As exports of Korean culture, including K-pop stars performance overseas, has increased, chronic balance of payments deficit related to culture is expected to turn to a profit in 12 years.
According to the Bank of Korea on Dec. 25, imports of individual, culture and leisure services amounted to US$767.2 million (about 850 billion won) from Jan. to Oct. this year. The figure is already exceeded US$730.9 million (805.67 billion won) of last year, which was an all-time high on a yearly basis.
The imports of individual, culture and leisure services mean earnings from abroad, which are related to the production of movie, radio and TV programs, health care and education.
Until 1996, Korea had not made any money at all from abroad in the cultural industry. However, the earnings from cultural products have steadily increased since 1997 starting from US$4.4 million (4.85 billion won) and renewing record highs every year since 2004. The amount of cultural exports multiplied more than 20 times in just 10 years.
The balance of cultural trade was in deficit of US$83.8 million (92.37 billion won) last year but it saw already a surplus of US$3 million (3.31 billion won) from Jan. to Oct. this year.
With the popularity of K-pop singers expanding to western countries and exports of TV programs to Japan and China increasing, the balance of cultural trade has shifted from deficit to surplus.
Export prices of Korean drama, or K-drama, to China are rapidly growing. “Pinocchio” was recently sold at US$280,000 (308.64 million won) per episode, hitting a record high.
“Pinocchio” has gained 6.2 billion won (US$5.62 million) in just one year while the export of "My love from the Star” to China made earnings of 800 million won (US$725,755). In addition, Hallyu stars have made a considerable amount of incomes by filming commercials in China.
This year, imports of intellectual property rights (IPS) are highly likely to increase the most in history as well.
The figure reached US$4.18270 billion (4.61 trillion won) from Jan. to Oct. this year, which was only short of nearly US$200 million (220.46 billion won), compared to the all-time high annual profit of US$4.3 billion (4.74 trillion won) in 2011.
Royalties of IPS are usage-based payments made by a licensee to a licensor for the right to use of patents, trademarks and copyrights. Publishing rights (license) to distribute TV programs and movies belong here.