawa first became an American military base in Pacific Asia after the Second
World War, Okinawan musicians fused local tunes with Western music that were played at the
military base to formulate an Okinawan style that had both Okinawan and Western rhythms,
melodies, and instruments such as the electric guitar and the bass.10 The most influential Okinawan
musician in the contemporary era was Shokichi Kina: he was to Okinawan music what Bob Marley
was to reggae.11 As son of a renowned Okinawan folk singer, Kina had started his own music career
in his teenage years. When he was 16, he wrote “Hai Sai Oji-San” (Hey Man), which would become
one of his most famous songs; and while attending college, he formed his own band, Champloose. In
addition to the traditional sanshin, his band played the Western bass, guitars, and the drums. But
Kina’s music was distinctly local. Music critics said his music was, “in fact, a reaction to the
American military presence in Okinawa, and staked a claim for the locals on an island that had spent
most of its history run by foreigners.”12
For Okinawans, paying tribute to China over the centuries did not bring lasting peace. In the 19th
century, in order to make the Okinawans an integral part of Japan, the Meiji government abolished
the Ryukyu Kingdom and set up Okinawa Prefecture. But during this same time period, China,
Taiwan and Japan each at one time claimed sovereign rights over the islands. After the Second
World War, Okinawa was occupied by the American military forces. It was not until 1972 that the
sovereignty of Okinawa reverted to Japan—although American military bases continued to occupy
about 10% of Okinawa.13 Kina’s music came out soon after this historic moment and it was widely
interpreted as an example of “a young bunch of singers and players who were fed up with the status
quo, and rocked out in protest.”14 Kina’s most popular song is “Hana (Flowers—Bring Flowers to
Everyone’s Hearts),” which became popular across Asia and was covered by numerous foreign
artists.15 Different versions of “Hana“ altogether sold 15 million copies in countries including
Vietnam, the Philippines, Indonesia, Malaysia, Myanmar, South Korea, and Mongolia.16 In fact, Kina
had tremendous natural charisma and a strong political outlook: he opposed the continued U.S.
military presence on Okinawa and was an outspoken advocate of Okinawan independence. In 2004,
he was even elected to the Japanese parliament’s House of Councilors under the Democratic Party
banner.17
The Japanese Idol System In the early 1970s, with more disposable income in hand, young
people started looking for more entertainment options. They began to identify with pop idols who
seemed to lead sophisticated lives. Another reason for the idol phenomenon, according to Steve
McClure, Asia bureau chief of the New York-based music-industry magazine Billboard, was that
“they [reflected] the values of a society that [put] a premium on conformity at the expense of
individuality. Non-threatening, non-controversial role models [were] useful tools in maintaining
social harmony.”18 The pop idol system started to emerge, with wholesome-looking youngsters in
their teens and early twenties dominating the pop music industry. These idols were usually popular
for a season to a few years, and they were usually packaged to become all-around entertainers and
media personalities (tarento) with prominent public profiles during their brief careers.
The pop idol system and J-pop, which combined Western sound and beats and Asian melodies,
soon spread to other Asian countries, where social harmony was similarly emphasized, living
standards were improving, and the young generation was hungry for more entertainment.
Musically, in the 1980s in Hong Kong, the demand for musical entertainment was large but the
3
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The Globalization of East Asian Pop Music
number of songwriters was limited. To meet the growing demand for pop music, the Hong Kong
music industry adopted Japanese melodies and localized them with Chinese lyrics. This genre of pop
songs was very popular because the ballad style of J-pop was familiar to local audiences.19 For
similar reasons, J-pop was also very popular in Taiwan.
Although the influence of Japanese music was prominent in Hong Kong and Taiwan, it was less
so in South Korea and Mainland China. The shared cultural tradition among East Asian countries
was temporarily interrupted at the end of the Second World War, when anti-Japanese sentiment ran
high in both South Korea and China because of Japanese imperialism during the first half of the 20th
century. One of the questions for the music industry in 2007 was whether the timing was now right
to vastly expand the level of musical exchange between Japan, on the one hand, and China and South
Korea on the other.
In the meantime, Mainland China, Hong Kong, Taiwan, and other Mandarin-speaking
communities, such as those in Singapore and Malaysia, had formed a sub-regional niche, and singers
popular in one country—such as Jay Chou (Taiwan), Andy Lau (Hong Kong), and Stephanie Sun
(Singaporean debuted in Taiwan)—would often become popular in the others as well. Moreover,
because Mandarin was a commonly understood language in all of these regions, to fully capture the
market potential, singers usually sang in Mandarin, including the Hong Kong singers who were used
to singing in Cantonese.20 In the film and TV markets, cultural proximity probably played the largest
role in reaching out to neighboring countries as well. South Korean TV dramas were popular in other
Asian societies because they depicted conservative families and the value of love, which were closer
to real life in these societies than, for instance, American dramas.21
Asian Diaspora Another reason for the flow of cultural contents into foreign markets was the
Asian population abroad. (See Exhibit 4.) As immigrants continued to settle all over the world and
travelers worked or traveled overseas, they created niche markets in which familiar sounds and
images from home were desired. Technology also made it easier for expatriates to connect with their
homeland. What used to happen on a neighborhood level was now taking place on a much larger
scale. Besides word-of-mouth in the respective diaspora communities, special TV channels and
websites catering to the Asian diaspora were established to help spread news of popular trends at
home. These included MTV-K for the Korean Americans as well as the website Yes Asia
(www.yesasia.com). Statistics from the Japanese Ministry of Foreign Affairs showed that the United
States had the largest number of Japanese immigrants, either for long stays or for permanent
residency, and had thus been a top export destination for Japanese music and films. But Chinese
films and music were not marketed overseas—despite a large diaspora Chinese population—perhaps
because of the lack of a star management system that had already been established in India, Japan,
and South Korea, and because the overall quality of products from China was still behind that of
other Asian countries.22
But it was hard to pinpoint who was buying films and music abroad, and hence, difficult to
estimate the role that the Asian diaspora played in the consumption of Asian cultural contents.
Indeed, according to ImaginAsian Entertainment—a U.S.-based 24-7 TV network for the Asian
American community—60% of those who watched its Asian channels were not of Asian ethnicity.
Similarly, 70% of the audience of the company’s Manhattan movie theater that showed only Asian
films was non-Asian.23 Some believed that the role of the diaspora was limited. Naoki Sekine,
Japanese music critic and market analyst, believed that the diaspora population was a rather small
niche market.24
Organic Growth Steve McClure, Asia bureau chief of the New York-based music-industry
magazine Billboard, also saw the diaspora market as “not a ready market” because, he argued, music
was consumed based not on race or ethnicity but on taste. Some of the more popular Japanese music
4
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The Globalization of East Asian Pop Music
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in Europe and the U.S. was not the mainstream J-pop but independent music, appealing to fans who
liked specific genres of music.25 An interesting example was the Visual Kei (literally meaning “Visual
Style”)—a genre that emphasized visual effects and that was characterized by the use of outrageous
looks that included striking make-up, eccentric hairstyles, elaborate costumes, and sometimes
androgynous looks. Musically, these performers sang in a variety of styles, from pop to rock to punk.
Their visual presentation tapped strongly into the world of anime and manga, which was how they
were introduced to the West; in Germany, the Financial Times called visual kei bands “living manga”
characters.26 Linguistically, many of these groups used French names and sang in a mixture of
Japanese and English, and occasionally, in German and French. The European slant of visual kei, not
to mention its exotic Eastern influences, helped explain its significant appeal to European
audiences.27 Thus, music and style preferences created niche markets abroad.
Organic growth of a foreign market was possible. In 1963, Kyu Sakamoto’s song Ue Wo Muite
Aruko (I Look Up When I Walk) broke into the U.S. market. The song was re-titled “Sukiyaki,” a
traditional Japanese dish, because it was catchy, recognizably Japanese, and a much more familiar
name to the English-speaking population. Because the song was “an incredibly good tune that had
the power to move people emotionally, no matter what culture they’re from,” but also because it was
a novelty to Americans, “Sukiyaki” was a smash hit. It sold one million copies in the U.S. and topped
Billboard’s singles chart for three weeks—to date, the first and only U.S. hit song sung in Japanese by
an Asian singer.28 In recent years, Pizzicato Five (P5) was one of the few Japanese bands to sell well
overseas. Their 1994 American debut album, Made in USA, had sold more than 100,000 copies. Their
follow-up album in 1995, The Sound of Music by Pizzicato Five, also sold about the same number of
copies.29
Another success story was Osaka-based female pop/punk band Shonen Knife (named after a
Japanese brand of pocket knife) that was formed in 1982. Shonen Knife was never in the mainstream
music scene in Japan, as their style was distinctly different from mainstream J-pop and drew
inspiration from Western bands such as the Ramones, the Ronettes, and the Beatles. They sang in a
mix of Japanese and seemingly wonky English. They also sang about details of daily life—including
topics about food (such as banana chips, sushi, cookies, ice cream, and jellybeans), but also about
small animals—something the mainstream music scene had not picked up. The trios (and now duo)
were amateur musicians. When the band rose to prominence overseas in the early 1990s, they still
had full-time day jobs as office administrative assistants, and before forming the band, none had
known how to play an instrument.
But Shonen Knife received more attention from overseas than they could have ever anticipated.
Such American indie rock bands as Sonic Youth, L7, and Lunachicks covered their songs for a 1989
tribute album.30 Their biggest fan turned out to be Kurt Cobain of Nirvana. In 1992, Nirvana invited
Shonen Knife to play the opening act on the band’s 1992 European tour and later at the U.K.’s famed
Reading Festival.31 When Nirvana broke big, Shonen Knife rode its coattails, and their single “Space
Christmas” went on to top the British indie singles chart. In 1993, the group was the first Japanese act
to sign an international deal. Its best-selling album to date, Rock Animals, sold about 100,000 copies
outside Japan, although sales at home were half of that.32 Since then the band had played all over the
world, including touring the U.S. 10 times—most recently in late 2007. Unfortunately, most of the
early attention was patronizing, in the “so-bad-they’re-good” vein, with an unsettling racist or sexist
undertone.33 But another part of the group’s charm, as the New York Times wrote, “[lay] in the
cultural gap between the records it [emulated] and the music it actually [played],”34 and “the cultural
anomalies that resulted when a foreign band [taught] itself how to play American rock-and-roll with
the innocence of a child reading the fairy tales of the Brothers Grimm.”35
China also recently produced a major international hit. The Twelve Girls Band was a 2001
creation with 12 young women (actually 13 members, with one alternate) who played traditional
5
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The Globalization of East Asian Pop Music
Chinese instruments and both Chinese and Western music, from Chinese folk songs to J-pop to
American Jazz. Members of the group were selected through national auditions from top-notch
Chinese conservatories, and their performances fused traditional instruments with modern
harmonies. While their reception at home was mixed—some thought it was not real Chinese music—
the group was a sensation abroad. In 2003, its first international album, Beautiful Energy, was released
in Japan. It topped the charts for 30 weeks, sold more than two million copies, and won several
prestigious awards. Tickets for its 32-arena tour were sold out in 10 minutes.36 In North America,
the “dozen roses from China,” as Time magazine called them, were very well-received. Their album
Eastern Energy debuted at number one on the Top World Albums, number seven on the Internet Sales
chart, and number 62 on The Billboard 200. The sales figure was over 19,000 units.37
The band’s producers and music critics attributed the group’s success to solid technical virtuosity,
originality, ample investment, and a good marketing and publicity strategy.38 The group received
investment from Platia Entertainment of Japan, whose founder believed the band would be huge in a
market that was saturated with J-pop. Indeed, outside the group’s homeland, its easy-to-listen-to
instrumental style was considered exotic, with just enough Chinese flavors so as not to alienate
foreign listeners. On stage, the 12 musicians, as Time magazine described, “were elegantly draped in
flowing dresses and sporting flight-attendant smiles that never flickered;” and they had a vibrant and
graceful style that was not just to express the music, but also themselves.39
Examples of Failed Cross-Border Flows
But these successes were exceptions. For the most part, mainstream Asian pop had moderate
success in neighboring Asian countries, but failed miserably in the West. (See Exhibits 5 and 6.) An
example was Japan’s top-selling trio Dreams Come True, which broke big in Taiwan in 1996, having
sold 200,000 copies of its album Love Unlimited. But in 1998 the trio’s English-language debut album
in the U.S., unfortunately named Sing or Die, was not charted on Billboard, and it literally “died.”
Seiko Matsuda, an idol-turned pop singer who had a two-decades-long recording career in Japan,
attempted the U.S. market three times, releasing three albums in 1990, 1996, and 2002, respectively.
