The “BTS Effect” on South Korea’s Economy, Industry and Culture
South Korea should be proud of BTS who are bringing so much impact.
2024 Update: More data added
Global artist BTS is breaking barriers and records around the world proving their status as the current biggest boy band in the world. They have grabbed number one spots in official music charts in USA, UK, Japan, Germany, France, Australia, Canada etc. They are among the best-performing artists in terms of sales and streams. They have been named IFPI’s “Global Recording Artist of the Year” multiple times. Looking at their awards and honors, they are also among the most awarded artists in history. They performed (and are still performing) in the biggest stadiums that hold important historical moments in music. Outside music, they used their global popularity to launch the “Love Myself” global campaign to fight against violence. Their humanitarian work allowed them to give a speech at the United Nations (they have attended the UNGA multiple times). They are making unprecedented history as Asians and as artists.
With the passage of time, analysts have been noticing that BTS’s impact is not only restricted to music and humanitarian work, but it is also positively influencing their own homeland and culture worldwide. Several institutes have provided data and results that indicate that the “BTS Effect” is contributing to South Korea in terms of culture, economy and industry in the following major points:
Economic Effect of More than 5.5 Trillion Won per Year
On December 2018, the Hyundai Research Institute (HRI) reported (check the original Korean report here) that BTS generates an estimated amount of 4 trillion won ($3.54 billion) as economic value to the country per year and 1.42 trillion won ($1.26 billion) as added value per year. According to Statista’s analysis of 2018 company revenues report, BTS’ contribution to South Korea’s GDP is almost comparable with Korean Air.
According to an updated report in 2019, the overall economic effect of BTS is 5.56 trillion won per year to South Korea which is around $4.9 billion (as of 2019).
What many don’t realize is that this is an impressive contribution since no Korean artist has brought such a huge economic effect in South Korea. Korean artist Psy brought an economic value of 1 trillion won with his song “Gangnam Style” that time while Korean actor Bae Yong Joon brought an economic value of around 3 trillion won (US$2.72 billion) with his drama “Winter Sonata” that time. The fact BTS managed to surpass them is mind-blogging.
HRI predicted that BTS’s 10-year economic impact will reach 56.2 trillion won ($49.8 billion). This number will easily surpass the PyeongChang Winter Olympics 2018 which reached 41.6 trillion won. They also predicted that BTS would have generated an economic value of 41.8 trillion won in the 2014–2023 period.
Economic Effect Through Concerts
According to an academic report, BTS was responsible for creating an economic effect of 481.3 billion won from the “BTS 5th Muster (Magic Shop)” concerts alone which were held in Busan and Seoul on June 2019 (135.5 billion won from the concerts in Busan and 345.8 billion won from concerts in Seoul). For Busan and Seoul, this is equal to the 1.6% and 0.9% of the two cities’ GDP in 2018 respectively.
On October 2019, BTS’s three-day finale at the Olympic Stadium in Seoul (from the “Love Yourself: Speak Yourself” Tour) generated an economic effect of 1 trillion won ($860.7 million) while 187,000 foreigners traveled to South Korea on the occasion of the concerts. This figure accounted for about 67% of the 280,000 tourists who visited South Korea during the 2018 PyeongChang Winter Olympics.
BTS’s economic impact on London in 2019 was roughly estimated to be 100 billion won ($84 million) due to their 2 sold out shows at Wembley Stadium. The economic impact of the BTS concert series in SoFi Stadium, Los Angeles in 2021 was predicted to be more than $100 million.
Local businesses in other countries also gain benefits from BTS e.g. there is an increase of trend for apartment rentals and home stays when millions of fans from around 80 countries travel to attend BTS’s worldwide concerts.
In 2022, the Korea Culture & Tourism Institute reported that if BTS holds a concert in South Korea in the “post-COVID” era, the economic effect will reach around 619.7 billion won to 1.2207 trillion won per concert. If there are 10 concerts, then those will bring an economic effect of up to 12.2068 trillion won.
Economic Effect by “Dynamite” at first place in Hot 100
A joint report was done by South Korea’s Ministry of Culture, Sports and Tourism and Korea Culture and Tourism Institute in 2020 to estimate the economic impact of BTS’ entry at #1 in Billboard Hot 100 with “Dynamite”. They estimated an economic effect of ₩1.7 trillion with ₩1.23 trillion in production sector and ₩480 billion in added value. 7,928 more jobs were also estimated to be created by Dynamite’s entry at #1 in the Hot 100 chart. This is the estimated economic impact of one song on the Hot 100 chart.
Increase of Tourism
According to HRI, 796,000 foreigners visit South Korea annually because of BTS, promoting the local tourism industry. Out of the 10.41 million people, 7.6% of the visits in 2017 were influenced by the Korean group. HRI also stated that one in every thirteen foreign tourists visited South Korea in 2017 thanks to BTS.
Before BTS, 650,000 tourists visited the Nami Island in Chuncheon in 2002 after “Winter Sonata” was broadcasted (Nami Island is one of the filming sites). The drama also brought 840 billion won in tourism that time. Psy’s “Gangnam Style” also helped in boosting tourism in 2012 (unfortunately, there is no official data to show how much influence he brought).
