Monthly Hallyu Report. Global Hallyu Issue

Transcription

1 Monthly Hallyu Report Global Hallyu Issue April 2017

2 Hallyu Issue Summary of Global Hallyu Issue, Edition # 131 By the constant "Prohibition Order of Hallyu" in China, Hallyu-oriented enterprises in South Korea are focusing on "Post-China" strategies. Global Hallyu Issue carried out an in-depth diagnosis by region referred to as "Post-China". Followed by the main issue on Southeast Asia of the February Edition, this April Edition analyzed the current status of Hallyu in Japan focusing on K-Pop. Though there are some tangible and intangible restrictions of Korean contents in Japan due to political and diplomatic conflicts between the two countries, the greatest export market of Hallyu is still Japan. We inquired into entertainment companies that focus again on Japan distancing from China as well as expansion strategy of K-Pop, which is evolving in tune with local music market of Japan. Post-China strategies of Hallyu: Toward Japan With the warning sign in the Chinese market, one of the key markets of Hallyu, companies relevant to K-Pop are now shifting their sights to Japan. Undoubtedly, Japan is an attractive market to which Korean music industry cannot help but pay attention to. However, it is time for Korean companies to establish differentiated expansion strategies in accordance with the change of paradigm of Hallyu consumption in Japan.

3 Inquiry into K-Pop focusing on Japan and the changing music consumption trends in Japan as well as K-Pop expansion strategies in evolution 1) K-Pop which lost its way... toward Japan again? Chang Gyu-soo (Director of Entertainment Industry Research Institute) 2) Changes of paradigm in Hallyu consumption in Japan Hando Chizuko (Instructor of the Korean language at Tokyo Ferris University, Correspondent of KOFICE) 3) Key K-Pop strategy for Japan: "Multi-marketability" and "Self-directed attraction" Seo Byeong-gi (Senior staff writer specialized in Popular Culture, Herald Business)

4 K-Pop which lost its way... toward Japan again? Chang Gyu-soo (Director of Entertainment Industry Research Institute) In 2012, conflicts arose between Japan and Korea from the Dokdo issue, and political tensions were associated with cultural sanctions causing difficulties for Hallyu in Japan. However, in 2013, Hallyu reflourished when the television series "My love from the Star" made it big time in China via Internet services. Hallyu consumption rapidly grew through online video sites such as Youku, Tudou and Iqiyi, as well as social media, diverse wired and wireless Internet services. Also, some contracts of K-Pop distribution in China were signed, raising the expectations for Hallyu in China. But the expectation of expansion of K-Pop in China only was short-lived as China quickly executed cultural sanctions, the so-called "Prohibition Order of Hallyu" as a reprisal action on THAAD deployment in South Korea, during the latter half of the year So much for all our plans! 'Prohibition Order of Hallyu" of China, this is not the first time though China, with a socialist system, and a sole political party system, is a market that is not based on a free competition system. The same happens with cultural industry, therefore, we should not overlook that China is completely different from other countries in terms of overseas expansion of Hallyu when it comes to economy, culture, policy and ideology. In October of 2000, when Hallyu was rapidly spreading in China and Korean popular music and singers dynamically penetrated into the Chinese market, the Hallyu concerts scheduled to be held in Beijing and Shanghai floundered because of sanctions against Korean popular culture inflow, imposed by the Chinese government. Since then, no concert of Korean singers was allowed for years until 2004, when the Korea-China joint concert, where Ahn Jae-wook and Baby V.O.X. participated, was held in celebration of China's hosting of the Beijing Olympic Games. The Chinese government s discontent over the imbalance of Korea-China cultural exchanges finally decided to make a forcible suspension of the inflow of Hallyu into China. For this reason, the "Prohibition Order of Hallyu" in retaliation to THAAD deployment is possibly nothing but a natural reaction as an excuse for preventing the further spread of Hallyu in China, which has been considered an eyesore. On the other hand, as Hallyu contents started to make a rapid influx in China through digital media, the Chinese government began modifying and regulating the law regarding wired and wireless internet services. Nonetheless, many Chinese companies invested in Hallyu content production and even set up local branches in Korea, making a strong pitch for Korean content