The 1990 album did not make the charts, although the single “The Right Combination,” a duet with
Donnie Wahlberg of New Kids On The Block, rose to 56th on Billboard’s dance chart. The two albums
released later also did not make the charts.40 Taiwan-based CoCo Lee, who was raised in California
and was a native speaker of English, released albums in 1999, 2005, and 2006. Thanks to the hype of
Ang Lee’s martial arts film Crouching Tiger Hidden Dragon in the U.S., CoCo Lee performed the
nominated theme song “A Love Before Time” at the 73rd Academy Awards and was introduced to the
U.S. mass audience. But her album Just No Other Way still only sold 40,000 copies in the U.S., whereas
sales throughout Asia were half a million copies.41 Her 2005 and 2006 releases also failed and were
not charted on Billboard. In 2004, Utada Hikaru, a pop diva in Japan and throughout East Asia since
2000, made her U.S. debut. Utada was born and raised in New York City, was a native speaker of
English, and both of her parents were in the music industry. Her tunes were unlike the ordinary Jpop and more like R&B. More than 1.3 million copies of her English-language album Exodus were
shipped to the U.S., but the album only sold 40,000 copies and barely made number 160 on The
Billboard 200.42
Potential Reasons for Failure There were various reasons why Asian acts failed in the
Western music market. One obvious reason was the language barrier, but there were others. In
many cases, there was the preconception that Asian pop was not original enough and was merely a
copycat of American pop. CoCo Lee, for instance, was packaged as an Asian Mariah Carey. Utada—
although a smash in East Asia because her R&B style was refreshing to the J-pop market—did not
impress American listeners. Moreover, the music style that was popular in Asia was no longer
popular in the West, making some of these overseas debuts sound old-fashioned.43 Inadequate
6
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The Globalization of East Asian Pop Music
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investment and poor marketing was another reason. Asia itself was a huge market, and for the most
part, the music industry did not feel compelled to promote its products beyond national borders. The
domestic markets accounted for 78% of revenue in China, 75% in Japan, 56% in South Korea, and 91%
in India.44 For instance, Japan was the world’s second-largest music market. It was a fast-paced
market in an isolated island country. Time spent trying to promote an act in the geographically
diverse U.S. market would mean time lost on the all-important domestic market.45 Utada was signed
under the label of Toshiba-EMI, which was reluctant to support her ventures abroad; thus, Utada had
to sign a separate deal with Island Def Jam to release English-language albums in the U.S., while
Utada continued to sing in Japanese under Toshiba-EMI.46 The album flopped most likely because of
a combination of factors: executive changes at Island Def Jam, the fact that it was released in the very
competitive fourth-quarter, and the fact that there were no live performances to promote her album.47
South Korean music since the turn of the century had also become popular at home and
throughout much of East Asia. JYP Entertainment’s Rain was arguably the biggest star since 2003.
Full House, the 2004 TV drama in which he starred, was one of the highest-rated South Korean drama
series and was broadcast throughout East and Southeast Asia, as well as the United States. Dubbed
South Korea’s Justin Timberlake and Usher, Rain received the 2005 MTV Asia Aid Male Performer
Award and performed in sold-out concerts throughout East Asia. One of his albums It’s Raining sold
over one million copies in Asia and topped the charts in December 2005 in Japan, China, Taiwan,
Thailand, Indonesia, and South Korea.48 In 2006 alone, Rain had $20 million in sales in 2006 and had
sold more than three million albums. He was even voted online one of the 100 most influential
people by Time magazine, as well as one of People magazine’s 2007 “Most Beautiful People” in the
world.
Rain’s next destination was the United States. In 2006, he had two sold-out shows in New York
City’s Madison Square Garden, attracting reviews from such Western publications as the New York
Times. The media also reported that Rain was preparing for his English-language debut in fall 2007.
But the hype fell apart in June after the cancellation of several concerts in Shanghai, Toronto, San
Francisco, and Honolulu, with poor sales cited as one reason in Honolulu.49 At the end of the tour,
Rain also ended his five-year contract with JYP Entertainment without a renewal. The plan of a U.S.
debut was subsequently suspended. However, several of South Korea’s biggest stars were also
making their U.S. debut in 2007, including Se7en, YG Entertainment’s R&B singer who had had three
concerts in Washington DC, New York City, and Los Angeles, as well as BoA of SM Entertainment,
who had performed in Sydney, Australia, and in Los Angeles. Reportedly BoA had suspended her
domestic recording activities in order to prepare for a U.S. debut. According to Steve McClure, in
Japan, “Sometimes Japanese acts perform and/or release their music overseas less to make inroads
into foreign markets than to make them look cool to fans in their home market.”50 In the case of the
South Korean case, it was uncertain whether such news was true or mere publicity.
Like critics of other Japanese and Chinese acts to enter the U.S. market, critics of Rain’s
performance in New York City noted that Rain’s use of unrefined English often failed to connect to a
more mature audience. The New York Times scorned Rain’s gesture of standing up between songs
and saying things like, “I’m lonely and I need a girlfriend,” and his tendency to shout “I love you”
when he was at a loss for other words.51 Amidst South Korean singers’ new interest in breaking into
the U.S., music critics stated that in the end, the West expected originality—i.e., that performers be
true to their own sound. The fact that current Korean stars seemed to have mastered seemingly
Western R&B, hip hop, and rap was, according to these critics, not appealing enough to the West.52
7
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The Globalization of East Asian Pop Music
Cross-Border Partnerships
Because of the above-noted challenges, Asian music companies were increasingly forming
partnerships and cooperating to tap into each other’s markets. Partnership initiatives were both
project-based and company-based, and sometimes their strategies could be completely divergent.
The major distinction, however, was whether to focus on Asia, i.e., regionalization, or go westward,
i.e., globalization. Some of the most notable examples are described below.
Regional Partnerships in Asia
Avex Group Holdings
Founded in 1988, Avex was initially a wholesaler of imported records.
Thanks to the popularity of dance music in Japan, Avex gradually became a household name in
Japan. In the 1990s, some Avex-affiliated singers gained explosive popularity in Japan, including
TRF, Namie Amuro, and Ayumi Hamasaki (Ayu)—with Ayu alone accounting for roughly 10% of
the company’s total revenue.53 By the early 2000s, Avex had become an important player in the
Japanese music market as well as the world’s largest independent record label. The company had
also set up subsidiaries in Taiwan, Hong Kong, as well as in the U.S. and U.K. In addition to
recording albums, Avex trained its own artists, published visual and audio contents, and managed its
own concert and merchandising businesses. In 2007, the company‘s annual sales reached $869
million, and its market value as of January 2008 reached $535.3 million.54
In terms of foreign operations, Avex had previously explored the U.S. and European markets by
setting up branch offices in 1993 and 1994. But in 2007, the company finally decided to close the New
York and London operations because it believed it was hard for Asian singers to break through
cultural barriers in Western countries. 55 On the other hand, demand for music in Asia was
continuously growing. Buddy Marini, managing director of Avex Asia, believed that Asia was going
to become a “big pie.” He noted, “We have developed an Asian strategy to identify quality artists
within Asia and to build a business platform for the entire region…our plan is to become a major
player in Asia for artist management and to compete with those in Europe.”56
In 2006, Avex announced its expansion strategy in East Asia, targeting primarily China. “It’s
highly possible that the entire East Asian area shares the same values in terms of entertainment,” said
Takashi Araki, senior executive director of Avex, “and we want to move our focus to that market as a
whole. This shift to China is our big strategy at the moment.”57 The company set up a joint venture
with a Beijing-based talent agency, Chengtian Entertainment.58 But Avex’s involvement in the
greater China region had already started some years earlier. It had produced popular singers Cyndi
Wang and Vivian Hsu through Avex Taiwan in 2003. In 2005, Avex partnered with Beijing Celestial
Film & TV Production to release a CD for Chinese actress Chen Hao, who was contracted with the
Beijing company. But as of late 2007, no news had been released about her Japanese-language
album.59
SM Entertainment Arguably the South Korean counterpart of Avex Group, SM Entertainment
was a recording company and talent agency founded in 1995 by former popular singer Lee Soo-man.
In a decade, the company had grown from a five-person operation to a multi-faceted entertainment
conglomerate with $31.3 million in annual sales.60 SM Entertainment was also involved in the
development and supply of mobile and online contents, the export of licenses, and the management
of an entertainment academy. The company had cultivated icons such as H.O.T., BoA, TVXQ, and
Kang Ta (former H.O.T. member) and helped them rise to stardom in Asia, and it also promoted
many lesser R&B and hip hop groups. SM Entertainment’s stars were so popular beyond the South
Korean border that Lee Soo-man had become an icon of hallyu, or hanryu, which meant “Korean
wave,” 61 a widespread phenomenon of South Korean cultural products’ rising popularity in
neighboring Asian countries.
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The Globalization of East Asian Pop Music
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Since its founding, the company had always positioned itself for the entire Asian market, instead
of just South Korea. Founder Lee Soo-man explained:
When I founded this company in 1995, my goal was to succeed in Asia. I think I did succeed
in setting up an initial pop network in Asia, but this is only the beginning. The public and the
media think hanryu is only about exporting Korean television dramas and making Korean stars
popular abroad. But hanryu should evolve […] we need to establish a company in China with a
Chinese CEO who knows a potential Chinese star when he sees one. Korea should then pass on
its cultural contents and producing skills. By the time an Asian version of Hollywood is created
in China, at least one-third of it should naturally belong to Korean companies. My goal for the
next 10 years is to build the number one entertainment business in China.62
Behind this founding mission was the belief that South Korea, with its nearly 50 million people,
was not big enough to sustain the growth of a serious entertainment conglomerate. China, with a 1.3
billion population size and hence huge market potential, was the future of company growth.63 Lee’s
belief was reinforced when the band H.O.T. broke big throughout East Asia in 1998. SM
Entertainment held a meeting for long-term strategy, in which the company decided to go into the
foreign markets. In a special documentary program broadcast by the Seoul Broadcasting System
(SBS), SM’s strategy was revealed as follows:
•
•
•
•
•
It was necessary to focus on the teenage market as it grew;
Advancing into the foreign market should be based on a successful domestic market;
It was difficult to approach either domestic or foreign markets with a male singer;
It needed to find a new female face with dance skill;
She had to be less than 13 years old when debuting in the domestic and foreign markets.64
This less-than-13-years-old female dancer-singer turned out to be BoA, who was scouted in 1998
when she was only 11. BoA had two years of training in singing, dancing, and Japanese and English
language courses. She debuted in South Korea when she was 13.65 Her debut album was positively
reviewed in South Korea and climbed to the top 10 in the South Korean charts.
Partnership between Avex and SM SM Entertainment invested $3 million in BoA’s debut,
financed by H.O.T.’s success, providing the new singer with the best dance teachers from Japan to
choreograph her video for her debut album, ID: Peace B.66 BoA’s successful debut attracted Avex’s
attention. In 2001, SM Entertainment and Avex Group joined hands. SM Entertainment had hoped
to explore the neighboring Asian markets and build a regional entertainment empire. Avex shared
SM’s vision and also wanted to tap into the newfound market of Korea, which had previously
banned Japanese cultural contents since the end of the Second World War due to ongoing negative
sentiments (shared by many Chinese) toward Japan for Japanese colonialism and military conduct in
the first half of the 20th century. But the ban was lifted by the South Korean government in 2002 in the
wake of growing trade ties with Japan. The two companies, SM and Avex, signed a licensing deal in
which they would distribute music for each other in their respective countries. With the help of
Avex’s marketing power, BoA became immensely successful in Japan. Although Japan had seen
singers of various national origins, none had explicitly stated their origins publicly for fear of
discrimination. But BoA’s “made-in-Korea” identity and her fluent Japanese apparently had a new
appeal to the market, and she was known as a chart-topping singer. Released in 2002, BoA’s first
Japanese album Listen to My Heart caught some of the frenzy during the 2002 FIFA World Cup hosted
by both South Korea and Japan. It reached 12th on the top 50 album sales in Japan, stayed on the
Oricon Charts for 91 weeks, and sold 932,000 copies.67 BoA’s second Japanese album, Valenti, also
sold 1,249,000 copies. Her Japanese career was so successful that she became one of the Japanese
tarento (talents) with endless media appearances and merchandise endorsements.68
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The Globalization of East Asian Pop Music
Inspired by BoA’s success, a new wave of hybrid stars was born. With the goal of replicating
H.O.T.’s success, SM Entertainment produced the five-member boy band TVXQ in South Korea in
2004. Two years later, the group went overseas. In Japan, they were also signed under Avex.
Between 2004 and 2007, the group alternated its career between Korea and Japan, in addition to
touring around Asia to promote its albums. TVXQ proved to be another chart topper and won
awards throughout Asia, becoming especially popular among young women. Another popular SM
boy band, Super Junior, was signed simultaneously by SM Entertainment and Avex Asia, an Avex
subsidiary that focused its business in the greater China region. Super Junior changed its
membership and cultural complexion according to the country where it was performing. The group
featured a Chinese member, Han Geng, who sang in Korean and was the first foreigner to become a
pop star in the mainstream South Korean entertainment industry. Han Geng also visited China to
meet his Chinese fans and appeared on Chinese variety shows. Zhang Liyin, a young Chinese singer
who started training with SM Entertainment at the age of 13, followed a similar process. She studied
Korean and successfully broke into the South Korean market as a mainstream artist.69 But her
Chinese origins also allowed her to sing in Mandarin in the Chinese market.
In 2006, SM Entertainment, Japan’s Avex Group Holdings, and Avex China (which itself was a
joint venture between Avex Japan, Beijing-based Chengtian Entertainment, and Huayi Music
Production Limited) formed a joint venture “SMAC.”70 According to SM Entertainment’s founder
Lee Soo-Man, who would also be the director and general manager of the joint venture, the idea was
to utilize Japan’s capital investment, managerial, and marketing skills; Korea’s technological
innovation in producing cultural content; and China’s market potential and cheap labor costs, to
create more international stars.71
Westward Initiatives
JYP Entertainment In 1997, Park Jin-young, a Korean composer, star singer, and producer,
founded JYP Entertainment. He had a short but successful music career before the founding of his
own company. In the following decade, in addition to his own albums, he also produced some
household-name entertainers in South Korea, such as pop diva Park Ji-yoon and the five-member boy
band G.O.D. Park Ji-yoon debuted when she was 16 and transformed herself into an icon, with her
provocative music videos arousing much controversy in conservative South Korea.72 G.O.D.(or
Groove OverDose), was a relatively successful boy band and joined the million-seller rank when its
third and fourth albums sold more than 1.7 million copies in 2000 and 2001.73 The group disbanded
in 2005 when band members were required to fulfill the mandatory South Korean military service.
The most recent popular entertainers were the Wonder Girls, a 2007 creation that was parallel to SM
Entertainment’s Girl’s Generation. The Wonder Girls enjoyed success with their first single called
“Tell me,” featuring catchy melodies and highly choreographed dance moves.74 But the biggest star
that Park Jin-young ever produced was Rain. Since his debut in 2002, Rain had been riding hallyu.