The Seoul Metropolitan Government gave credit to BTS in helping recover the Seoul’s tourism industry which was negatively affected by the THAAD ban. The Korea Tourism Organization even conducted a survey on the most popular spots in South Korea where the top five locations selected were BTS-related places.
It is rare for any country to have a boost in the tourism industry contributed by a specific group of people rather than sights or events.
Increase of South Korea’s Consumer Good Exports
On December 2018, HRI also revealed that BTS is responsible for contributing $1.1 billion (1.7%) to the total Korean consumer goods export which was $65.2 billion in 2017. 1.7% is a big percentage being contributed by just one Korean artist alone. Another reason why this is huge is because export goods such as cosmetics, food, clothing (where BTS had a compelling impact) are considered popular exports in South Korea.
According to a report in 2019, BTS has an annual effect on the following consumer goods per year: Clothing = $2.026 billion, Cosmetics = $2.8 billion, and food = $3.96 billion.
In the car industry, BTS were the global ambassadors of Hyundai Motor’s SUV “Palisade”. According to SM2 Networks, Hyundai Motor received 600 billion won ($504 million) in promotional results from the collaboration with the group, proving the power of the “BTS Effect”.
Increase of South Korea’s BOP
The Bank of Korea Economic Statistics System stated that South Korea’s BOP (balance of payments which is the total economic transactions between a country and the world) for music and entertainment reached $114.7 million in the first quarter of 2019 due to 2 main reasons: the improved relationship between China and South Korea and the global success of BTS.
What’s interesting is that this is the highest BOP surplus recorded since the third quarter of 2016 which was recorded at $132.4 million. The fact BTS contributed in improving the BOP surplus is remarkable.
Improvement of Investment Stocks for Entertainment Agencies
When China imposed the THAAD ban in 2016, the stocks of entertainment companies were badly affected because China is one of the the top countries for Korean entertainment in terms of investment and export. Thanks to BTS, the investment stocks of the entertainment companies improved and they are focusing on the American and European markets.
The Growth of Korean Hallyu Wave
According to a government-affiliated Korea Foundation, it was reported that BTS lead a 22% increase of Korean Hallyu fans worldwide in 2018 (Korean Hallyu means the increase in popularity of Korean music, films, TV shows and language).
The Hallyu White Paper 2018 Report stated that the K-Pop exports in North America nearly doubled (due to the 94% increase year on year), indicating that the success of BTS accelerated the growth in the North American market. Sales also showed growth in Europe (25.5%), Southeast Asia (37.8%) and other regions in South America (18%). The KOFICE Global Hallyu Trends 2020 report said that in the US, positive responses to Hallyu increased between 2016 and 2018 due to BTS’ success in the US market. The overseas K-pop fandom greatly expanded and surpassed the domestic fandom in terms of scale after BTS’ success.
It’s natural that through BTS, who is the biggest band in the world, people are taking interest in Korean culture such as Korean shows, dramas, food and the Korean language.
Speaking of Korean language and culture…..
Promoter of Korean Language & Culture
The World Economic Forum (an international forum for powerful business leaders, international political leaders, top economists etc.) made a special report where they talked about BTS and globalization. BTS’s global success is going against the “cultural odds” because (1) American culture is the main “global” culture around the world (making English the global language) and (2) Korean is not even in the top 10 of the world’s most spoken languages, making their success even more astonishing. BTS are showcasing their Korean culture and language worldwide through their music and ideas fighting against all odds.
According to the National Gugak Center, there was also an increase in demand and interest for Korean traditional sounds resulting in the introduction of sounds of 50 more instruments. This was due to the live performance of BTS’s worldwide hit song “IDOL” at the Melon Music Awards 2018 where they fused traditional Korean sounds with the song attracting both local and global audiences.
The civic group Nation’s People Preserving the Korean Language chose BTS as the “Top Promoter of the Korean Language” of 2018 for promoting and increasing the interest of the Korean language around the world.
On the 600th anniversary of King Sejong’s accession to the throne and the 572nd Hangul Proclamation Day, the city of Seoul and Korea Local Industrial Culture Association chose BTS as the recipient of the “Sejong Best Korean” award for promoting Hangul worldwide.
BTS also received a letter of appreciation from the government during Hanbok Culture Week 2019 for promoting hanbok (Korean traditional clothing) around the world.
In 2021, BTS, South Korea’s First Lady Kim Jung-sook and Culture Minister Hwang Hee presented a set of 5 richly colored lacquer vessels entitled “Rhythm of the Five Color Luster” by contemporary lacquer artist Chung Haecho as a gift from the South Korean Government to the Metropolitan Museum of Art to promote Korean culture.
The Verdict
So we can see that it is rare for a single Korean artist to make such an impact on the economy, industry and culture of a nation. Looking at the confirmed data, it is no surprise that BTS is South Korea’s national treasure and pride who is bringing positive influence with authenticity and sincerity.
BTS’s popularity is growing day by day so it will be interesting to see how higher the “BTS Effect” will go in future.
Music related records can be made or broken but it is rare to find someone (not to mention an artist) helping a country’s economy and culture at this level.
