South Korea’s Hallyu Playbook: How K-pop, K-drama and Webtoons Became an Export Engine

South Korea’s Hallyu playbook is the clearest modern case of a mid-sized country turning culture into an export sector by design. In this guide the Kurums Startup team breaks down the numbers behind K-pop, K-drama, webtoons and games, how the agencies and platforms make money, what the government actually funds, and what transfers to other countries. It is part of our Arts & Creative Economy hub, alongside the UK creative industries playbook and our case studies of artist-led brands from Fenty to HYBE.

How big is Korea’s content industry in 2026?

Domestic content sales reached 157.4 trillion won (roughly $115bn) in 2024, up 2.1%, across 120,875 businesses employing 688,121 people. Exports hit $14.1bn in 2024 and a tentative $14.9bn in 2025. Exports have grown every year since 2015 even when domestic sales stalled.

The Ministry of Culture, Sports and Tourism’s 2025 Content Industry Survey, reported by The Korea Times and Asia Economy in February 2026, splits the 157.4 trillion won across eleven sectors. Broadcasting and video led with 25.0 trillion won (15.9%), followed by knowledge information at 24.7 trillion, publishing at 24.2 trillion and games at 23.9 trillion. Each of the eleven sectors ran a trade surplus. Employment rose 3.4% and the number of firms 2.4%, which is faster than the Korean economy as a whole.

Exports are far more concentrated than sales. Games produced $8.5bn of the $14.1bn, or 60.4%, almost all of it from online and mobile titles sold in China, Japan, Southeast Asia and North America by Nexon, Krafton, NCSoft, Netmarble and Pearl Abyss. Music exported $1.8bn, broadcasting and video $1.26bn, and the remaining sectors (comics and webtoons, characters, animation, publishing, film, advertising) shared the rest. The popular image of Hallyu as a music-and-drama phenomenon is accurate for influence and wrong for money: in export terms it is a games industry with a famous entertainment wing.

The government’s June 2026 update, reported by the Korea JoongAng Daily, added the tourism side of the ledger: 18.9 million foreign visitors in 2025, tourism revenue of $27.2bn and foreign card spending of $14.1bn. Culture Minister Chae Hwi-young used the occasion to raise the 2030 “K-culture market” target from 300 trillion won to 400 trillion won, a figure that combines content, tourism and related consumption rather than content alone.

How did Hallyu become an export engine rather than a fad?

Through a sequence that started in the late 1990s: a deliberate state pivot to cultural industries after the 1997 financial crisis, private agencies that industrialised talent development, early adoption of digital distribution, and a decade of streaming platforms that carried Korean content to markets where no Korean broadcaster had ever sold.

The policy turn is usually dated to the Kim Dae-jung administration’s Basic Law for the Promotion of Cultural Industries in 1999 and the creation of what became the Korea Creative Content Agency (KOCCA) in 2009. The state’s instruments were modest at first (export fairs, translation subsidies, a film quota that protected domestic screens) but they were consistent across governments of both parties. South Korea is one of the few countries where support for content exports has survived every change of president since 1998.

The private side was built by the three founding agencies. SM Entertainment, founded by Lee Soo-man in 1995, created the trainee system: multi-year contracts, in-house training in singing, dance and languages, and groups assembled for specific markets, including Japanese and Chinese members. YG (1996) and JYP (1997) followed with variations. HYBE, founded as Big Hit in 2005, added the fan-platform layer with Weverse and then rolled up labels through acquisitions, including Ithaca Holdings in the US for roughly $1bn in 2021.

The third element was distribution. Korean broadcasters sold dramas across Asia from the early 2000s (Winter Sonata in Japan, Dae Jang Geum across the Middle East), but global reach came with YouTube, which made Psy’s Gangnam Style the first video to pass a billion views in 2012, and then with Netflix, which committed $2.5bn to Korean content over 2023-2027 and whose Squid Game became its most-watched series ever. Streaming turned Korean drama from a regional export into a global format that producers could finance against international licence fees.

How do the K-pop agencies actually make money?