Through soap dramas and hit songs, Rain had become a household name not only in South Korea,
but throughout Asia. In 2005, he sold out arenas across South Korea, China, and Japan, performing
for more than 40,000 in Beijing and 20,000 in Tokyo.75
In many ways, JYP’s strategies of localization, hybridization, talent recruitment, and
diversification were similar to those of SM Entertainment. The strategies differed fundamentally,
however, in that they were going in divergent directions geographically: JYP aimed to explore the
European and U.S. markets. JYP made it clear on its company website that it was “reaching for
globalization and expansion within the entertainment industry.”76 Park believed that “three types of
people can be global stars: Chinese who speak English, Americans who speak Chinese and Koreans
who speak Chinese and English.”77 Jimmy Jeong, chief operating officer of JYP, also noted that “the
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The Globalization of East Asian Pop Music
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U.S. market was waiting for a new wave to come after Latin artists such as Jennifer Lopez and Ricky
Martin hit the big stage 10 years ago,” and said that for Asian artists, “it’s not a dream anymore.”78
While some pessimists believed that the problems with Asian pop music entering the U.S. market
were due to differences in musical taste, as well as to the question of “authenticity”—producing
something distinctly Asian—Park saw building “a consistent image” as a key to developing
universally appealing stars. Park argued, “A consistent image can create stars with high added
value. Physical appearance, hairstyle, costume, dance, music, marketing, music video and even
interviews should be closely related under a single image.”79 Park also considered it a problem that
in the U.S. music market, “music companies, management companies and performance planning
companies work individually. It’s hard to create added value with music only, so companies are
likely to [suffer] a loss.” JYP aimed to do all these three things at the same time, centering on the
celebrities. Park further boasted that JYP’s stable of artists would break big in the U.S. “in two
years.”80 And Park was the first Asian producer to produce music for Will Smith, R. Kelly, R&B
singer Cassie, and rapper MASE.81
The company’s best bet came close in early 2006 when Rain held two performances in New York
City’s prestigious Madison Square Garden. JYP branched out from South Korea, and purchased a $4
million townhouse in Manhattan to set up the first music factory in North America with a goal to
“find and nurture the next world star.”82 In May 2007, Rain was chosen by Warner Brothers to join
the cast of the Hollywood film Speed Racer (2008). He starred as a rookie racer named Taejo
Togokhan.83 But by June 2007, Rain had ended his five-year contract with JYP. It was reported that
although Park offered a renewal, the 24-year-old star decided to start his own entertainment
company, “Rainy Entertainment” (which was later re-named “J Tune Entertainment.”) Rain’s father
was named chairman of the new company and was to oversee Rain’s entertainment business.84
But JYP had a pool of artists lined up for an American debut: Lim Jeon-hee (J Lim), Kim Ji-hyun
(G-Soul), and Lee Young-min (Min) were introduced in JYP’s 2007 inauguration party in Manhattan.
Park’s preparation of an American debut was thorough. To find young and talented singers, JYP
held open auditions each year throughout Asian countries. The chosen few from more than 1,000
celebrity hopefuls would be sent to a JYP training facility, where they would spend the next several
months, or even years, training. At the end, only one in 10 made it through the training process to a
debut. To fully adapt his stars into the American environment, JYP sent Min, for instance, to live in
New York City for several years. In July 2007, it was reported that Min, a 16-year-old trainee, would
make her official debut in the U.S. after four years of training as a JYP trainee. JYP also signed with
Jonathan Smith, an American rapper and producer better known as Lil Jon, to take on Min as his new
protégé.85 In an interview with Chosun Ilbo, the largest circulating newspaper in South Korea,
describing Min’s American debut as “black music with a K-pop feel,” Park said Min had finished
recording eight songs and that her album would be released in October 2007.86 But as of late 2007
only a single titled “Go Ahead” was circulating online. The song was sung in fluent English, was
distinctly hip hop, and had a simple but catchy tune. As for the other JYP trainees, Kim Jeong-hee
and G-Soul, they were expected to meet with some hip hop heavyweights such as R Kelly, the
Neptunes, and Outkast to help with their debuts.87
For a few months around the summer of 2007, the industry news focused repeatedly on JYP’s
American incorporation. But the news was soon replaced by Park’s comeback album in October.
After six years of working as a producer for his trainees, Park released his seventh album, this time
named Back to Stage. Park’s album featured hip hop dance songs as well as accomplished South
Korean singers such as Dynamic Duo, T, Bobby Kim, and Sun Ye of Wonder Girls, and it was
positively received at home in a market then dominated by teenage pop.88 As of January 2008, Park
himself, together with Wonder Girls, G-Soul, J-Lim, and Min, were all scheduled for a concert tour in
Los Angeles and New York City to prepare for their American debuts.89
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The Globalization of East Asian Pop Music
YG Entertainment YG Entertainment’s founder and CEO was Yang Hyun-suk, also known as
Yang Goon, who was a member of the legendary boy band Seo Taiji and Boys. After the group
disbanded in 1996, Yang became a producer and founded YG Entertainment in 1998. Its businesses
included music production, artist management, and album recording and sales. It sought to
differentiate itself in a competitive music market by focusing on the genre of hip hop and R&B.90
Since 2003–2004, YG Entertainment had approximately 18%–25% market share of the recording
industry in South Korea.91
Like the others, it had its own stable of artists: Jinusean and 1TYM, a hip hop duo and boy band
active since the late 1990s; Stony Skunk, a hip hop and reggae duo; Se7en, YG’s biggest R&B star
popular throughout East and Southeast Asia; and a newly introduced boy band called Big Bang. Big
Bang made a splash in South Korea in 2007 with their chart-topping singles and sold-out concerts.
The group also started off 2008 with an English-language mini album titled For the World in Japan,
following the footsteps of a rush of South Korean celebrities who made headlines in Japan.92
Se7en was the first male singer under YG Entertainment to break into the Japanese market in 2004,
and he won enormous popularity in Thailand as well. Starting in 2005, YG Entertainment had
partnered with Unlimited Group of Japan, 21 East Entertainment in China, and RS Promotion in
Thailand to promote Se7en in those countries. On the other side of the globe, to prepare for Se7en’s
debut in the U.S., YG Entertainment had signed a contract with the producer of Usher, Mark
Shimmel, who in turn designated Grammy-award winner Rich Harrison as a producer for the South
Korean star.93 In spring 2007, YG Entertainment announced that Se7en’s U.S. debut would be an
album called Fabulous. However, in April 2007, a video featuring Se7en singing the debut song “This
Is My Year” was leaked on YouTube. Subsequently, YG Entertainment announced that Se7en’s
American debut would be postponed until 2008.94 It was speculated that Se7en’s inability to speak
good English was one of the reasons for the delay of his debut.95 To date the company had not
announced a new release date.
In August 2007, Cho Sung-jin, or Skull, a member of reggae duo Stony Skunk, made a solo debut
in the U.S. with an English-language single “Boomdi Boomdi.” Skull produced the single and cowrote it with Mighty Mystic. His manager was Morgan Carey, superstar Mariah Carey’s brother.
The Korea Times described Skull’s entry into the U.S. market as “unconventional,” because he used
new media such as cell phones and the Internet to spread his music. He released an animated ring
tone in the U.S. in January 2007, and also created a webpage on MySpace.com.96
His single was positively received and his songs reportedly got airplay on many college and
satellite radio stations. It also ranked 16th on Billboard’s hot R&B/hip hop sales chart and gradually
climbed to number five on the same chart, as well as number 11 on the Hot Singles sales chart.97
Skull’s success surprised the YG management: “The top ten ranking is surprising even to us. The
past two years’ effort to penetrate the U.S. underground music world is beginning to show. But it’s
only the beginning.”98 Skull’s success, unfortunately, could not be sustained, once he was recalled by
the South Korean government to fulfill his mandatory two-and-a-half-year military service.99
Other Project-Based Initiatives and New Trends
Hybridization 100
Many more cross-border initiatives were project-based, and did not
necessarily involve a formal joint venture between two companies. They reflected the larger industry
environment: a constant demand for new faces and creative products. Such initiatives had given
birth to new trends, such as “hybridization”—music and films that drew inspiration and human
resources from various origins. The popular boy group F4 was created in 2003 to play leading roles
in Meteor Shower, an idol TV drama from Chinese Television System. Interestingly, the drama was a
visual adaptation of a popular Japanese comic series, Boys Over Flowers, except that the setting was in
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The Globalization of East Asian Pop Music
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Taiwan. The group also sang the theme song of the drama, which was composed by Japanese singer
Ken Hirai. The drama became hugely popular throughout China, Taiwan, Hong Kong, and
Southeast Asia, and F4’s debut album containing the theme song sold more than one million copies
throughout the region. In 2005, the drama entered Japan, reviving the popularity of the comic series
that was originally from Japan.101 In 2006, former boy band H.O.T. member Kang Ta (of SM
Entertainment) from South Korea partnered with Taiwan’s F4 member Vanness Wu (of Sony Music
Entertainment) to form Kangta & Vanness. The duo debuted in Thailand for the 2006 MTV Asia
awards and released their single “Scandal.” No album was recorded yet, and after Kang Ta’s
announcement that he would fulfill his military service in South Korea in 2008, their activities were
put on hold.
Battle of Wits was among a recent trend of Chinese films that were produced to tap into the
international markets. This genre of films were typically multinational productions that merged
expertise from different regions, with a pan-Asian cast, a story that featured martial arts (wuxia) or
imperial power struggles, and fancy visual effects. Other film examples included Yimou Zhang’s
Hero (2002) and House of Flying Daggers (2004). These early successes spun off a few more epic martial
art films such as The Promise (2005) by Chen Kaige, The Banquet (2006) by Feng Xiaogang, and Curse of
the Golden Flower (2006) by Zhang Yimou. The later series, despite larger production budgets, did not
perform as well in box offices. Criticism at home was that this genre of films had catered to foreign
investors and audiences, twisting Chinese history to be centered on formulaic power struggles and
kung fu fighting, but neglecting real contemporary Chinese life.102 In Korea, these films were not
necessarily successful compared with Hollywood and even some domestic movies, but as Ju Ik-lee
(CEO of Boram Production and producer of A Battle of Wits) said: “movies like A Battle of Wits have
big production costs to be borne by just one country, like China, Hong Kong, Japan or Korea. So we
can share the risk by working together.”103 In other words, a loss from one country could potentially
be covered over with a gain from another country.
Glocalization104
Another trend of tapping into the international market was the so-called
“glocalization” strategy—“localizing” stars or training local stars to cater to each country’s needs.
When entering a foreign market, these stars sang and greeted their fans in local languages. BoA,
TVXQ, and Super Junior from SM Entertainment were all successful examples of this trend.
Shinhwa, a six-member boy band also debuted in Japan in 2006 , and released a Japanese single “This
is the Sun in Our Hearts” in June 2007. Their August album Inspiration debuted at number four,
selling more than 100,000 copies. Most recently, Avex became a key investor in John Woo’s
production Red Cliff, the most expensive Asian film ever ($75 million), which featured Avex stars
(including Shido Nakamura) in supporting roles, although the leading roles went to Tony Leung and
Chow Yun-fat of Hong Kong, Zhang Fengyi from mainland China, and Chiling Lin from Taiwan.
Similar to other martial art films, the story was based on an historical event during the Three
Kingdom period in China.
Thus, in Asia, one saw two diverging trends: One was going East to tap the Asian market, with a
particular focus on China, such as SM Entertainment and Avex Group. The other was to go West and
challenge the U.S. market, exemplified by JYP Entertainment and YG Entertainment. Some in the
industry believed that it was only by “conquering” the U.S. market that one could declare global
excellence. Other observers predicted that cross-border joint ventures for market sharing would
become the market trend in East Asia; and that with further innovations in artist development,
marketing, and concert business management, Asia would become the epicenter of the global music
industry, as Detroit or New York or Los Angeles had once been. The pressing question for East Asian
music companies was, which approach (East vs. West, hybridization vs. glocalization) held the most
promise in the years ahead.
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This document is authorized for use only in Markus Taussig's Asia Pacific Business Environment (MT) course at NATIONAL UNIVERSITY OF SINGAPORE, from January 2017 to July 2017.
12,762
6.1
13,319
-3.0
7,387
2.4
1,203
21.8
820
-2.3
35,491
2.0
2004
12,270
-3.9
13338
0.1
8,077
9.3
1,360
13.1
814
-0.7
35,859
1.0
2005
11,511
-6.2
13,065
-2.0
9,341
15.6
1,409
3.6
752
-7.6
36,078
0.6
2006
10,482
-8.9
12,927
-1.1
10,023
7.3
1,456
3.3
729
-3.1
35,617
-1.3
2007
10,427
-0.5
13,087
1.2
10,650
6.3
1,532
5.2
736
1.0
36,432
2.3
2008
n/a
n/a
7,212
19.0
n/a
n/a
7,614
21.1
n/a
n/a
7,387
22.2
323
36.3
81
-12.9
5,041
0.6
242
5.2
151
2.0
2004
n/a
n/a
8,077
12.6
646
100.0
79
-2.5
5,142
2.0
384
58.7
129
-14.6
2005
2
n/a
9,341
16.5
1,090
68.7
71
-10.1
5,462
6.2
503
31.0
109
-15.5
2006
6
200.0
10,023
18.7
1,478
35.6
64
-9.9
5,399
-1.2
610
21.3
92
-15.6
2007
12
100.0
10,650
19.3
1,804
22.1
57
-10.9
5,372
-0.5
692
13.4
80
-13.0
2008
PricewaterhouseCoopers, Global Entertainment and Media Outlook, 2007–2011, pp. 293–294. Figures for 2007 onward are estimates..