5 production. This might have been a very embarrassing situation for the Chinese government. To name a few, "Huayi Brothers", recognized as China's greatest entertainment company started to take over entertainment companies listed on the KOSDAQ and invested in them, while "Yuehua Enterainment" listed on the CHASDAQ of China established a branch company in Korea and produced Korean-style Idol groups, promptly bringing the Chinese capital into the Korean market in conjunction with the Chinese companies, the same way as Japanese capital and companies invested in Korean cultural companies in the past. The greatest consumer of Hallyu is indisputably Japan, the country of highly developed music market Contrary to what the media noisily reported, even when the Hallyu phenomenon was strong in China due to the drama "My love from the star", most of Korea's culture-oriented companies were very active in the inroads into Japan. It is because it is difficult for China to withdraw profits due to illegal reproduction and distribution in spite of the big consumer population in the country. On the other hand, revenue creation is easy in Japan because powerful copyright law is in effect and the large-scale paid consumer market is well established. This information can be also obtained through current status of amount of export of Korean music by each overseas region. According to the information of the amount of export to Japan and China of 2015, Japan ranked number one and China, number two by registering 63.6% and 23.6% respectively. However, the difference of importance between the two countries is really big and the amount of export shows a great gap as well. While the amount of export to Japan was 242,370 thousand dollars, that of export to China was only 52,798 thousand dollars even though it increased by 70% compared with the previous year (Korea Creative Content Agency, White Paper of Music Industry 2016). In other words, in spite of the rapid growth of the amount of exports to China, the export scale to Japan is three times larger than to China. = Moreover, even though the Chinese population is boastful of a large scale by 10 times bigger than Japan, the K-Pop paid consumer market of China does not even reach the Japanese one by half. Some expect that the paid content market of China will increase, but personally, I do not see it very positively. It is because China is composed of a huge population with 56 ethnic groups, and it is hard to be considered a country with the possibility of changes happening overnight. As we can see from the case of "Prohibition Order of Hallyu", the gateway to the Chinese market can close all of a

6 sudden. In particular, as a country to export Hallyu contents, the environment of Japan is completely different from that of China. While Japan has a cultural environment that has progressed further than our country, China still lags in terms of cultural development. In particular, there is a huge gap among regions and classes, for this reason, it is quite difficult to view China as one country or one market. On the other hand, in Japan, cultural consumption is dynamic in the sense that they have active consumption behavior based on burdenless choice without showing passive attitude inclined to a concept of cultural imperialism. Three reasons why K-Pop cannot help but focus on Japan Then what are the attractive factors for music market of Japan? Firstly, Japan has a mature market with about twentyfold scale compared with Korea since the country has established the genre of J-Pop much earlier than us. In front of the situation, K-Pop producers are actively targeting the Japanese market supplied with long-standing affinity with Hallyu and stability. Secondly, Japan enforces powerful copyright laws of world-class level, therefore, illegal distribution hardly occurs. Anyone caught violating the copyright laws can be sent to jail for up to 10 years or fined up to 10 million yen. Also, both punishments can be imposed at the same time. In effect, in August of 2009, Kyoto District Court sentenced a person, who sold a game illegally copied, to imprisonment of 2 and half years, and a penalty of 2 million yen as well as additional collection charges of 7.1 million yen. Like this, the infringement of copyright laws is severely punished equivalent to the level of theft (larceny). The strong enforcement of copyright laws is keenly important in the sense that it is connected with album purchases, concert visits and formation of mania groups enabling constant fandom business. Lastly, considering that there are active businesses of production and distribution by field backed up by music consumption of diverse genres, Japan excels in being an attractive music market. Apart from some factors previously observed, the recent trends of cultural industry imply that K-Pop should focus on the Japanese market. It is because there is a clear emergence of the movement of Korea-related companies intending to seek a breakthrough in the middle of this rigid Chinese market and the current situation. In case of China, many concerts of Korean singers in China have been viewed with disapproval since last October with the "Prohibition Order of Hallyu", and there has been a complete absence of large-scale concerts or fan meetings this year. There is no statistic for the amount of exports of domestic music industry of last year yet, but it is estimated that the amount of export to China did not make a rapid rise compared with that of Japan, due to