From four lines: recorded music and albums, concerts, merchandise and licensing, and fan platforms and content. In 2025 concerts and merchandise grew fastest while albums fell, which is why record revenue coincided with falling margins at HYBE. The business is a touring-and-IP business with a music front end.

HYBE’s 2025 results, reported by Music Business Worldwide in February 2026, show the mechanics. Revenue rose 17.5% to 2.65 trillion won (about $1.86bn). Concerts jumped 69.4% to 763.9bn won across 279 shows in 53 cities with twelve touring artists, nearly matching recorded music at 773bn won, which fell 10.2%. Merchandising and licensing grew 35.8% to 570.6bn won. But operating profit collapsed 72.9% to 49.9bn won, a 1.9% margin, after costs tied to the US label restructuring, new group debuts and a widening Q4 net loss. Weverse ended 2025 with 11.2 million monthly active users and turned profitable.

SM Entertainment passed 1 trillion won of annual revenue for the first time, with Q4 revenue of 319bn won up 16.6% and Q4 operating profit up 62.2% to 54.6bn won, on concerts (up 53.6%) and merchandise (up 50.6%) while album and digital music revenue fell 22.8%. YG, which depends heavily on BLACKPINK, grew revenue 49.4% to 545.4bn won and returned to an operating profit of 71.3bn won, with concert revenue of 126.4bn won for the year, according to Asia Economy’s reading of the company’s regulatory filing. JYP’s revenue was roughly 500bn won, led by Stray Kids and TWICE, with a mid-year dip between Stray Kids tours showing how much a single group’s calendar drives the numbers.

Album sales, which peaked above 100 million units in Korea in 2023, are now declining as agencies de-emphasise bulk purchasing and Chinese fan demand softens. Stray Kids’ Karma still sold 3.4 million units on Circle Chart in 2025 and ranked second among all US CD albums per Luminate, so physical remains large, but the growth has moved to live events and intellectual property. For a deeper look at how touring economics work, see our analysis of where the money goes on a stadium tour.

What role do webtoons and Naver play?

Webtoons are Korea’s IP farm: vertical-scroll comics read on phones that feed drama, film and game adaptations. Naver’s WEBTOON Entertainment, listed on Nasdaq in 2024, booked $1.38bn of revenue in 2025 with IP-adaptation revenue up 31.8%, while Kakao runs the rival Kakao Webtoon and Piccoma platforms.

WEBTOON Entertainment’s FY2025 results, published in March 2026, show revenue of $1,382.7m, up 2.5% (3.9% in constant currency). Paid content was $1,087.5m, advertising $164.3m and IP adaptations $131.0m. The company reported a net loss of $373.4m, mostly from $336.5m of goodwill and intangible impairments, and adjusted EBITDA fell to $19.4m. Its boilerplate cites about 160 million monthly active users across Korea, Japan, North America and Europe. Growth in readers has slowed; the strategy has shifted to monetising existing IP through adaptations and to Japan, where Line Manga is the largest digital comics platform.

The adaptation pipeline is where the economic value multiplies. Netflix’s Korean slate has drawn repeatedly on webtoon sources (Sweet Home, Hellbound, All of Us Are Dead, Bloodhounds), as have Korean broadcasters and film studios. A webtoon that costs a few hundred thousand dollars to serialise can underpin a drama budgeted at $20m or more, with the platform taking an option fee, a share of adaptation revenue and a surge in paid readership when the series airs. This is the Korean version of the Marvel model, run at lower cost and higher volume.

Kakao Entertainment, the other half of the duopoly, is privately held and combines webtoons, web novels, music (Melon, Starship Entertainment with IVE) and drama production. The two groups together give Korea a domestic IP market that most countries lack: a place where stories are tested cheaply on paying readers before anyone commits to a screen budget.

What does the Korean government actually fund?

A culture budget of 7.85 trillion won for 2026, of which 1.62 trillion won goes to content, up 27%. The money funds a 430bn won K-Content Fund, 465bn won of cultural investment funds, KOCCA’s export support, overseas K-culture hubs, AI tools for studios and copyright enforcement. It does not fund the agencies directly.