237
30.2
93
-7.0
5,013
-7.6
230
-22.3
148
-14.0
2003
182
36.8
100
2.0
5,423
-3.5
296
-16.4
172
-3.4
2002
Asia Recorded Music Market by Country: Market Value and Growth, 2002–2011 (in US$ millions)
China
% change
Hong Kong
% change
Japan
% change
South Korea
% change
Taiwan
% change
Internet Distribution Not
Included in Country Totals
% change
Regional Total
% change
Source:
12,025
-4.9
13,729
-6.9
7,212
-5.3
988
-11.5
839
-2.4
34,793
-5.9
2003
10,603
1.7
13,457
2.8
11,248
5.6
1,634
6.7
751
2.0
37,693
3.5
2009
10,926
3.0
13,901
3.3
11,760
4.6
1,741
6.5
770
2.5
39,098
3.7
2010
11,308
3.5
14,330
3.1
12,177
3.5
1,831
5.2
791
2.7
40,437
3.4
2011
n/a
-0.4
n/a
1.9
n/a
5.4
n/a
5.4
n/a
1.0
n/a
2.3
2007–11
CAGR
-14-
19
58.3
11,248
16.0
2,039
13.0
51
-10.5
5,415
0.8
763
10.3
71
-11.3
2009
26
36.8
11,760
16.1
2,214
8.6
46
-9.8
5,458
0.8
819
7.3
65
-8.5
2010
31
19.2
12,177
12.5
2,356
6.4
41
-10.9
5,502
0.8
859
4.9
60
-7.7
2011
n/a
73.0
n/a
16.5
n/a
16.7
n/a
-10.4
n/a
0.1
n/a
11.3
n/a
-11.3
2007–11
CAGR
PricewaterhouseCoopers, Global Entertainment and Media Outlook, 2007–2011, published 2007, data compiled by PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates, p. 265.
Figures for 2007 onward are estimates.
Exhibit 2
Source:
12,643
-8.0
14,750
-2.6
7,614
-3.3
1,116
-5.3
860
-8.3
36,983
-4.9
2002
Global Music Industry: Market Value, Growth and Forecast, 2002–2011 (in US$ millions)
United States
% change
Europe, Middle East and Africa
% change
Asia Pacific
% change
Latin America
% change
Canada
% change
Total
% change
Exhibit 1
708-479
The Globalization of East Asian Pop Music
Exhibit 3
708-479
South Korean and Japanese Music Exports and Imports, 2003–2006 (in US$1000)
Region/Country
Year
South Korea
Export
Import
Japan
Export
Import
Europe
2003
2004
2005
2006
44
129
1,600
549
5,173
8,325
5,203
2,253
51
42
33
33
1,241
133
1,110
1,110
North America
2003
2004
2005
2006
88
106
78
49
9,276
9,863
2,653
576
98
79
77
77
1,389
149
980
980
Latin America
2003
2004
2005
2006
0
0
0
0
0
0
0
0
0
0
0
0
35
4
20
20
Japan
2003
2004
2005
2006
11,635
32,096
17,865
14,309
507
665
378
67
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
China
2003
2004
2005
2006
264
790
1,923
850
1,046
1,642
72
0
77
89
78
78
373
40
229
229
South Korea
2003
2004
2005
2006
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
16
17
13
13
77
8
105
105
South East Asia
2003
2004
2005
2006
1,245
921
782
621
33
42
0
0
40
30
16
16
95
10
55
55
Others
2003
2004
2005
2006
36
176
30
288
0
43
0
0
11
18
24
24
64
7
82
82
Total
2003
2004
2005
2006
13,312
34,218
22,278
16,666
16,035
20,580
8,306
2,896
294
275
241
241
3,275
352
2,582
2,582
Source:
Korean Ministry of Culture and Tourism and Recording Industry Association of Japan, http://www.riaj.or.jp/e/
data/others/disk.html.
Note:
Because of rampant piracy and lack of industry organization, there were no systematic statistical studies of Chinese
music’s exports and imports. The above figures for China include those of Hong Kong and Taiwan.
15
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708-479
The Globalization of East Asian Pop Music
Exhibit 4
Arrival of Non-Resident Visitors at Selected National Borders (by continent)
Year
Visitors Origin
Destination
Africa
China
Japan
South Korea
China
Japan
South Korea
China
Japan
South Korea
China
Japan
South Korea
China
Japan
South Korea
China
Japan
South Korea
Americas
East Asia
and Pacific
Europe
Middle East
South Asia
Source:
2001
2002
62,827
14,640
15,511
1,278,383
866,137
506,787
84,610,214
3,189,259
3,787,356
2,732,112
630,128
454,777
37,202
3,062
7,850
277,288
66,120
88,338
84,541
16,698
16,322
1,509,574
927,598
556,440
92,865,905
3,528,489
3,829,548
3,007,483
688,250
536,261
52,122
3,394
10,715
380,512
72,580
81,648
2003
91,949
16,434
14,834
1,132,937
824,345
505,067
87,214,341
3,625,013
3,334,633
2,789,888
665,187
514,403
45,856
3,166
8,045
383,121
76,217
86,000
2004
154,223
16,946
14,649
1,789,500
951,074
610,562
102,393,763
4,337,788
4,252,976
4,096,999
744,142
531,257
84,376
3,285
11,155
514,163
83,856
95,398
2005
210,533
20,583
14,464
2,145,758
1,032,140
640,050
112,053,459
4,761,395
4,441,757
5,165,588
817,092
540,694
110,966
3,072
13,050
599,435
92,676
92,189
Yearbook of Tourism Statistics Data 2001–2005, 2007 Edition, World Tourism Organization (Madrid, Spain), pp. 164–
167, 399–401, 417–421.
Exhibit 5
East Asian Singers’ Historical Sales Record in the United States
Type
Title
Artist
Year
Name of Hit Chart
Ranking
Single
Single
Single
Single
Album
Album
Album
Album
Album
Album
Album
Single
Sukiyaki
Sukiyaki
China Night
Kiss in the Dark
Silk Road
My Best
My Best
My Best
Tenku
Kojiki
Kojiki
You Do Me
1963
1963
1963
1979
1985
1986
1986
1986
1987
1990
1990
Hot 100
Top Singles
Hot 100
Hot 100
Top Jazz Albums
The Billboard 200
Top Jazz Albums
Top Jazz Albums
Billboard 200
Top New Age Albums
Billboard 200
Album
Album
Album
Single
The Right Combination
Live in America
Dream
Heartbeat
1990
1990
1991
1992
Hot Dance Music Single Sales
Hot 100
Top New Age Albums
Top New Age Albums
42
17
3
3
Album
Album
Album
Album
Let’s Knife
Rock Animals
Mandala
Made in USA (US Compilation)
Kyu Sakamoto
Kyu Sakamoto
Kyu Sakamoto
Pink Lady
KITARO
KITARO
KITARO
KITARO
KITARO
KITARO
KITARO
Ryuichi
Sakamoto
Seiko Matsuda
KITARO
KITARO
Ryuichi
Sakamoto
Shonen Knife
Shonen Knife
KITARO
Pizzicato Five
1992
1993
1994
1994
1994
Hot Dance Club Play
n/a
n/a
Top New Age Albums
n/a
41
n/a
n/a
3
n/a
1
13
58
37
20
141
17
38
183
1
159
16
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The Globalization of East Asian Pop Music
Type
Album
Album
Album
Album
Album
Album
Album
Album
Single
Album
Album
Album
Album
Album
Title
The Sound of Music by
Pizzicato Five
An Enchanted Evening
An Enchanted Evening
An Enchanted Evening
An Enchanted Evening
An Enchanted Evening
An Enchanted Evening
An Enchanted Evening
Let’s Talk About It
Peace on Earth
Peace on Earth
Peace on Earth
Peace on Earth
Peace on Earth
Album
Album
Single
Album
Album
Album
Peace on Earth
Peace on Earth
Good For You
Dream Walk
Happy End of the World
Sing or Die
Album
Album
Album
Album
Album
Album
Album
Album
Album
Album
Album
Album
Single
Single
Album
Album
Brand New Knife
Gaia Onbashira
Full Moon and the Shrine
Happy End of You
Playboy & Playgirl
Best of KITARO Vol.2
Thinking of You
Just No Other Way
The Fifth Release from
Pizzicato Five
Ancient
Ancient
Deep Blue
All to You
Just for Tonight
Heavy Songs
Eastern Energy
Single
Single
Single
Single
Single
Single
Album
Album
Album
Album
Album
Album
Album
708-479
Artist
Year
Name of Hit Chart
Pizzicato Five
KITARO
KITARO
KITARO
KITARO
KITARO
KITARO
KITARO
Seiko Matsuda
KITARO
KITARO
KITARO
KITARO
KITARO
1995
1995
1995
1995
1995
1995
1995
1996
1996
1996
1996
1996
1996
1996
n/a
16
4
5
199
6
15
16
16
8
185
4
3
KITARO
KITARO
Seiko Matsuda
Keiko Matsui
Pizzicato Five
Dreams Come
True
Shonen Knife
KITARO
Keiko Matsui
Pizzicato Five
Pizzicato Five
KITARO
KITARO
CoCo Lee
1997
1997
1997
1997
1997
n/a
HEATSEEKERS
Top New Age Albums
HEATSEEKERS (Pacific)
Billboard 200
HEATSEEKERS (Mountain)
Top New Age Albums
Top New Age Albums
Budding Under R&B/Hip-Hop
HEATSEEKERS
Billboard 200
Top New Age Albums
HEATSEEKERS (Mountain)
HEATSEEKERS (East North
Central)
HEATSEEKERS (Middle Atlantic)
Top New Age Albums
Hot Dance Club Play
Top Contemporary Jazz Album
n/a
1997
1997
1998
1998
1998
1998
1999
1999
1999
n/a
n/a
Top New Age Albums
Top Contemporary Jazz Album
n/a
n/a
Top New Age Albums
Top New Age Albums
n/a
n/a
n/a
9
9
n/a
n/a
16
21
n/a
2000
2001
2001
2001
2002
2003
2003
2004
n/a
Top New Age Albums
Top New Age Albums
Top Contemporary Jazz Album
Hot Dance Club Play
Hot Dance Club Play
n/a
Billboard Top 200 / Billboard
World Music
Hot Dance Club Play
Hot Dance Club Play
Hot Dance Air Play
Hot Single Sale
Hot Dance Club Play
Hot Dance Single Sale
HEATSEEKERS
Billboard 200
HEATSEEKERS(Pacific)
Billboard Comprehensive Album
HEATSEEKERS(Middle Atlantic)
HEATSEEKERS(East North
Central)
HEATSEEKERS (Pacific)
Exodus ‘04
Davil Inside
Davil Inside
Davil Inside
Davil Inside (Re-mix)
Davil Inside (Re-mix)
Exodus
Exodus
Exodus
Exodus
Exodus
Exodus
Pizzicato Five
KITARO
KITARO
Keiko Matsui
Seiko Matsuda
Seiko Matsuda
Shonen Knife
Twelve Girls
Band
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
Hikaru Utada
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
2004
Peace on Earth
KITARO
2005
Ranking
9
8
15
38
16
n/a
n/a
10
10
19
19
17
none
62 / 1
24
30
9
66
1
5
5
160
2
167
6
10
4
17
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708-479
The Globalization of East Asian Pop Music
Type
Single
Single
Title
Exodus ‘04
I Wanna Be Down
Album
Album
Album
Album
Album
Album
Single
Sacred Journey of Ku-Kai Vol.2
Exposed
Genki Shock
Just Want You
Spiritual Garden
Splurge
Boom Di Boom Di
Artist
Hikaru Utada
Ryuichi
Sakamoto
KITARO
CoCo Lee
Shonen Knife
CoCo Lee
KITARO
Puffy
Skull
Year
2005
Name of Hit Chart
Hot Dance Single Sale
Ranking
9
2005
2005
2005
2006
2006
2006
2006
2007
Hot Dance Club Play
Top New Age Albums
n/a
n/a
n/a
Top New Age Albums
Top World Albums
Billboard Hot Singles
41
11
n/a
n/a
n/a
7
9
14
Source: Japan External Trade Organization, “Hokubei ni okeru kontentsu shijyo no jittai (The contents market in the U.S.),”
March 2007, p. 45, http://www.jetro.go.jp/biz/world/n_america/reports/05001438, created by Wowmax Media
with original data from Billboard. Sales figure for CoCo Lee’s album Just No Other Way was retrieved from
Billboard.com,
http://www.billboard.com/bbcom/search/google/article_display.jsp?vnu_content_id=1945050.
Sales figures for the Twelve Girls Band album Eastern Energy was retrieved from PR Newswire, “Twelve Girls Band
Highest Debut by an Asian Artist in History of Billboard 200,” August 30, 2004. And sales figure for Skull’s Single
“Boom Di Boom Di” was retrieved from Chosun Ilbo, “Korean Reggae Artist Making Buzz in U.S.” August 6, 2007,
http://english.chosun.com/w21data/html/news/200708/200708060007.html.
Note:
In the above table, “n/a” in both the Name of Hit Chart column and Sales column indicates that there were not
enough sales in the U.S. in one week to appear on any chart.