7 Prohibition Order of Hallyu. On the other hand, starting from last year, the whole scale of cultural industry of Japan held the second rank followed by China, but Japan is still winning the third place. Japan shows positive aspects in the sense that there are still active concerts of many Korean singers including Big Bang, BTS, Super Junior, GOT7 and Kim Bum-soo, and their popularity is steady in the off-line music market as well. On the other hand, some sanctions of broadcasting program restrictions still exist due to Korea-Japan political issues. However, at the end of 2015, Boa reappeared in "FNS Music Festival" 4 years after the silence and last year, Big Bang made an appearance in "Music Station" 3 and a half years after the silence registering the audience rating up to 20%. This situation seems to show signs of recovery. Along with the recommencement of appearances of K-Pop artists in music programs in Japan, there are constant movements of album sales, music file downloads, concerts and fan meetings, showing a positive outlook for the future. For this reason, Korean music market should stop running about in confusion between Japan and China, and draw up industrial strategies, based on careful analysis, toward Japan, which is not only the main area of consumption of Hallyu contents, but also the area for the creation of profits. KOFICE NOTE The potentialities of music market of Japan and changes of consumption trends 1) A colossal music market with the world's second largest scale - The Japanese music market is a colossal market ranking No. 2 in the world, with the scale of 4.6 billion and 15 million dollars (as of 2015), followed by USA (Korea Creative Content Agency, White Paper of Music Industry 2016). - One of the reasons of the maintenance of this big scale of the Japanese music market can be found from the rapid growth of digital music market. The music market is largely divided into a record market and a digital market. In Japan, the scale of record market holds about 62.5% equivalent to the scale of 2.8 billion and 84 million dollars. In fact, this scale is the reduced figure by 2.9% over last year. In the stream of global trends, the decrease of record market is also clear in Japan. However, Japan is swiftly transforming into a digital market too. The real digital market of Japan is on the rapid rise by about 13.8%. In particular, with the entry of global enterprises including LINE Music, Apple Music, Google and Amazon into Japan in 2011, the digital streaming music market is burgeoning.

8 2) Growth of Live concert market - Additionally, the Japanese music market features the growing trends of music concert market. The scale of concert market of 2015 increased by 6.5% registering 1 billion and 92 million dollars over last year. For a while, the concert market decreased with market contractions due to the cancelation of concerts of overseas singers and reduction of local visitors due to the recession. However, there are signs of activation because the Japanese economy is underway, showing positive estimation of constant growth. - In particular, it is predicted that Live concert market will rank No. 2 by 2019, followed by the off-line market among the totality of the music market in Japan. In tune with such trends, K-Pop industry is expected to have success since most of entry method into Japan is composed of live concerts. 3) Fusion of technology and concert, Live viewing - In the middle of active concert market, the emergence of "Live viewing", a new K-content allowing enjoyment of performances without visiting the concert hall, attracts our attention. This "Live viewing" is a new form of content allowing the vivid enjoyment of concerts and plays (theatricals) through a large-scale screen at movie theaters of different regions in Japan. - While the performances of Korean artists are gaining popularity in Japan, K-Pop performance videos through Live viewing are loved by local fans. The recent contents played in local screens include "Gaon Chart K-Pop Awards", which settled as the most representative K-Pop award, "Osaka Kyocera Dome Encore performance" by Big Bang, the leading K-Pop star and "2016 MAMA" representing Asian music festival.

9 Changes of paradigm in Hallyu consumption in Japan Hando Chizuko (Instructor of the Korean language at Tokyo Ferris University, Correspondent of KOFICE) It is indisputable that Japan is an important market of Hallyu, in particular, K-Pop, not only in the past but also at present. In particular, due to the warning sign in the Chinese market, which used to be one of the key markets of Hallyu for many years, as well as stable demand and high profitability of the Japanese music market, K-Pop which got lost seems to direct its eyes to Japan. Then in what situation is Japan in at present, as a Hallyu market? Upon the opportunity of the visit of President Lee Myung-bak to Dokdo Island in 2012, the deteriorated Korea-Japan relations seemed to have found the clue to the solution by reaching an agreement on the problem of "former comfort women" at the end of Nonetheless, the bilateral conflicting relations are exacerbated by the statue of a comfort girl erected in front of the Japanese Consulate in Busan. The event was anomalous to such an extent as that the Japanese embassador in Korea was recalled to Japan and was absent for 3 months. Then, it is time to ask this: To what degree is Hallyu influenced by political and diplomatic problems? The program "Han Love (Korea Love)" which gained absolute popularity from local K-Pop fans finally ended in September of 2015, five and a half years after it was first broadcast on Channel BS 11. The MC of the program, Furuya Masanobu was greatly loved by K-Pop fans of Japan, by his easy explanation of information on the latest Korean songs. The fact that the local program, which had been receiving steady love from Hallyu fans of Japan for nearly 6 years suddenly ended was a very symbolic event. The fact that the program abruptly ended despite a great sadness of numerous fans would seem to imply that there were external factors surrounding the Japanese TV Station. Back then, Hallyu dramas were broadcast only for 2 hours a week by terrestrial television. On top of that, celebrating the 50th anniversary of Korea-Japan diplomatic normalization, there were no slightest signs of recovery. At the end of the same year, both governments announced a dramatic agreement on the comfort women issues; however, it still remains as an unsolved assignment far from any signs of improvement. In this situation of bilateral relations, how has K-Pop market developed then? According to "Oricon", the most prestigious music chart of album sales survey of Japan, regarding the album sales volume from January to October of 2016, it turns out that "Made Series" of Big Bang ranked No. 20, recording the highest rank among all Korean artists. "Galaxy of 2 PM" of 2 PM succeeded

