[Lee Jong-woo's Economic Reading] Japanese Culture That Spread Before Hallyu... Lessons from Their Rise and Fall

Japanese Woodblock Prints Made a Big Impact in 19th Century Europe
Mid-20th Century Popularity in US Film and Music Markets Declined Sharply Since the 1980s
Hallyu, BTS, and Bong Joon-ho Are Hot Topics but Eventual Decline Is Inevitable
Japan Turned to Animation as Competitiveness Weakened in the US Market
Korea’s Webtoon Market Is Strong, but Games and Cosmetics Need Reorganization

The history of Ilryu (日流) is long. Looking back, it dates as far as the 19th century.

In 1867, Japanese ukiyo-e woodblock prints were exhibited at the Paris Exposition Universelle. These prints depicted scenes of Japanese daily life and landscapes, causing a tremendous impact on European society. The art movement known as 'Japonisme' was largely shaped through these prints. Ukiyo-e prints became widely known in the European art world as Japanese folk crafts flooded into Europe. The prints were bundled and used as cushioning material to protect ceramics from breaking, which caught the attention of Impressionist painters like F?lix Bracquemond, Manet, and Degas, who incorporated ukiyo-e elements into their styles. Traces of this influence can still be found in Van Gogh’s works today.

In 1963, a Japanese singer named Sakamoto Kyu’s song "Sukiyaki" topped the US Billboard charts. Not just any chart, but the 'Hot 100' chart, which ranks all singles. The original title was "Ue o Muite Aruk? (上を向いて?こう)" but since it was difficult to pronounce, the US market named it after the then-popular Japanese dish "Sukiyaki." This was a sign of how far Japanese culture had penetrated globally ahead of the Tokyo Olympics. The craze for Japanese music waned after the 1970s duo Pink Lady, but traces of it remain in various places today.

Films and dramas followed a similar pattern. The 1954 Japanese film "Seven Samurai" was remade six years later in Hollywood as "The Magnificent Seven," gaining huge popularity. Japanese dramas were introduced in the 1990s as trendy dramas depicting young people’s lives and love stories. The Korean drama "Jealousy," starring Choi Soo-jong and Choi Jin-sil, was modeled after this style. The seemingly eternal Ilryu (日流) began to weaken from the mid-1980s.

Expectations for Hallyu (the Korean Wave) are rising again. This is due to the anticipated lifting of the Hallyu ban (Hanhanryeong) imposed during the deployment of the Terminal High Altitude Area Defense (THAAD) system, coinciding with President Xi Jinping’s visit in the first half of the year, which is expected to resume Hallyu’s entry into China. Considering that South Korea’s exports of personal, cultural, and leisure services, which reached $1.13 billion in 2016, dropped to $770 million in 2017 due to the Hallyu ban, it is natural that expectations for Xi Jinping’s visit are high. Additionally, while the breadth of Hallyu has narrowed, its depth has deepened. Until a few years ago, Hallyu was sustained by idol singers and dramas, but as similar content was mass-produced, it became stale. Now, even if new forms emerge, they struggle to exert the same influence as before. Instead, BTS’s achievement of ranking first on the Billboard 200 main album chart in April last year marked a leap forward. The film Parasite winning the Palme d’Or and challenging the Academy Awards is another example of this deepening.

Although the quality has improved, it will be difficult to avoid the weakening of Hallyu in the future. As seen with ukiyo-e woodblock prints and Sukiyaki, Japanese cultural dissemination surpassed Hallyu in terms of time and intensity. Japan’s economic status also greatly supported the spread of Ilryu. However, even these favorable conditions could not overcome changes in people’s tastes. The only entity that overcame this barrier was Hollywood in the US, which had the ability to change people’s preferences on its own.

So how should we prepare for the weakening of Hallyu?

Japan found a breakthrough by identifying areas within its cultural content that were more competitive than the US. The chosen field was Japanimation, or Japanese animation. Since the 1960s with "Tiger Mask" and "Astro Boy," Japan has maintained a dominant position. The nurturing of Japanese animation culminated in 2001 with "Spirited Away" becoming the highest-grossing film in Japanese history.

We should also consider the webtoon industry. The domestic webtoon market size was about 210 billion KRW in 2014 and has now grown to the trillion KRW level. This estimate only accounts for the primary market of webtoons; when including secondary and tertiary markets such as films, dramas, and character merchandise, the scale is much larger. Considering that films like "Along with the Gods" and "Steel Rain," which attracted over 12 million viewers, were based on webtoons, one can gauge the extent of their influence.

The rapid growth of the webtoon market is due to changes in comic consumption patterns. The shift from offline formats like books and magazines to online subscriptions via smartphones has expanded the consumer base. Comics, once perceived as exclusive to teenagers, now have a higher average subscriber age and more diverse gender demographics, similar to how mobile games have developed with people in their 30s and 40s becoming the core consumers.

Another area is gaming. In the early 2000s, Korean online games dominated the world. In 2014, game exports were 11 times those of K-pop and 132 times those of films. However, the gaming industry has since stagnated. Domestic game companies have repeatedly attempted to enter overseas markets but failed due to lack of planning and strategy. Policy has also been inconsistent, sometimes praising games as cultural content leaders and other times condemning them as harmful to youth. Currently, the industry is losing ground to China, but given its size, larger than any other cultural sector, promotion policies are necessary.

Industries like cosmetics, which grew with Hallyu in the late 2000s, also need restructuring. At that time, Korean cosmetic companies profited greatly in China due to the weakness of Chinese domestic companies. Now, with the rise in quality of Chinese cosmetics, it has become difficult to operate in China unless Korean products become global brands. Efforts to develop better products and brand power are needed.

Korea is one of the few countries where domestic films account for more than 50% of the film market. The number of dramas produced is also higher than any other country. This means Korea has many powerful contents. The goal of Hallyu as an industry is to enhance the value of the Korean brand. The government’s role is significant in this, and only through an organic cooperative system between the private sector and government can Hallyu establish a more solid footing.