Exhibit 6
Discography of Prominent K-pop and J-pop Singers, 1998–2007
Artist
Name
Date
BoA
BoA
2000
2001
BoA
BoA
BoA
2002
2002
2002
BoA
BoA
BoA
BoA
BoA
BoA
BoA
BoA
BoA
Rain
Rain
Rain
Rain
Rain
Rain
2003
2003
2003
2003
2004
2004
2005
2005
2006
2002
2003
2004
2005
2005
2006
Album Title
ID; Peace B (Korean)
Jump into the World
(Korean/Chinese/English)
Listen to My Heart (Japanese)
No. 1 (Korean)
Miracle (Korean)
Peace B REMIXES (Japanese)
Valenti (Japanese)
Atlantis Princes (Korean)
Shine We Are! (Korean)
Next World (Japanese)
Love and Honesty (Japanese)
My Name (Korean)
Girls on Top (Korean)
Best of Soul (Japanese)
Outgrow (Japanese)
Bad Guy (Korean)
How to Avoid the Sun
It’s Raining (Korean)
It’s Raining (Japanese)
a
Early Works (for sales in Japan)
Eternal Rain (Japanese with King
Records)
Chart Position
South
Japan
Korea
Sales
Japan
South
Korea
30
59
12,980
156,354
n/a
1
21
n/a
18
1
n/a
n/a
4
1
n/a
n/a
1
1
n/a
n/a
n/a
15
35
74
n/a
4
17
n/a
n/a
5
52
n/a
n/a
11
14
n/a
n/a
n/a
19
17
n/a
n/a
13,000
931,742
14,260
n/a
62,470
1,249,197
n/a
n/a
193,695
653,630
n/a
n/a
1,099,720
427,871
n/a
n/a
n/a
26,246
9,013
90,586
n/a
544,853
265,360
n/a
n/a
345,313
58,091
n/a
n/a
191,699
112,954
n/a
n/a
n/a
166,731
195,571
n/a
n/a
14
n/a
18,569
n/a
18
This document is authorized for use only in Markus Taussig's Asia Pacific Business Environment (MT) course at NATIONAL UNIVERSITY OF SINGAPORE, from January 2017 to July 2017.
The Globalization of East Asian Pop Music
Artist
Name
Rain
Se7en
Se7en
Se7en
Se7en
Se7en
TVXQ
TVXQ
TVXQ
TVXQ
TVXQ
TVXQ
TVXQ
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Ayumi Hamasaki
Utada Hikaru
Utada Hikaru
Utada Hikaru
Utada Hikaru
Utada Hikaru
Utada Hikaru
Utada Hikaru
Utada Hikaru
Date
2006
2003
2004
2006
2006
2006
2004
2004
2005
2006
2006
2007
2008
1999
1999
2000
2001
2002
2002
2003
2003
2004
2006
2006
2007
2007
2008
1998
1999
2001
2002
2004
2004
2006
2008
Album Title
Rain’s World (Korean)
Just Listen (Korean)
Must Listen (Korean)
First Seven (Japanese)
24/Se7en (Korean)
Se7olution (Korean)
Tri-angle (Korean)
Christmas Gift from TVXQ (Korean)
Rising Sun (Korean)
Heart, Mind and Soul (Japanese)
“O” Jung. Ban. Hap. (Korean)
Five in Black (Japanese)
T (Japanese)
A song for XX (Japanese)
Loveppears
Duty
A Best (Compilation Album)
I am
Rainbow
A Ballads (Compilation Album)
Memorial Address
My Story
(miss)understood
Secret
A Best 2-BlackA Best 2-White
Guilty
Cubic U
First Love
Distance
Deep River
Exodus (English)
Utada Hikaru Single Collection Vol.1
Ultra Blue
b
HEART STATION
708-479
Chart Position
South
Japan
Korea
57
9
n/a
10
n/a
16
15
n/a
n/a
8
n/a
23
93
8
n/a
35
n/a
4
25
n/a
n/a
1
10
n/a
4
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
2
n/a
1
n/a
2
n/a
4
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
1
n/a
Sales
Japan
5,649
n/a
n/a
28,659
n/a
n/a
4,647
n/a
n/a
13,802
n/a
37,686
80,061
1,451,910
2,562,130
2,904,420
4,294,179
2,308,112
1,856,919
924,242
1,062,288
1,131,776
877,433
666,396
702,895
721,839
568,288
702,060
7,650,215
4,469,135
3,604,588
1,074,393
2,582,901
909,113
818,335
South
Korea
121,357
212,317
161,880
n/a
108,381
52,362
287,534
68,888
275,438
n/a
409,020
26,210
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Source: Oricon Ranking Information Service (You-Taiju), Oricon Nenkan (Oricon Yearbook) (Oricon Entertainment; Tokyo)
1998–2007, The Recording Industry Association of Korea.
Note:
Sales in Japan were cumulative as of May 2007; sales in South Korea were cumulative sales between 2000 and 2007.
Where both the chart and sales rankings are noted as “n/a,” it means that sales were likely too small to have
registered on the industry charts.
a The album “Early Works” by Rain contains songs from his previous Korean albums.
bReleased on March 19, 2008 and still on the Oricon ranking.
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708-479
The Globalization of East Asian Pop Music
Appendix. Industry Structure of the Major East Asian Markets in 2007
South Korea
Industry at a glance Over the previous decade, an increasing amount of South Korean
popular cultural content—including television dramas, movies, pop songs and their associated
celebrities—had gained immense popularity in East and Southeast Asian countries. When SM
Entertainment’s boy band H.O.T. held its first concert in Beijing in 2000, the Chinese media was the
first to recognize the rise of South Korean popular culture and called it hallyu. Subsequently trade
revenues of South Korean recorded music sales went up by 84.1% to $152.9 million.105
Initially because of their cheap prices relative to Japanese and Hong Kong soap dramas, South
Korean TV dramas (the South Korean version of soap operas) began appearing on television channels
throughout East and Southeast Asia. They could go as low as $800 per episode in 2000, whereas
Japanese dramas cost four times as much, and those from Hollywood and Hong Kong cost 10 times
more. But the popularity of South Korean dramas had driven up the price 10 to 20 times over.106 In
2005, South Korean dramas lured more than one million foreign viewers of such TV series as Jewel in
the Palace and Winter Sonata to visit South Korea on so-called hallyu tours. These tourists visited
places where South Korean movies or dramas were shot, spending $1.5 billion in total.107
Following the strength of hallyu at the turn of the century, South Korean films, music, and drama
all went abroad. Cultural products were exported primarily to other East and Southeast Asian
countries. But some producers also tried to tap the European and North American markets.
Power of suppliers The South Korean entertainment industry was based on the training and
creation of stars. The hallyu phenomenon meant that South Korean stars became popular not only in
South Korea, but also in Japan, China, Taiwan, Hong Kong, and Southeast Asia. Stars became the
bridgehead of South Korean films amid hallyu. Similarly, few recording labels would want to make
risky bets on unproven independent singers, but often opted for pop stars that had been trained and
had the financial backing from major management agencies. Subsequently, star management
agencies became powerful in the entertainment industry.
In the music industry, these agencies also had bargaining power relative to its stars. Management
companies provided the necessary financial support in order to make stars big; in return, they earned
commissions through stars’ music sales, performances in dramas and movies, or advertisements.
High investment yielded high returns. There were only a handful of talent agencies, but each
audition easily brought out between 1,000 and 5,000 young people, who were quickly whittled down
to only 10 to 12, and who then started training at the facilities provided by the company. After
months or even years, only one in 10 would make it through the process and successfully debut as a
star.108 The contract system in the entertainment industry reflected this power disparity. Among
other provisions, the terms and conditions commonly included: (1) a liquidated damage clause
favorable to agents, (2) a constraint on early termination by the artists, (3) a long-lasting noncompetition clause, (4) a termination without cause clause only for the agents, or (5) free
transferability of contract only by the agent.109 In 2002 the South Korean government’s Fair Trade
Commission announced its disapproval of several contractual provisions.110
Power of buyers TV and radio stations played a significant role in promoting new songs and
artists. Traditionally, the broadcasting network controlled the music industry. There was no
authoritative record sales chart, and the only measure of songs’ and singers’ popularity was the
weekly chart shown on TV. In addition, musicians were required to perform with the TV networks’
resident studio bands and dancers, limiting the variety of music presented to TV viewers.111 It was
20
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The Globalization of East Asian Pop Music
708-479
not until 1992, when South Korea’s first rap band “Seo Taiji and Boys” gained immense popularity,
that the group was allowed to use its own band.112 But appearances on television—such as
participation in variety shows, having one’s music videos broadcast on music channels, and acting in
TV dramas—remained one of the most important ways to gain exposure. However, because of fierce
competition, companies sometimes made bribes to gain more exposure for their stars—something
they called “PR fees.”113 In the past, TV program producers had been found guilty of manipulating
charts on the popularity standings of songs in return for bribes.114
The threat of substitutes Watching DVDs, reading comic books, and playing video or online
games were some of the most popular home entertainment options. But online gaming was by far
the largest market. In 2005, the industry grossed $1.5 billion, which accounted for almost half of the
worldwide online game industry.115
Rivalry The industry had attracted significant investment since the mid-1990s, turning local
producers into owners of their own diversified business groups. During the dotcom boom, some,
such as SM entertainment and YBM Seoul, took advantage of high share valuations and went public.
Venture capitalists also poured money into the industry. Some had become huge conglomerates that
were horizontally and vertically integrated. Savannah Hahn, deputy managing director of Sony
Music Korea, was quoted as saying “we can’t compete.” Over 70% of annual music sales, or $290
million, were local acts. Going local was the only way for the foreign companies to compete.116
Key challenges In recent years there was concern over whether hallyu could be sustained. The
success of hallyu had drawn local resistance in some places. China, for instance, was so concerned
about the increasing cultural influence of hallyu that the government reduced the amount of airtime
during which foreign programs could be broadcasted—implicitly targeting South Korean TV dramas
because they consisted of the largest segment among all foreign programs. The Japanese media
corporations had also reduced or abolished airtime for South Korean dramas, claiming that they were
no longer commercially viable.117 All these had curtailed South Korean singers’ exposure in foreign
markets. Also, the success of the South Korean music industry had inspired other countries to create
their own substitutes. Increasingly more export destinations witnessed the creation of their own idolbased music markets, local auditions, and talent management companies.
To combat these problems and sustain industry growth, the South Korean government got
actively involved. The Ministry of Culture and Tourism was committed to “pour around 90 billion
won ($95.4 million) by 2010 to set up a digital-friendly market environment and help the market size
rise to one trillion won ($1.06 billion) five years later.”118 In 2006, the government also established a
400 billion won ($424 million) fund devoted to screening non-mainstream productions, establishing
offices abroad, providing financial assistance to multinational joint-production projects, helping local
distributors find overseas buyers, and training film staffers.119
Japan
Industry at a glance Long before hallyu became a regional phenomenon, Japanese cultural
products had been capturing the hearts of fans around the world. From consumers’ interest in the
minimalist household-product chain “Muji” to the cutesy “Hello Kitty,” from people’s affinity for the
video game “Pokemon” to the ubiquitous ramen food products, there was a steady flow of
consumers who were fascinated by, and in some cases obsessed with, things “made in Japan.”
Japanese pop music, or J-pop, had historically been popular throughout East Asia. In fact, the
Japanese music market was the second-largest in the world, with $5.3 billion in retail revenue in
2006.120 It was reported that pirated copies of Japanese content accounted for 17% and 32% of the
music software markets in Hong Kong and Taiwan, respectively. Namie Amuro and Ayumi
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Hamasaki (Ayu), both pop divas from Avex Group Holdings, had built a large following in East
Asia.121
But the market at home had experienced a downturn in recent years. From 2000 to 2004, Japan’s
domestic music industry experienced sluggish growth due to an economic recession, with the
sharpest decline of 9.3% recorded in 2002. The emergence of the mobile music business sector helped
the industry rebound remarkably starting in 2005. The mobile music business generated revenue
primarily through downloads of ringtone melodies, and later, through ringtone songs, as well as
through a full-track music download service. The high penetration rate of mobile phones in Japan
was the driving force for the sector’s success. In 2007, there were 98 million mobile phone
subscriptions—a penetration rate of 81% of the population (120 million); 85.6 million of them also had
mobile Internet service. The estimated market size of mobile-phone content was $300 million in 2006.
The market for short ring-tone melodies had shrunk significantly, whereas sales of complete ringtone
songs and full-track music downloads had taken off by 139% in 2005.122
The Japanese music market also had the largest singles market (for sound recordings) in the
world, in part due to the growth in the mobile music market. In 2004, 81.3 million units of singles
were sold, whereas total album sales were 201.3 million units.123 The ratio was remarkable: for every
2.5 albums that Japanese consumers purchased, they also bought a single song. Singles were popular
in Japan in part because of the Japanese love of karaoke. The Japanese saw karaoke as a major form
of entertainment, as well as a way to improve relations with business partners.
Power of suppliers In Japan, just like in South Korea, there was no clear distinction among
the TV, film, and pop music industries. Celebrities were trained and promoted by talent agencies,
and then went on to act in dramas, endorse advertisements, and if proven popular, to release albums
and hold concert tours. Just as in the other East Asian markets, Japanese companies often integrated
across sectors so as to assert more market power. For instance, TV networks would usually compose
their own music for a drama series. NHK, a broadcasting company, produced it own music and even
had its own orchestra. Avex, a Japanese record label, also had its own talent management business,
which enabled the company to avoid paying commission fees to other talent agencies.