10 Big Bang, ranking No. 36, and "Welcome back" of ikon ranked No. 44. "Youth" of BTS ranked No. 48. In February of this year, "Made" of Big Bang ranked No. 2 in the total album ranking and proved that existing Hallyu-representing artists are maintaining high popularity and stable support in a steady way. Then, what is the origin of this gap between the suspension of "Han Love" and popularity of K-Pop artists in Japan? From Drama to K-Pop, from people in their 40s to those in their teens It seems that some unexpected events are happening in the Korean classes offered in Japan nowadays. The number of new learners of housewives in their 40s and older, who used to form the main stream of Korean learners, hasn t been increasing for about 2-3 years. This phenomenon of suspension of influx of new Korean learners among the housewives group can be explained from the local atmosphere in which "it is hard to like Korea while watching the current news" or "it is difficult to say to others that I like Korea". As Mr. Furuya, the Hallyu popular culture journalist of the Asahi Shimbun (Newspaper), criticized (on March, 9 of 2017) that "mass media is highly responsible for this phenomenon. Instead of delivering the facts, media of both countries is more interested in provoking the national sentiment", it is undeniable that the excessive close-up of political and diplomatic issues have great influences on Hallyu. There are no noticeable changes in learners at the intermediate level, who have steadily practiced Korean even before this "boom of hatred towards Korea", but it seems that they are now in a sort of uncomfortable situation to publicly say that "I am a Hallyu fan". In effect, some private institutes teaching the Korean language have a hard time opening the course for beginners by the lack of number of new applicants. While the number of new Korean learners in their 40s is decreasing, the teenaged youth are showing the contrasting tendency. There is a growing number of students of professional colleges providing studies of Korean in earnest. Since last year, the number of freshmen aspiring to study at top-three professional colleges with the newly-established Department of Interpretation and Translation is growing with rapidity to such an extent as that one full-time instructor has to be in charge of 100 students. From this year, Suginami High School located in Tokyo adopted Korean and Chinese as the second foreign language and implemented the recognition system of one language between the two as an elective subject of obligation. In the beginning, the school was worried of "the possibility of total absence of applicants", but, in reality, there was an excessive demand among the students. To meet the high demand, the school is planning to open 2 classes

11 especially for the second-year students. It is not exactly measured yet how many freshmen want to take the Korean class, but some students started teaching themselves even from middle school days and some decide to go to a Korean university after finishing high school or professional college. This case is on the rise. Considering these trends, it is predicted that the demand for Korean classes will persist in Japan. KOFICE NOTE Rise of anti-hallyu mood in people in their 30s-50s - According to the survey of "anti-hallyu awareness" oriented to Japanese people with Hallyu experience in 2016, about 28.3% of all contestants answered that they "sympathize with anti-hallyu", showing the increase by 11.3% over last year. We need to pay attention to the fact that the answer of sympathy with anti-hallyu rapidly rose in people in their 30s-50s. In other words, in the past, "Hallyu fans of Japan" reminded us of housewives in their 40s but now they have negative awareness of Hallyu. - The biggest reason for their sympathy with anti-hallyu was that "Koreans have bad national character (31.8%)". In particular, "political/diplomatic conflicts with Korea (26.5%)" was the second most important reason. The unstable international conflict brings about the raise of sentiment against Korea. That is why the response rate of anti-hallyu appeared low in the youth in their teens and twenties, who are less affected by such political and diplomatic issues. <Rate of response regarding sympathy with Anti-Hallyu in Japan> Gender Division Rate of response regarding sympathy with Difference between 2015 Anti-Hallyu (%) and 2016 (%) Total Male Female In their teens In their 20s Age In their 30s In their 40s In their 50s

