[Indonesia Hallyu②] Polaris Lighting the Export Path "Find Your Direction"

Kim Young-su, Head of KOCCA Indonesia Business Center, Facilitates Negotiations and Exchanges through Consulting
Acts as a Bridge with Concrete Strategies: "Forming a Council of Content Companies and Management"
"Long-term Strategy and Consistent Efforts Are Key to Achieving Optimal Results"

Overseas expansion for content companies is no easy task. Unexpected obstacles unrelated to competitiveness lurk everywhere. Local laws (commercial law, tax law, labor law, corporate accounting standards), industrial policies (service standards, requirements, guidelines), market information by genre, and cultural and religious codes by region... Only a few companies have deep expertise. Due to limited resources, small businesses lack the capacity to find and analyze information. They often face difficulties when they encounter local regulations, laws, and taboos belatedly. The Korea Legislation Research Institute, the National Assembly Library, and the Korea Trade-Investment Promotion Agency provide information on overseas laws and regulations, but these are not specialized for content. Regular monitoring and updates are also hard to expect.

Indonesia is particularly strict about issuing work visas. Applications are not possible without a local sponsor. If caught working on a tourist visa, one faces fines up to 500 million rupiah (approximately 41.55 million KRW) or imprisonment for up to five years for violating immigration law. More frequent issues involve fraud disguised as K-pop concerts or fan meetings. Some promoters unilaterally postpone performances and abscond with ticket revenues. Management companies, which find it difficult to verify details thoroughly, are powerless against such scams.

There are also frequent cases where content exports are canceled due to religious issues. Videos showing pork consumption are a representative example. Indonesia guarantees freedom of religion, but 87% of its population is Muslim. Even today, rural villages strictly avoid pork. In the case of animation, voice actors cannot be used unless it is an educational program. The government encourages the use of subtitles to protect intellectual property (IP).

The Korea Creative Content Agency’s Indonesia Business Center is virtually the only institution supporting local market entry for content companies. Through online and offline consulting support, it facilitates smooth negotiations and exchanges. It collects extensive industry information and builds alliances with local partners, achieving various results this year as well. These include establishing 'Korea 360,' business matching, supporting the G20 Culture Ministers’ Meeting, and hosting the 'On the K: Assemble' performance.

On the 5th, the 'K-Broadcasting Showcase in Indonesia' was also held. Twelve content companies, including KBS, MBC, EBS, SLL, CJ ENM, Iconix, The Pinkfong Company, and 2PM, participated in this export consultation event. It provided a platform to promote IP to local companies and sign memorandums of understanding (MOUs). Kim Young-soo, the center director, stated, "Domestic content companies have focused mainly on high-priced exports to North America, China, and Japan, so we wanted to open new avenues."

Next year, the center will serve as a bridge with a more concrete strategy. The most focused project is forming a consultative body involving small and medium content companies and entertainment management firms. Director Kim said, "Concert and fan meeting fraud not only harms artists and management companies but also dampens local fans’ enthusiasm, weakens K-pop, and damages the national image. We will verify promoter integrity one by one and minimize risks through customized consulting related to law, taxation, and marketing." He added, "We will compile a kind of manual covering local information to prevent any issues from escalating into diplomatic problems."

The reason for maintaining vigilance is that next year marks the 50th anniversary of diplomatic relations between Korea and Indonesia. Cultural exchanges and events are expected to increase significantly compared to previous years, making proactive responses important. The overseas expansion of content companies is no different. With COVID-19 restrictions eased and steady growth in demand for K-content, exchanges are expected to become more frequent.

It is rare for contracts to be finalized within a month or two. Most local companies take about a year to review and present specific conditions. Content companies that are desperate for immediate profits often fail to secure contracts or end up selling content at low prices. For example, animation company A sold fifty-two episodes to local broadcaster B for $300 (approximately 390,000 KRW) per episode. Of course, dramas and variety shows tend to have better terms if they guarantee certain viewership ratings.

Director Kim advised, "It is essential to carefully review the financial status of local partners, contract cases with domestic companies, and market information, and to approach cautiously. If you establish a long-term strategy of six months to a year and consistently pursue it, you can achieve the best results."