These factors made the industry dynamic in Japan quite similar to that of South Korea. In fact,
South Korea’s SM Entertainment developed its talent scouting and training business based in part on
the Japanese talent management system. Founded by Johnny Kitagawa in 1963, Johnny & Associates
(“Johnny’s”) scouted and trained young boys, and had dominated the boy-band market in Japan ever
since. All the top male groups currently on Japanese TV were members of Johnny’s stable, including
SMAP, Tokio, Kinki Kids, and V6. Johnny’s training was systematic. It scouted young boys when
they were 12 to 14 and then provided training in singing, dancing, and acting. Because of its ability
to dominate the boy-band market, Johnny’s had become a hugely powerful industry player.124
Japan maintained a unique price maintenance system for music under antitrust law, which meant
that albums were not allowed to be sold anywhere at a discounted price. The stated intention behind
this policy was to ensure that less well-known singers or less popular genres of music could exist in
the market under fair competition, and that people in rural areas could still buy albums at
independent retail stores, whose livelihood would be destroyed if they had to sell albums at
discounted prices.125 The law was set up by the Recording Industry Association of Japan (RIAJ) and
had been controversial. According to Steve McClure, Asia bureau chief of the New York-based
music-industry magazine Billboard, the majors welcomed this system, as it maintained the current
status quo and preserved their market influence. Smaller companies and content aggregators did not
like the system because they were opposed to the current oligopolistic system in which the majors
basically set the price because they had more market influence.126 McClure believed that the system
would eventually be abolished. Others such as industry analyst Naoki Sekine begged to differ,
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arguing that the system helped to preserve product variety and actually opened up opportunities for
domestic competition.127
Power of buyers Traditionally, consumers of J-Pop, drama, and films were young people. But
as the under-25 demographic shrunk relative to the rest of the population, the middle-aged or 25-plus
group was increasingly more important to companies’ growth. The IFPI showed that in 2006, 22% of
music buyers were between the ages of 30 and 39, whereas the 20 to 29 group accounted for only 15%
of total music sales.128 In an effort to tap the 25-plus market, some Japanese companies released
numerous thematic compilation and greatest-hits albums.
The emergence of mobile music added complexity to the industry dynamic. For the ringtone
melody business, most of the revenue went to the Japanese record companies, thanks in part to the
Japanese Society for Rights of Authors, Composers, and Publishers (JASRAC). The JASRAC
established a specific copyright rule for ringtone melodies and ruled that for each download, 5 cents
was to be charged for melodies shorter than 45 seconds, and 7.7 cents for melodies longer than 45
seconds. The 21 major record companies established a joint venture called “Label Mobile” to provide
ringtone songs; thus, they did not have to share profits with other third-party content providers.129
Content providers were, however, attempting to share the profits of mobile music. For instance, a
major mobile company, NTT DoCoMo, had become a major shareholder of Tower Records Japan
since November 2005. It announced that it would start a new business using Tower Records’ retail
network to distribute mobile music. Not long after, record companies and telecommunication
companies became competitors in the mobile music sector.
Threat of substitutes Japan had a vibrant pop culture scene. What was considered merely
“cool” abroad played perhaps a more integral part in Japanese daily life. The Japanese had a wide
array of options when it came to entertainment: manga (Japanese comics and print cartoons), anime
(Japanese animation), video games, computer games, Internet social networking, cable TV, fashion,
etc. Manga was a big market in Japan, generating $6 billion revenue every year. Japanese animation
represented 60% of world animation. There was also a $12 billion market for video, arcade, and
console games. Cell phones were a $130 billion business, and toys and character goods brought $5
billion.130 Japanese consumers were also very trend conscious, and Tokyo had become a testing
ground for whether or not a product was popular. The nature of the entertainment business in Japan
was that different segments supplemented one another. One example was Doraemon, a manga series
about a robotic cat of the same name from the 22nd century. The series became so popular that related
TV anime, amine films, and character goods were developed. Another example was Avex’s Ayu and
“Hello Kitty,” by far the best-selling character good of Sanrio Company Limited. Avex and Sanrio
collaborated to produce jewelry, as well as other consumer products such as cameras.
Rivalry As of April 2004, there were 41 major companies that produced and sold music under
contract, there were independent (indie) music companies, and some artists who were independent
without recording company contracts. As the world’s second-largest music market, the Japanese
market was dominated by the Big Four, with Universal Music Group, Sony BMG, Warner Music and
EMI accounting for a large majority of the market share. But indie music was gaining more market
share year by year. Traditionally, indie music was mainly heard only at live venues. But in 2007,
indie labels asserted a market share of 18.1% in Japan. This trend was further reflected in the decline
of the number of albums achieving gold album status or becoming major hits.131 The appearance of
individualistic artists and the diversification in consumer preferences were cited as reasons for the
growth of the indie music sector. By 2003, Avex Group Holdings, an independent label that initially
focused on the distribution of dance music, had already become the world’s biggest indie label,
accounting for about 15% of Japan’s market.132
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Key challenges Japan’s music industry faced some of the same problems that the rest of the
world’s music market faced. For one, there were fewer stars being created in overseas markets like
the U.S. and UK, leading to a drop in imported music sales in Japan as of 2007. Second, despite a
recently increase in sales of domestically produced music, especially due to mobile music downloads,
the Japanese music companies continued to be worried about piracy.133 Yet these music companies
were aided by the fact that intellectual property rights were more strictly protected in Japan
compared to even the U.S. Copyright was automatically given to those who created the content
without the procedural registration, and any public use of the copyrighted material required the
creators’ consent. Those involved in delivering the content, such as singers, dancers, actors and
actresses, recording and broadcast companies, also had the so-called “neighboring copyright.”
Technically, Japan had been selling copy-controlled CDs (CCCDs) since 2002. Yet CCCDs proved
unpopular in the market. One industry source said, “Retailers had to start tracking which albums
were copy-controlled, because when the Japanese version was controlled and the import wasn’t,
there was often a heavier [demand for] imports….Ultimately, [CCCDs] were hard to hold together
unless all the labels were doing the same thing, and it has become clear that wasn’t likely to
happen.”134 By October 2004, major labels had scaled back CCCDs.
In 2007, music downloads from illegal Japanese mobile sites increased dramatically, equaling the
total value of legal annual mobile music downloads.135 In cooperation with the RIAJ, all three major
Japanese mobile carriers installed a filtering system to limit access to unauthorized sites starting April
2008. BMG Japan’s president Daniel DiCicco stated, “While this new system is not expected to
completely eradicate the problem, early signs are optimistic that the majority of illegal mobile
downloads can be curtailed.”136
The existence of album rental shops was another unique feature of the Japanese music market.
First opened in 1980, rental shops let consumers listen to the entire album before they decided if they
wanted to buy it. With an average rental fee of $3 per album and $1 per single, the 3,300 rental shops
had a market size of $550 million—equivalent of 12% of all audio record sales in Japan.137 But the
rental system was not accepted by the industry as consumers tend to duplicate albums themselves.
There were a few legal disputes between rental shops and record companies, until the former finally
agreed to pay a fixed fee to record companies.138 In 2007, music rental had taken on new meaning
with the growth of portable MP3 players. New rental fees were negotiated between the RIAJ and the
rental association to help compensate for additional lost sales, and these were distributed in kind to
the RIAJ member record companies.139
Japan was a forerunner in experimenting with digital and mobile music, but these new revenue
sources had not accounted for a large share of revenue, at 11% in 2006. Some were skeptical about
whether digital and mobile music would be the future for the Japanese music industry, since they
targeted the under-25 young consumers, whereas Japan’s population had been aging. When the
industry was at its prior peak, 57.5% of CD buyers were younger than 30. In 2006, this group of
people accounted for 34% of all CD sales.140 Among the mature music consumers, a 2004 survey
conducted by the RIAJ showed that although a significant number of people were enjoying music in
new media, the majority of them did not necessarily know how the new media functioned. Of those
responding to the survey, 56.9% were aware of paid music download services online, but only 29.3%
clearly understood the services available, while 27.6% indicated that they were somewhat aware, and
42.5% were completely unaware of Internet-based music download services.
Despite the above challenges, Daniel DiCicco, the president of BMG Japan, stated: “Japan’s music
market remains one of the healthiest in the world. Price control has limited the loss-leading that
ravaged markets like the US, a cultural preference for quality packaged product has helped to sustain
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the CD, and the use of the mobile phone as the primary connection to the internet (verses a computer)
has enabled a digital music landscape where all stakeholders are equitably compensated.”141
China
Industry at a glance According to PricewaterhouseCoopers’ industry research, in 2005
China’s entertainment industry recorded the world’s fastest growth rate, with a 26% CAGR. While
Japan had the largest entertainment market in Asia—totaling $104 billion in 2005—it would likely be
surpassed by China in 2009. It was forecasted that China’s entertainment industry would grow at an
18% CAGR to $137.4 billion in 2011, the biggest increase in the world during the forecasted period.142
Despite concerns about piracy, the music industry also had recently seen a boom in sales. In 2006,
trade revenue from music sales grew by 24.5% to $74 million. Much of the market’s growth came
from the emerging sector of digital music—including music obtained online or downloaded onto
mobile phones—whereas sales of music in physical units such as CDs and DVDs did not grow but
continued to decline by more than 30% over the prior two years.
The mobile phone was expected to be the biggest platform for the future recording industry in
China. According to the IFPI, in 2005 there were 417 million mobile phone subscriptions in China, as
opposed to 41 million broadband lines. Figures for digital or mobile downloads were not available in
China, but most industry analysts believed that the mobile platform would be a key element in the
mainland's music business.
For a country that had been reopened to foreign investment less than 30 years ago, the Chinese
entertainment industry was still at an early stage of development. In the 1990s, there were still some
300 state-owned companies, which were poorly equipped and lacked funding.143 They lacked
incentives and experience to promote products in a market economy, and were widely acknowledged
as a hindrance for the industry to shape into a coherent body. As a result, the government ordered
consolidation of the industry, and the number of state-owned enterprises was diminishing every
year. 144 Furthermore, the government identified the “cultural industries” for “accelerated
development” during the so-called “Eleventh Five-Year Plan” period from 2006 to 2010.145
Power of suppliers There were primarily two types of suppliers in the Chinese music
industry. One was the talent agencies that developed and represented the singers. Another was the
production companies that recorded albums, and produced dramas and films. Just like the
entertainment industry in other countries, the Chinese entertainment industry depended on the
popularity of stars. Inspired partly by popular reality TV shows (such as American Idol), and partly
by successful foreign agencies (such as SM Entertainment of South Korea and Johnny’s & Associates
of Japan), Chinese talent agencies and broadcasting companies had collaborated to host widely
publicized singing contests and auditions. These contests were broadcast on television—in a country
where television infiltration rate was higher than 90%, contest winners could rise to stardom almost
overnight. Agencies then offered contracts, usually from five to eight years, to these new stars.146
Throughout the contracts, management companies provided marketing support and negotiated
performance deals for their stars. Over time, the companies regained their investments through CD
sales, and commissions of stars’ appearance on commercials, TV dramas, and movies.
The competitive dynamic between agencies and stars in China was significantly different from
that in Japan and South Korea. First, the Chinese industry was highly fragmented; with many smallscale companies; none had come to exert a significant market share.147 In some cases, if stars were not
satisfied with the contract details, they could refuse to sign the contracts, and still keep themselves
open for other agencies and performance opportunities. This was almost unheard-of in South Korea
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or Japan, where agencies were influential enough to prohibit disgruntled stars from participating in
other programs.148 In comparison, Chinese stars had more bargaining power with their agencies.
Power of buyers Buyers in China could be divided into two groups: consumers of music, and
intermediate buyers such as record stores, karaoke lounges, and TV networks. In recent years, with
rising disposable income, Chinese consumers seemed increasingly willing to pay more for higherquality, legal copies. In some more prosperous coastal cities, such as in Beijing and Shanghai, a
significant number of consumers were even willing to pay high prices to attend live concerts. In
2006, Linkin Park held a concert in the Shanghai Stadium. Tickets for the concert were priced at $50,
but still attracted a sold-out crowd of 25,000. According to Shen Li-hui, founder and CEO of Modern
Sky (an independent record label that was exploring the realm of multimedia entertainment), “The
Chinese were hungry for different kinds of entertainment. The market in China was huge and people
were getting more willing to spend.”149
Piracy had forced record labels to sell CDs at discounted prices. Back in 2003, a legal CD cost
from $6 to $18; in a country with a per capita income of about $2000 per year, this price was
considered too high and was linked to the public’s appetite for pirated products.150 Moreover, most
local CD shop owners, especially those in remote rural villages, were unable to distinguish between
legal and pirated copies. The cheaper pirated copies easily found their way into local markets.151 The
IFPI estimated that about 85% of recordings in China were illegal, representing a total value loss of
$410 million in 2006.152
Threat of substitutes Well-off Chinese consumers had a growing number of alternative
entertainment options in 2007. Young people in China were, for example, avid game players—for
both online and video games. Game industry experts estimated that China had 27 million gamers,
and 29% of them played games more than 60 hours per month, which contributed to a 23.6% growth
rate in China’s video game market. It was further forecasted that the gaming market in China would
hit $2.1 billion by 2010.153 Another entertainment alternative that the Chinese loved was theme parks.
China started to develop a “theme park fever” in the 1990s when Chinese leaders and developers
visited international theme parks such as Disneyland, Universal, and Las Vegas. By 2006, it was
estimated that there were at least 200 theme parks, and more were being developed.
Rivalry In China, there were literally hundreds of talent agencies, film and TV production
companies emerging every year and competing vigorously. Consolidation was slowly occurring, and
diversified business groups with financial wealth and management experience found themselves in a
position to set the terms of industry consolidation going forward.
Key challenge The Chinese entertainment market was large, new, and rapidly changing.
Piracy remained the single most important challenge to the industry. To compete with the pirates,
recording companies such as the Big Four and film distributors such as Time Warner Twentieth
Century Fox Film Corp. had been experimenting with DVD release dates—to release DVDs earlier so
as to shorten the time customers needed to wait for the legitimate copies to come out on the market.
But curtailing piracy involved understanding piracy’s root cause in China, which was affordability.
Even in the coastal cities, there was a disconnect between supply and demand, as many film and
music consumers were teenagers or young people who did not have much disposable income.