12 K-Pop in Japan singing and dancing beyond just listening I cast a question to some Japanese college students "if the recent Korea-Japan relationship gives negative influences on K-Pop fans in Japan", and asked their sincere and straight answer. A senior male student who is carrying out activities as a member of the K-Pop Cover Dance club answered that "It does not affect me at all. On the contrary, I am thankful to Korean artists who come to Japan to study the language and make their debut after that. The political problems between Korea and Japan don't matter at all. I haven't seen any friend around me who wants to stop Hallyu fan activities because of the relationship of both countries." Moreover, a sophomore female student answered in the same context that she and her older sister as K-Pop fans often go to Korean concerts of new artists in Japan. She added, "This year, great figures of K-Pop artists including the group TWICE are scheduled to come to Japan, so tremendous popularity will be gained." and answered that she was planning to go to Yonsei University to study for one year from this September on. I asked the same question to other college students but the answers were almost the same. For the Japanese youth, the main motivation for studying Korean or purpose of it consists not in "Korean drama" but "K-Pop". It is because the main reason for studying Korean is to share the view of the world in person represented in the songs because the vivacity of lyrics of Korean artists full of wit disappears in the process of being translated into Japanese. The popularity of K-Pop in Japan entered into the orbit of the stage of enjoying it through Korean study, beyond a mere act of listening to it, and it is connected to popularity expansion of cover dance in tune with choreography. In effect, there is a growing number of universities in Japan supplied with "K-Pop dance club", and the students are enjoying cover dance. In sum, for the youth in their teens and twenties, K-Pop is not accepted as a mere fad but a genre. From this viewpoint, it is likely that the protagonists of Hallyu fans are transforming from "middle-aged women who like Korean drama" into "youth in their teens and twenties who enjoy K-Pop while singing and dancing". It is estimated that Hallyu will be relatively liberated from the influences of political issues and anti-hallyu streams due to the changes of Hallyu demand class. In other words, for the youth who know how to separate politics from culture, the current Korea-Japan relation will not give strong influences on Hallyu contents consumption and fan activities. At the end of last year when the tension between two countries continued by political and diplomatic issues, the Idol group ikon won "Best New Artist" award in Japan Record Awards. This can be the best example of this case. It is required to pay attention to the fact that the young generation, who wants to purely enjoy Hallyu by separating "politics" from "culture" though they can be politically

13 influenced like the older generation, is emerging as the leading force in Hallyu. It is another question if this phenomenon is caused by their indifference to historical problems and international relations. Time will tell. KOFICE NOTE Popularity of K-Pop performances and rejuvenescent fandom 1) Undying K-Pop Idol performance - Even in the middle of increased anti-hallyu sympathy by historical conflicts between Korea and Japan, the popularity of K-Pop still maintains in Japan. EXO, Big Bang and TWICE proved their high popularity by ranking No. 1 not only in Oricon, Japan's greatest music charts but also in K-Pop field of itunes of Japan. - In recent days, Big Bang demonstrated their great popularity through the largest fan meeting ever, gathering up to 1.05 million people in their Japan Dome Tour. The fever of K-Pop in Japan is expected to continue with the scheduled concerts of next-generation artists including BTS and Monsta X followed by Big Bang. <Current status of K-Pop in Japan> Division Details K-Pop reigning music chart (EXO) Ranked No. 1 in 3 fields of Oricon Weekly Charts of February of this year. Unit "CBX" will release the album "Girls" in Japan on May, 24. (Big Bang) The live concert of Japan Dome Tour "BIGBANG10 THE CONCERT : 0.TO.10 THE FINAL-" ranked No. 1 in 3 fields of "Music DVD", "Music Blu-ray" and "General Music video Ranking". (TWICE) Before the official debut in Japan in June of 2017, the song "KNOCK KNOCK" included in "TWICEcoaster: LANE 2" ranked No. 1 in the K-Pop field of itunes in Japan. (Big Bang) In the second quarter of this year, the largest fans ever gathered up to 1,05 million people in Japan Dome Tour and fan meeting. The members Daesung Frequent and active performances of Korean artists and Taeyang will have a solo tour of 4 sessions from April, 15 and 2 sessions from July, 8. (BTS) BTS is planning to have a city tour of 6 cities including Osaka, Hiroshima, Nagoya, Saitama and Fukuoka from May, 30 to July. (MONSTA X) Before the official debut in Japan on May 17 of 2017, MONSTA X is planning to have a debut showcase in Osaka on 1 of next month, in connection with "Mercury Tokyo" of "Universal Music".

