Competitiveness of Intellectual Property
According to a report from the Bank of Korea on March 22, Korea's trade balance from intellectual property rights has remained in the red since 2010 when the central bank began compiling the relevant data. The figure has been on a constant fall from US$10.34 billion (12.01 trillion won) in 2010 and US$6.17 billion (7.17 trillion won) in 2014 to US$3.26 billion (3.79 trillion won) in the third quarter of 2015.
The chronic deficit is largely due to the fact that the import of culture and art copyrights is double its export. In particular, royalties for music and film paying to other countries are much higher than that from other countries. Its imports were two times higher than the exports until the third quarter of 2015, while its imports in 2014 were tripled. In 2010, Korea imported US$490 million (569.14 billion won) of culture and art copyrights and exported US$4.7 billion (5.46 trillion won) of them. Royalty fees for the Beatles songs will reflect Korea’s trade deficit from culture and arts copyrights in the first half of 2016 that will be compiled in the future.
Its deficit is gradually decreasing but some say that the outlook doesn’t look very promising unless Korea improves its fundamental competitiveness in the culture industry. An industry official said, “When Korea doesn’t strengthen its competitiveness in the culture content industry, it is unlikely to overturn the chronic deficit in the trade balance from copy rights.”
Since the trade balance from culture and art copy rights can be swayed by one or two works, it is hard to predict. Psy's K-pop single, Gangnam Style, is the best example. A music industry official said, “Royalties from other countries are 2 billion won (US$1.72 million) higher when compared to Psy's Gangnam Style and recently.”