The music market seemed willing to compromise on price. Several companies willingly lowered
their CD prices. EMI released the popular Hong Kong singer Hacken Lee’s CD in the Pearl River
Delta area at a discounted price. Warner Music China also received permission from Warner Bros
(Linkin Park’s home label) and from the band’s management, to offer Linkin Park’s album Meteora at
what it called an “entry-level” price.154 Legitimate music CDs sold for around $2, which was still
roughly double the price of pirated unit. 155 In live performances, although some famous
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international bands still asked for high prices (from $30 to almost $100), small venue performances
were usually cheaper. Modern Sky organized a series of music festivals in China, and tickets were
priced at 60 yuan (about $8) for a full day of performances. As general manager Michael LoJudice of
Modern Sky said, tickets were priced to “get the kids out.”156
The lack of intellectual property rights (IPR) protection was responsible for revenue loss in most
areas but some, such as Modern Sky, believed it was also a golden opportunity to explore new
revenue sources. Modern Sky, for one, believed that precisely because China did not have a reliable
legal system to protect IPR, it forced companies to be even more innovative to replace the traditional
model of album sales.157 Shen Li-hui of Modern Sky believed that the future business model in the
Chinese music market would center on the merchandise and concert business. The company had
released about 100 albums—mostly money losers, but it had a host of supplementary businesses,
producing children’s books, videos and film production, design, animation production, commercial
licensing, and art and fashion retail.158 Although Linkin Park’s latest CD was not released in China,
its concert grossed $750,000, which on a per-ticket basis was roughly equivalent to the band’s take on
recent American tours.159 To capitalize on this emerging market, international touring companies
had established regional offices in China. Ticketmaster bought a majority stake in Emma
Entertainment, a Chinese promoter and ticketing service that presented the Linkin Park show.
The emergence of the digital and mobile music market presented new business opportunities in
China. In 2006, while sales of physical albums declined 34.3% to 26.1 million units, overall recordedmusic sales rose on a value basis, because of the increasing popularity of digital music products such
as ringback tones and master ringtones.160 According to William Bao Bean, partner in Hong Kongbased venture capital firm Softbank China and India Holdings, Chinese consumers spent $1.5 billion
in 2006 on mobile and digital music. But the music industry received only about 4.5% of that
amount.161 As of 2007, there were still hundreds of illegal music websites.
But 2007 could prove to be a turning point for the music industry in China. In 2006, a group of
music companies sued Baidu, a prominent search engine in China, for “deep linking”—a practice that
linked Web searchers to unauthorized downloads hosted by unaffiliated illegal sites.162 The music
companies lost the case, despite the fact that the music industry had won similar cases against deep
linking in the Netherlands, Norway, and Australia.163 In April 2007, led by the IFPI, 11 music
companies filed another lawsuit against Yahoo! China for deep linking. They won the case, although
compensation was a minimal 210,000 yuan ($28,455). The move was symbolic, nonetheless. Inspired
by the Yahoo! lawsuit, Entertainment Base, a legal, membership-based music download website,
appealed a previously lost case, for the fifth time, against Baidu’s deep linking practice and asked for
a compensation of 100 million yuan ($13.5 million). The case was still going on, but as Tony Hotung,
director of business development at Music Copyright Solutions’ Asian office, said, “[the Chinese legal
environment was] improving in terms of enforcement, thresholds [were] being lowered, and there
[was] a sense that the authorities [were] determined to get a grip on the piracy issue.”164
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Endnotes
1 Data on population and nominal GDP in U.S. dollars are from the Economist Intelligence Unit Country
database, accessed February 18, 2008.
2 International Federation of Phonographic Industry, The Recording Industry 2006 Piracy Report: Protecting
Creativity in Music, London, 2006, p. 11, http://www.ifpi.org/content/library/piracy-report2006.pdf, accessed
February 22, 2008.
3 Nyay Bhushan, Steve McClure, Mark Russell, “Meet the Miracle Markets: A Dozen Nations Where
Recorded-Music Revenue Actually Increased in 2006,” Billboard Biz, August 25, 2007, p. 15.
4 PricewaterhouseCoopers, Global Entertainment and Media Outlook, 2007–2011, published 2007, data compiled
by PricewaterhouseCoopers LLP and Wilofsky Gruen Associates, p. 294.
5 Hiromi Lorraine Sakata, Asian and Asian-American Music, Portland Public Schools Geocultural baseline
Essay Series, December 22, 1999, p. 7, http://www.pps.k12.or.us/depts-c/mc-me/be-as-mu.pdf, accessed
December 22, 2007.
6 During the Han Dynasty, Han Wudi (141BC–86BC) first adopted Confucianism as an official state
philosophy. But Confucius (551BC–479BC) firs started teaching during his lifetime, although his teachings were
not popular among feudal lords at that time.
7 Hiromi Lorraine Sakata, Asian and Asian-American Music, p. 11.
8 Hiromi Lorraine Sakata, Asian and Asian-American Music, p. 16.
9 Hannah Beech Naha, “Great Expectations: An Unconventional Academy in Okinawa Is Grooming
Promising Young Performers for the World Stage,” Time Asia Magazine, May 3, 1999, http://www.time.com/
time/asia/asia/magazine/1999/990503/actors1.html, accessed August 25, 2008.
10 Hiromi Lorraine Sakata, Asian and Asian-American Music, p. 18.
11 Steve McClure, “Shokichi Kina,” http://nippop.com/artist/artist_id-11/artist_name-shokichi_kina/,
accessed June 13, 2008.
12 Cliff Furnald, “Shokichi Kina and Champloose: A Collection of Reviews Written Between 1987 and 1996,”
http://www.rootsworld.com/rw/feature/kina.html, accessed June 13, 2008.
13 Laboratory of Image Culture Okinawa, “The Heart of Japan, the Heart of Okinawa,” http://www.asiadocumentary.com/works/okinawa-submit.html, accessed June 13, 2008.
14 Cliff Furnald, “Shokichi Kina and Champloose.”
15 Farsidemusic.com,
“Shokichi
Kina
&
Champloose,”
originally
from
Japan
Times,
http://www.farsidemusic.com/acatalog/shokichi_kina.html/, accessed August 25, 2008.
16 Laboratory of Image Culture Okinawa, “The Heart of Japan, the Heart of Okinawa.”
17 Steve McClure, “Shokichi Kina.”
18 Steve McClure, Nipponpop, Tokyo, Japan: Tuttle Publishing, 1998, p. 17.
19 Naoki Sekine, “The Music Business in Asia,” in The Global Music Industry: Three Perspectives, by Arthur
Bernstein, Naoki Sekine, Dick Weissman, New York: Routledge (2007), p. 253.
20 Naoki Sekine, “The Music Business in Asia,” p. 254.
21 People.com.cn, “Korean Drama Touched Foreign Audiences through Its Sincerity,” October 31, 2005,
http://world.people.com.cn/BIG5/1031/3813835.html, accessed November 21, 2007.
22 Naoki Sekine, “The Music Business in Asia,” p. 253.
23 Deborah Sontag, “The Ambassador,” New York Times, January 29, 2006.
24 Arthur Bernstein, Naoki Sekine, and Dick Weissman, “Conclusion: Loose Ends, Final Thoughts, and the
Future,” in The Global Music Industry, p. 267.
25 Steve McClure, “Japanese Star Hopes to Rock the U.S.,” International Herald Tribune, April 7, 2004,
http://www.iht.com/articles/2004/04/07/uta_ed3_.php, accessed December 23, 2007.
26
Bryan
Reesman,
“Kabuki
Rock,”
Grammy.com,
November
30,
2006,
http://www.grammy.com/GRAMMY_Awards/News/Default.aspx?newsID=2278&newsCategoryID=3,
accessed December 22, 2007.
27 Ibid.
28 Steve McClure, “Why Japanese Singers Fail to Crack U.S. Market,” Japan Today, May 18, 2001,
http://www.japantoday.com/jp/comment/40, December 28, 2007.
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29
Steve McClure, Nipponpop, p. 67.
Alex Mar, “Shonen Knife Brings Sweets: Japanese Pop-punks Launch Spring Tour Behind Reissues,”
Rolling Stone, March 1, 2005, http://www.rollingstone.com/news/story/7069216/shonen_knife_bring_sweets,
accessed January 3, 2008.
31 Keith Cahoon, “Catching Up with Shonen Knife,” Nippon.com, February 26, 2005, http://nippop.com/
features/feature_id-11/, accessed January 3, 2008.
32 Steve McClure, Nipponpop, p. 104.
33 Steve McClure, Nipponpop, p. 153.
34 Karen Schoemer, “Pop/Jazz; Japanese Trio with Songs of Animals and Oysters,” New York Times, August
16, 1991.
35 Neil Strauss, “Review/Music; Rebuilding Rock-and-Roll from the 50’s Up,” New York Times, May 10, 1994.
36 Ilya Garger, “A Dozen Roses,” Time Magazine, May 24,
2004, http://www.time.com/
time/magazine/article/0,9171,501040531-641204,00.html, accessed December 22, 2007.
37 PR Newswire, “Twelve Girls Band Highest Debut by an Asian Artist in History of Billboard 200,” August
30, 2004.
38 Author’s interview with Steve McClure, December 21, 2007, and Twelve Girls Band Official website,
“About Us,” http://www.12girls.org/gywm-yfjj.asp, accessed December 22, 2007.
39 Ilya Garger, “A Dozen Roses.”
40 Steve McClure, Nipponpop, p. 19.
41 Billboard.com, “Ask Billboard,” July 30, 2003, http://www.billboard.com/bbcom/search/google/
article_display.jsp?vnu_content_id=1945050, accessed January 3, 2008.
42 Steve McClure, “Import-Export Issues Mark J-pop Year,” The Daily Yomiuri, December 23, 2004.
43 Casewriter’s Interview with Steve McClure, December 21, 2007.
44 International Federation of Phonographic Industry, IFPI 2007 Recording Industry in Numbers, pp. 43, 45, 47,
51.
45 Steve McClure, Nipponpop, p. 151.
46 Casewriter’s interview with Steve McClure, December 21, 2007.
47 Steve McClure, “Import-Export Issues Mark J-pop Year.”
48 KBS Global, “Rain’s Album Records Sales of over One Million Copies in Asia,” http://english.kbs.co.kr/
entertainment/ news/1375194_11858.html, accessed January 6, 2008.
49 The Honolulu Advertiser, “Rain Concert VIP Ticket Refund Start Today,” June 20, 2007.
50 Casewriter’s correspondence with Steve McClure, August 26, 2008.
51 Park Soo-mee, “Making It in the Big Time: K-Pop Wants U.S. Air Play,” Joins.com, February 16, 2006, via
Factiva, and Jon Pareles, “Korean Superstar Who Smiles and Says, ‘I’m Lonely’,” New York Times, February 4,
2006.
52 Park Soo-mee, “Making It in the Big Time: K-Pop Wants U.S. Air Play.”
53 Peter Serafin, “Shakeup at Japan’s Avex Claims Yoda,” Billboardbiz, August 9, 2004,
http://www.allbusiness.com/retail-trade/miscellaneous-retail-retail-stores-not/4369664-1.html,
accessed
January 18, 2008.
54 OneSource, Avex Group Holdings, accessed via OneSource Information Services, Inc., accessed January 18,
2008.
55 The Nation (Thailand), “Breaking Cultural Barriers in Artist Management,” July 10, 2007, accessed via
Factiva.
56 The Nation (Thailand), “Breaking Cultural Barriers in Artist Management.”
57 Steve McClure, “Avex Targets China,” Billboard, April 8, 2006.
58 Avex Company press release, “Announcement Concerning the Establishment of a Joint Venture in China,”
November 16, 2006, http://www.avex.co.jp/e_site/press/2007/061116.pdf, accessed January 4, 2008.
59 Avex Company press release, “Famous Chinese Actress Chen Hao CD Debut in Japan,” June 21, 2005,
http://www.avex.co.jp/e_site/press/2005/050621.pdf, accessed January 4, 2008.
60 OneSource, SM Entertainment, accessed via OneSource Information Services, Inc., January 18, 2008.
30
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SBS Special, “Asia Showbiz Three Way Battle: Soo-man Lee’s CT Theory and the Future of Hanryu,”
Seoul, South Korea: Seoul Broadcasting System, Special #33, March 12, 2006.
62 Lee Kyong-hee, “Promoter of Korean Wave Wants Part in Chinese Hollywood,” Joins.com, February 23,
2006.
63 SBS Korean Broadcasting Special Documentary, “Asia Showbiz Three Way Battle?”
64 SBS Korean Broadcasting Special Documentary, “Asia Showbiz Three Way Battle?”
65 CNN Talk Asia, “BoA Talk Asia Transcript with Anjali Rao,” December 15, 2006, http://edition.cnn.com/
2006/WORLD/asiapcf/12/15/talkasia.boa.script/index.html, accessed November 16, 2007.
66 CNN Talk Asia, “BoA Talk Asia Transcript with Anjali Rao.”
67 Recording Industry Association of Japan, Related Data, http://www.riaj.or.jp/e/data/index.html,
accessed January 18, 2008.
68 Steve McClure, “BoA Profile,” Nippop.com, http://nippop.com/artist/artist_id-86/artist_name-boa/,
accessed January 4, 2008.
69 David Watts, “Steely Showman Sets His Sights on Global Domination: Interview Lee Soo-Man,” The Times,
October 18, 2006.
70 Avex Group Holdings Press Release, “Announcement Regarding the Establishment of a Joint Venture in
China.”
71 SBS Korean Broadcasting Special Documentary, “Asia Showbiz Three Way Battle?”
72 Korea Times, “Pop Chameleon Takes on Acting,” March 22, 2004, accessed via Factiva
73 Kpopmusic.com, “Top K-Pop News for January,” January 25, 2001, http://www.kpopmusic.com/news/
january.shtml, accessed January 28, 2008.