14 2) Neo-Hallyu fans working in social media - As the Hallyu fans are getting younger in Japan, it is changing toward so-called "Neo-Hallyu", spreading via mobile phones and on-line focused on the youth in their teens (in particular, female group aged 15 to 19). They use language translation application and social media such as Twitter and Instagram and obtain information related to the activities of artists based on "zero time difference". - On the other hand, in 2011, dance was designated as a compulsory subject from elementary school to high school in Japan. The video of K-Pop groups with dance competency characterized by so-called "group dance" was the same as "dance textbook" for the Japanese students, in accordance with the increased interest in dance, particularly focused on the youth. Recently, Cover Dance is getting more and more popular since the local K-Pop fans started to upload dance videos imitating their preferred Hallyu stars on Youtube and the like.

15 Key K-Pop strategy for Japan: "Multi-marketability" and "Self-directed attraction" Seo Byeong-gi (Senior journalist specialized in Popular Culture, Herald Business) Korean popular culture such as K-Pop, drama and entertainment is already receiving a positive response from every corner of the globe. In particular, in tune with the world-class popularity obtained by the representative global target groups "Big Bang" and "BTS", cultural industrial sectors are setting up strategies towards Japan, East Asia and worldwide approach as a scenario of "Post-China". Most of all, targeting the Japanese market is very important. Japan is the second-largest music market followed by USA and has been a typical Hallyu market which has been existent from the beginning in which the price of a CD and music file usage charges are 2-3 times higher than those of Korea. Today, Korean entertainment companies such as JYP, YG, SM and FNC are still focusing on the Japanese market. However, the trends have changed to "Neo-Hallyu", from "housewives fans" of their 40s to "young fans" in their teens and twenties who are less sensitive to political and diplomatic issues. Due to the transformation trends of Hallyu in Japan, it is required to give changes in expansion strategy of K-Pop in Japan. Expansion in Japan made by domestic entertainment companies JYP Entertainment will launch out on target for the Japanese market by making a debut of Girl Group "TWICE" this coming June. TWICE with the contract signed with Warner Music Japan will release the debut album "#TWICE" on June, 28 of this year to carry forward activities in Japan. The album includes 10 songs in total in Korean and Japanese such as the hit songs "OOH-AHH", "Cheer up" and "TT". The 5 famous morning information programs of Japan such as "Oha!4", "ZIP" and "Good morning" extensively treated the news of TWICE, attracting attention of the local fans. The 4 songs released in advance such as "OOH-AHH", "Cheer up", "TT" and "Touchdown" ranked No.1 to 4 on the LINE Music chart. Moreover, the special album released in Korea "TWICEcoaster: LANE 2" ranked No. 1 in the entire stores of Tower Record. TWICE, preparing for the debut in Japan, proved the intensive enthusiasm of local people by being the highlight of the Yomiuri Shimbun. TWICE was in the limelight by being selected as the

16 final protagonist of the corner "Hallyu NOW" reported in the evening edition of the Yomiuri Shimbun. "Hallyu NOW" is a serial corner lasted for 1 year and half through the evening edition of the Yomiuri Shimbun reported by Furuya Masayuki, the visiting associate professor of Hokkaido University of Science and expert in Korean popular culture. Regarding TWICE, he introduced that "the group is making a record-breaking hit in all songs released in 1 year after the debut. TWICE also won the Grand-Prix in many music awards in Korea last year. It is such an exceptional case that a new group can have this high evaluation." He added that "3 Japanese members belong to this group and there are quite a few middle and high school girls in Japan who admire them playing an active part abroad. The group led 'girl crush' from Korea, turning into 'an icon of Pop' as lovely girls admired by girls. At the end of the corner, he highly praised TWICE with this comment, "as a new protagonist succeeding the popularity of Kara and Girls' Generation obtained in Japan after 2010, the group has sufficient potential and competency. In Japan where Hallyu popularity has been settled but known for static growth possibility, TWICE might be a new protagonist starting the domination of the Hallyu content market in Japan." There are 3 decisive factors that make TWICE competitive in Japan. Firstly, 3 members of the group (Sana, Mina and Momo) are Japanese and this allows for smooth communication in Japanese. Other Korean members are learning the Japanese culture from these 3 members. Secondly, when it comes to appearances and performances, the members stand out as being "kawaii" and "adorable/cute" enough to fully please the Japanese people. Therefore, they have high potential, capable of repeating the golden days of Kara and Girls' Generation. Lastly, in Japan, they already formed a high-degree awareness of their songs, dance, "TT Dance" and "Sha Sha Sha Dance" released in Korea, through entertainment programs and wide diffusion of videos. In particular, "TT Dance" is in fashion among Japanese celebrities and it is the conversation topic of young women as well. In the social media of beauty & fashion information "Mix Channel", which is very popular among women in their teens and twenties in Japan, there is an on-going dance contest "TWICE x MixChannel". From 2012, Big Bang of YG Entertainment held the first world tour (Big Bang Alive Galaxy Tour) around 25 cities of 16 countries in 4 continents including Asia, North America, South America and Europe, attracting more than 800,000 spectators. However, the Japanese market is highly valued too. With Dome Tour Live released in Japan, Big Bang won the first place in 2 categories in Oricon charts. The DVD including the video of the concert "BIGBANG10 THE CONCERT : 0.TO.10 -THE FINAL-" held at Osaka Kyocera Dome on December, 29 and Blu-ray ranked No. 1 in 2 ranking categories of General DVD ranking and music Blu-ray ranking, proving great popularity in Japan.

17 Last year, Big Bang made a record-breaking history of holding Japan Dome Tour four years in a row for the first time as foreign artists, by gathering about 781,500 spectators through 16 concerts around 4 cities from November to December, in celebration of the 10th anniversary of their debut. With the start of Japan Dome Tour concert at Osaka Kyocera Dome on November 23 of 2012, Big Bang established a remarkable record gathering of 3,509,000 fans during 71 concerts held for 4 years in a row at Japan Dome Tour. In particular, today's DVD and Blu-ray are more significant in the sense that they contain the last concert before one of the members, Top joined the army. Along with Big Bang, the mini album "D-Day" of Daesung released in celebration of the first solo Dome Tour is also loved by local fans. Apart from being No. 1 in general music album in itunes of Japan, "D-Day" previously disclosed prior to the album presentation of April 12 is sweeping top ranks in the general ranking of main sites such as Album Daily Ranking of Recochoku, the largest music album site, High-definition music album Daily Ranking, Mu-mo album Daily Ranking and Mora General album Daily Ranking (all as of March 28). SM Entertainment sets to kindle popularity of Korean music inside Japan, by putting up TVXQ as a spearhead. the members, U-Know Yunho and Max Changmin will be discharged from military service in April and August, respectively, and are likely to restart the music life in earnest. In conjunction with emperor-like class of Hallyu, TVXQ, another leader of Hallyu Super Junior, is planning to enter the Japanese market in earnest at the second half of this year, when most of members are discharged from military service in August. FNC Entertainment will focus on activities in Japan since the awareness of artists belonging to CNBLUE, F.T. Island and AOA is highly raised in Japan, aiming at world-wide market. Furthermore, SF9 of FNC Entertainment composed of 9 members (Youngbin, Inseong, Jaeyoon, Dawon, Rowoon, Zuho, Taeyang, Hwiyoung and Chani) will make a debut in Japan this coming June. Strategies for continuation of K-Pop in Japan The inroad of K-Pop into Japan is now in the second step as a continuation of the early 2010s which saw big success with Kara and Girls' Generation. The time difference is only about 5 years compared to those times, but it is required to look for new target strategies in accordance with the changes of trends of "Neo-Hallyu", the new arrival of teenagers who are familiar with Smartphone, shifted from Hallyu fans of older age group who mainly depend on terrestrial The inroad of Kara and Girls' Generation into Japan triggered rejuvenation of the consumer