74 Chosun Ilbo, “New Trends in the Music Industry in 2007,” December 21, 2007, accessed via Factiva.
75 Deborah Sontag, “The Ambassador.”
76 JYP Entertainment Company website, “JYPE Introduce,” http://www.jype.com/main/about_eng/
company/company01.htm, accessed January 28, 2008.
77
Chosun Ilbo, “Park Jin-young Has Ambitions to Conquer the World,” July 3, 2007,
http://english.chosun.com/w21data/html/news/200707/200707030017.html, accessed January 28, 2008.
78 Bangkok Post, “Firms Debate Next Destination for Rain: Grammy to Market More Artists Overseas,” July
10, 2007.
79 “Park Jin-young has ambitions to conquer the world,” Chosun Ilbo, July 4, 2007.
80 Ibid.
81 Chloe A. Hilliard, “Seoul Train,” The Village Voice, July 10, 2007, http://www.villagevoice.com/2007-0710/nyc-life/seoul-train/, accessed August 28, 2008.
82 Bangkok Post, “Firms Debate Next Destination for Rain.”
83 Cathy Rose A. Garcia, “Rain to Star in Hollywood Film,” The Korea Times, May 16, 2007,
http://www.koreatimes.co.kr/www/news/special/2007/05/139_3030.html, accessed August 28, 2008.
84 Popseoul.com, “Rain Creates Rainy Entertainment,” August 4, 2007, http://popseoul.com/2007/08/04/
rain-creates-rainy-entertainment/, accessed January 28, 2008.
85 Chloe A. Hilliard, “Seoul Train,” The Village Voice, July 17, 2007.
86 Chosun Ilbo, “Park Jin Young Has Ambitions to Conquer the World.”
87 Chosun Ilbo, “Park Jin Young Has Ambitions to Conquer the World.”
88 Soompi.com, “Album Review—Park Jin Young (JYP) Vol. 7 Back to Stage,” December 23, 2007,
http://www.soompi.com/music/reviews/park_jin_young_jyp_vol_7, accessed January 28, 2008.
89 KBS Global, “Wonder Girls to Enter U.S. Market,” http://world.kbs.co.kr/english/entertainment/
enter_chart_detail.htm?No=6827, accessed January 29, 2008.
90 YG Entertainment Company website, “Vision,” http://ygfamily.com/, accessed January 29, 2008
91 YG Entertainment Company website, “Scope of Business,” http://ygfamily.com/, accessed January 29,
2008.
92 Han
Sang-hee, “Big Bang Will Knock on Japan,” Korea Times, January 3, 2008,
http://www.koreatimes.co.kr/
www/news/special/special_view.asp?newsIdx=16685&categoryCode=178,
accessed January 29, 2008.
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KBS Global, “Se7en Set to Make U.S. Debut,” http://english.kbs.co.kr/entertainment/news/
1420372_11858.html, accessed January 3, 2008.
94 PopSeoul.com, “Se7en’s US Debut Song Leaked on YouTube,” April 6, 2007, http://popseoul.com/
2007/04/06/se7ens-us-debut-song-leaked-on-youtube/, accessed January 18, 2008.
95 Allpop.com, “2007 Celebrity Superlatives: The Best, the Worst, the Plastic,” December 16, 2007,
http://www.allkpop.com/index.phparticles_full/2007_celebrity_superlatives_the_best_the_worst_the_plastic/,
accessed January 29, 2008.
96 Cathy Rose A. Garcia, “Skull Tries Unconventional Way to Win US Fans,” Korea Times, January 4, 2007,
accessed via Factiva
97 Chosun Ilbo, “Korean Reggae Artist Making Buzz in U.S.,” August 6, 2007, http://english.chosun.com/
w21data/html/news/200708/200708060007.html, accessed January 29, 2008.
98 KBS Global, “Skull Makes Billboard Top 10,” http://english.kbs.co.kr/entertainment/news/
1469415_11858.html, accessed January 29, 2008.
99 Music Industry News Network,” Skull: A Powerful Voice for Korea May Soon Be Silenced by Mandatory
Military Service,” September 17, 2007, http://mi2n.com/press.php3?press_nb=103378, accessed January 29,
2008.
100 Robert Holton, “Globalization’s Cultural Consequences,” Annal of the American Academy of Political and
Social Science, Vol. 570, Dimensions of Globalization (Jul7 2000), pp. 140—152. According to the author,
“hybridization” is considered one of the cultural consequences of globalization, that “cultures borrow and
incorporate elements from each other, creating hybrid, or syncretic, forms. Evidence of hybridization mainly
comes from popular music and religious relief.
101 Naoki Sekine, “The Music Business in Asia,” p. 260.
102 Antoaneta Bezlova, “Perpetuating A Skewed View of Chinese History,” Asia Times Online, January 24,
2007, http://www.atimes.com/atimes/China/IA24Ad01.html, accessed January 3, 2008.
103 SBS Korean Broadcasting Special Documentary, “Asia Showbiz Three Way Battle?”
104 Roland Robertson, “Glocalization, Time-Space, and Homogeniety-Heterogeneity,” in Global Modernities,
edited by M. Featherstone, S. Lash, and R. Robertson, Thousand Oaks, California: Sage, 2005. The term
“glocalization” combines “globalization” and “localization” first appeared in the late 1980s in articles printed in
Harvard Business Review. But sociologist Roland Robertson was credited for popularizing the term in 1997.
105 International Federation of Phonographic Industry, IFPI 2007 Recording Industry in Numbers, p. 51.
106 Samuel Lee, “Seoul Survivor,” The Straits Times, April 8, 2003.
107 Korean Ministry of Culture and Tourism, “Seoul to Make Hallyu Map to Entice Tourists,” Issue Link,
January 14, 2007. http://www.mct.go.kr/english/issue/issuelink_view.jsp, accessed September 24, 2007.
108 Chloe A. Hilliard, “Seoul Train.”
109 Jae-Hoon Cheong, “Regulation on Agent Business in Korean Entertainment Industry,” Thesis from
Harvard Law School, pp. 9–10.
110 AFX Asia, “South Korea FTC Penalises SM Entertainment, 7 others for collusion/unfair practices,” July
28, 2002.
111 Keith Howard, “Exploding ballads: The Transformation of Korean Pop Music,” in Global Goes Local:
Popular Culture in Asia, edited by Timothy J. Craig and Richard King, Vancouver: UBC Press, 2002, p. 81.
112 Doobo Shim, “Hybridity and the Rise of Korean Popular Culture in Asia,” 37.
113 AFX Asia, “South Korea FTC Penalises SM Entertainment.”
114 Agence France Presse, “South Korean Show Business Accused of Corruption,” July 28, 2002.
115 BusinessWeek, “Online Gaming: Korea’s Gotta Have it,” September 11, 2006, http://www.businessweek
.com/magazine/content/06_37/b4000070.htm, accessed December 22, 2007.
116 Suh-kyung Yoon, “South Korea—Swept Up on a Wave: What’s Hipper than Japanese Rock and Cooler
than Canto-pop?” Far Eastern Economic Review, October 18, 2001.
117 The Korea Herald, “Korean Pop Culture Spreads beyond Asia (2): Hallyu has multiple elements that could
cater to diverse local needs and contexts,” August 2, 2007.
118 Korean Ministry of Culture and Tourism, “Seoul to Make Hallyu Map to Entice Tourists,” Issue Link,
January 14, 2007, http://www.mct.go.kr/english/issue/issuelink_view.jsp, accessed September 24, 2007.
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Korean Ministry of Culture and Tourism, “Korea to Pour Massive Funds into Film Industry,” Issue Link,
January 27, 2006, http://www.mct.go.kr/english/issue/issuelink_view.jsp, accessed September 24, 2007.
120 International Federation of Phonographic Industry, IFPI 2007 Recording Industry in Numbers, p. 51.
121 Japanese Economy Division, “‘Cool Japan’s Economy Warms Up,” Japan External Trade Organization
(JETRO), Tokyo, March 2005, p. 5.
122 Mobile Content Forum, “The Market Size of Mobile-Related Contents 2006,” July 24, 2007,
http://www.jasrac.or.jp/profile/copyright/index.html, accessed October 17, 2007.
123 Naoki Sekine, “The Music Business in Asia,” p. 217.
124 Ren Yanli, “Secrets of Japanese Drama Production: The Trend Setter of Popular Culture,” September 11,
2007, http://enjoy.eastday.com/e/20070911/u1a3101138.html, accessed October 18, 2007.
125 Naoki Sekine, “The Music Business in Asia,” pp. 215–216.
126 Casewriter’s interview with Steve McClure, Asia bureau chief of the New York-based music-industry
magazine Billboard, December 21, 2007
127 Naoki Sekine, “The Music Business in Asia,” pp. 215–216.
128 International Federation of Phonographic Industry, IFPI 2007 Recording Industry in Numbers, p. 51.
129 Akira Takeishi and Kyoung-Joo Lee, “Divergent Paths of Mobile Innovation: Development of Mobile
Music Business in Japan and Korea,” April 28, 2005, Institute of Innovation Research, Hitotsubashi University,
Tokyo, Japan, pp. 5-6.
130 Leslie Evans, “The Battle for the Global Entertainment Industry: Japan’s Growing Strength in Digital
culture,” University of California in Los Angeles International Institute, January 17, 2003,
http://www.international.ucla.edu/article.asp? parentid=2931, accessed October 14, 2007.
131 Japanese Economy Division, “Japan’s Music Industry,” Japan External Trade Organization, Tokyo, April
2004, p. 3. www.jetro.go.jp/en/market/report/pdf/2004_28_r.pdf, accessed October 18, 2007.
132 Casewriter’s calculation, based on the company’s annual sales $869 million for the fiscal year ended
march 2007, and the industry’s total sales at $5,463 million, from PricewaterhouseCoopers.
133 Casewriter’s correspondence with Daniel DiCicco, president of BMG Japan, August 26, 2008.
134 Steve McClure, “Copy Control Fades in Japan,” Billboard 116, no. 42, October 16, 2004, p. 41.
135 Casewriter’s correspondence with Daniel DiCicco.
136 Casewriter’s correspondence with Daniel DiCicco.
137 Naoki Sekine, “The Music Business in Asia,” p. 216.
138 Naoki Sekine, “The Music Business in Asia,” p. 216.
139 Casewriter’s correspondence with Daniel DiCicco.
140 International Federation of Phonographic Industry, IFPI 2007 Recording Industry in Numbers, p. 47.
141 Casewriter correspondence with Daniel DiCicco, president of BMG Japan, August 26, 2008.
142 Kevin Zimmerman, “Entertainment and Media Outlook: Gaining Momentum,” report summary of Global
Entertainment and Media Outlook: 2006–2010, PricewaterhouseCoopers. http://www.pwc.com/extweb/
pwcpublications.nsf/docid/C987CEB2D179131F852572090083B4B3/$FILE/GlobalOverview_kz2.pdf, accessed
October 15, 2007.
143 The SARFT revealed that by 2005, there were still 36 state-own film production units in China.
http://gdtj.chinasarft.gov.cn/Tiaomu.aspx?DocId=531, accessed October 5, 2007.
144 Michael Primont, “One Exec's View from Beijing,” Billboard 112, no. 48; p. 70, Nov 25, 2000. For instance,
up until 1998, there were more than 230 state-owned record labels. But by 2000, after a government ordered
consolidation, the number was down to 30 and counting.
145 SinoCast China Business Daily News, “China to Push Development of Cultural Industries,” September 15,
2006, p. 1, via ProQuest, ABI/Inform.
146 Ren Yanli, “Stars and Their Agencies, Complementors or Competitors?” East Day News, May 11, 2007,
http://enjoy.eastday.com/e/20070511/u1a2823245.html, accessed October 2, 2007.
147 Michael Primont, “One Exec's View from Beijing.”
148 Ren Yanli, “Stars and Their Agencies.”
149 Casewriter’s interview with Shen Li-hui, Founder and CEO of Modern Sky, December 17, 2007.
150 Chen Jie, “Chinese Pop Finds Its Voice,” China Daily (North American Edition), October 9, 2003.
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Michael Primont, “One Exec's View from Beijing.”
International Federation of Phonographic Industry, The Recording Industry 2006 Piracy Report, p. 11.
153 Game Daily Biz, “Report: China’s Video Game market to Reach $2.1 Billion in 2010,” April 25, 2006,
http://biz.gamedaily.com/industry/feature/?id=12513, accessed October 12, 2007.
154 Steven Schwankert, “Fighting Fire with Fire,” Billboard 115, no. 31, August 2, 2003.
155 Susan Butler, “China Breaking Through,” Billboard 118, no. 21, May 27, 2006.
156 Casewriter’s interview with Michael LoJudice, General Manager of Modern Sky’s U.S. Operation,
December 17, 2007.
157 Casewriter’s interview with Shen Li-hui, Founder and CEO of Modern Sky, December 17, 2007.
158 Ben Sisario, “For All the Rock in China,” and casewriter’s Interview with Michael LoJudice.
159 Ben Sisario, “For All the Rock in China.”
160 Nyay Bhushan, Steve McClure, Mark Russell, “Meet the Miracle Markets,” p. 15.
161 Nyay Bhushan, Steve McClure, Mark Russell, “Meet the Miracle Markets.”
162 Tim Culpan, “Yahoo’s China Problem,” Billboard 118, no. 10, March 11, 2006, p. 5.
163 Geoffrey A. Fowler and Andrew Batson, “Music Companies Lose Suit Against Baidu.com in Beijing,”
Wall Street Journal (Eastern edition), Nov 18, 2006. p. A7. In January 2007, EMI surprised many in the Asian music
business by announcing that it was joining forces with Baidu to launch an advertising-supported online music
streaming service in China. EMI subsequently dropped out of the suit.
164 Steve McClure, “Deep Cover,” Billboard, Vol. 119, no. 19, May 12, 2007, p. 21.
152
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