18 class of Hallyu, which used to be chiefly consumed by middle-aged women: It shifted to young women in their teens and twenties. In particular, the showcase of Girls' Generation succeeded in attracting the public attention to such an extent as to be even reported by the prime-time nine o'clock news on NHK, the channel which hardly covers entertainment news. However, the Korean Girl Group could not make a long-run success. Even though there was this external factor of "anti-hallyu" by conservative and right-winged groups, it was equally true that there were some insufficient factors enough to constantly attract the Japanese people. In Japan, it is analyzed that Korean Girl Groups appealed to Japanese people by showing differentiated charm from Japanese Girl Groups. In fact, from the viewpoint of most of Koreans, the typical Japanese Girl Group AKB48 look even childish as if they were singing some children's songs. It is because they put emphasis on "being Kawaii (cute)" as compared with Korean Girl Groups. On the other hand, Korean Idol Groups have many strengths of dance (performance), singing ability, style, etc. The proof can be found from the fact that Idol Groups with high degree of completion, such as the disbanded 4Minute, are considered artist-class Groups in Japan. However, the local press is able to produce negative reactions by linking our Groups with anti-hallyu approach any time they want, based on inconsistent reporting forms like "music is invisible, but only their legs are visible" or "Girls' Generation only prioritizing the beauty of leg lines". Experts diagnose that it is fundamental for Korean Girl Groups to raise the musical completion by overcoming appearance-focused limitation to have success in the long run in Japan. I totally agree with them. In effect, the so-called "noise marketing" of Korean Girl Groups in Japan attained success more than expected, but there are few good evaluations on their musical capacity and review. Nonetheless, the strategy solely focused on singing ability can be a naive idea in a way. There is no guarantee that Korean singers with great singing ability can win success when they enter the Japanese market. The fact that Korean Girl Groups obtained awareness in Japan almost at the same time as in Korea through global video platform Youtube can be a counterevidence of the power of their visual appearance. In other words, the reality is that new-generation Japanese do not even open the heavily uploaded videos of Korean singers with great singing ability. What matters is that the combined elements of "visual appearance" with "musical completion" created inimitable charms which are hard to find in Japanese female singers. The fact that Korean Girl Groups are sexier, prettier, nicer and more powerful than Japanese ones is not weakness but strength to highlight. Therefore, It is not necessary to incline toward uniform "exposure policy" and raise dust to strengthen singing ability. Korean Idol Groups including TWICE must play a match with the charm of their own and keep diversity. The fact that Beyoncé and Christina Aguilera who made a debut as teenagers are still

19 loved by world-wide popular music fans lie in their "multi-marketability" such as outstanding singing ability, dance, splendid style and overwhelming stage presence. It is time that our Girl Groups and Boy Groups should maximize "self-directed" charms while standing out with big response ability not only in Japan but also in global music market. KOFICE NOTE K-Pop fans in Japan, "We like there attractive appearances and nice performances!" - According to response regarding attractive factors of K-Pop oriented to people with Hallyu experience in Japan, the result shows that the first factor is attractive appearance of singers/idols (31.5%), followed by Outstanding performance of singers/group/idols (18.5%). This means that attractive appearance of singers/idols and their outstanding performance play a leading role in keeping the popularity of K-Pop in Japan (KOFICE, 2016 Survey of current status of overseas Hallyu). K-Pop Popularity factor Total Gender Male Female 10s 20s 30s 40s 50s Age Attraction of appearance and style of K-Pop singers/group/idols First priority Second priority Outstanding performance of K-Pop singers/group/idols First priority Second priority Addictiveness of refrain and rhythm of music First priority Second priority

20 KOFICE NOTE Key expansion strategy for Japan done by domestic entertainment companies 1) Multi-national trends - Nation s 3 major entertainment management companies, SM, YG and JYP are absorbed in achieving diversity of nationalities of Groups or members through holding a global audition from all over the world including Japan. SM Entertainment already displayed NCT DREAM, the youth alliance unit composed of 6 multi-national teenager members (Chenle, Renjun, Jisung, Jeno, Mark, Haechan) under the brand of NCT. TWICE of JYP Entertainment heating the K-Pop market of Japan has 3 Japanese members out of 9 (Mina, Sana and Momo) and this factor will play a useful role in gaining popularity in Japan. 2) Bilateral communication with fans - In company with multi-national trends of Groups or members, the communication way between Entertainment companies and fans is experiencing changes due to the fluctuation of media environment. In the past, unilateral communication method from Entertainment companies or stars to fans was dominant. However, at present, there are many on-going efforts to activate bilateral communications between stars and fans through a variety of windows based on online and mobile environment. - In effect, V App is very popular because it allows world-wide Hallyu fans to easily watch live videos of Hallyu stars from mobile phones and have a real-time communications with the stars. Moreover, LOEN Entertainment provides 20 different types of original contents for Youtube, Facebook, Youku and Weibo through 1theK, the music video channel. It is also taking an active role in MCN. It is ardently loved by more than 930,000 Hallyu fans from 231 countries all over the world (as of December of 2016). 3) Differentiation among Korean artists - What must be considered in company with media environment changes is that Japanese K-Pop fans have developed their discernment in music. However, the reality is that male groups are principally biased toward hip-hop music while female groups are inclined to Idol line ((Korea Creative Content Agency, 2016 trends and analysis of K-Pop market in Japan). To meet the needs of Japanese K-Pop fans for enhanced quality, it will be required to secure diversity through differentiation among Korean artists.