The Korea Herald’s report on the finalised 2026 budget lists the main lines: content 1.617 trillion won (up 27%, the largest increase of any area), culture and arts 2.67 trillion won (up 11.9%), with new money for K-musical theatre, performance venues for popular music and artist welfare. The Korea JoongAng Daily adds that the K-Content Fund rises by 135bn won to 430bn won, 7.5bn won is set aside to move game studios to AI-assisted production, 15.5bn won for K-content cultural spaces and 12bn won for popular-music performance infrastructure. The government’s five-year plan targets content industry revenue of 215 trillion won by 2029, up from 154 trillion in 2023, and funds the Global K-Culture Hub at 262.7bn won to open cultural outposts in major cities.

Two newer instruments stand out. The creative-sector venture capital pool, combining the culture and film accounts of the national fund of funds, was expanded to 731.8bn won for 2026, with a 150bn won “Global League” fund designed to attract foreign co-investors, according to The Korea Times. And copyright enforcement has become policy: a fast-track system to block piracy sites took effect in May 2026, with punitive damages for infringement following in August. For an export sector, enforcement abroad matters as much as subsidy at home.

What the state does not do is own or run the production companies. The agencies, studios, platforms and game developers are private and listed. The public role is catalytic finance, market access, data and training (a scheme to train 3,400 content professionals launched in January 2026). This division of labour is the heart of the Korean model and the part most often misunderstood by governments that try to build “national champions” by decree.

How does Korea compare with other content exporters?

Korea exports roughly $15bn of content against a domestic market of about $115bn, an export intensity near 13%, far above Japan outside games and above the UK’s cultural sector, though below the UK on total creative services. Türkiye exports more TV series by volume but for a fraction of the revenue.

The comparison with Japan is the most instructive. Japan’s content market is larger and its anime and games exports exceed Korea’s in absolute terms, but Japan’s live-music and drama industries remain domestically oriented, and its agencies only began international touring on the Korean scale in the 2020s. Korea’s advantage was that it had a small home market and had to export from the start.

The comparison with Türkiye points the other way. Turkish series reach around 170 countries and roughly a billion viewers, by the Turkish industry’s own estimates, and earned $500m-$680m a year in 2023-24. That is a strong result for an industry with no state export fund, but it is a tenth of Korea’s broadcasting-plus-music exports and the format (long free-to-air episodes sold cheaply per hour) captures less value than Korean drama sold to streamers. The gap is not talent; it is the finance, platform and IP layers that Korea built in the 2010s. Our Türkiye playbook takes up what closing that gap would require.

What can other countries and founders take from the Korean model?

Three things transfer: consistent long-term public finance that is catalytic rather than controlling, a domestic IP-testing market (webtoons, web novels, variety formats) that reduces the cost of finding hits, and an early bet on whichever global platform is distributing content that year. The trainee system and the chaebol-adjacent capital structure do not transfer.

For governments, the Korean budget lines are a useful template because they are specific: a fund of funds that co-invests with private VCs, an export agency with offices in target markets (KOCCA has business centres in Los Angeles, Tokyo, Beijing, Jakarta and elsewhere), a translation and dubbing subsidy, and a legal apparatus for enforcing copyright abroad. None of this is expensive by the standards of industrial policy. Korea’s entire 2026 content budget is around $1.1bn, less than half of what the UK pays out in screen tax credits.

For founders, the agency model offers lessons on vertical integration and fan monetisation. HYBE’s decision to build Weverse rather than rent audiences from social platforms gave it first-party data and a direct commerce channel worth hundreds of billions of won a year. SM’s and JYP’s use of Japanese and Chinese members to localise groups is a market-entry playbook that consumer brands study. The flip side, visible in HYBE’s 2025 margins, is that growth bought with constant debuts, acquisitions and world tours is expensive, and that the next cycle will be won on cost discipline rather than scale.

For investors, the sector is now investable at every layer: listed agencies in Seoul, WEBTOON Entertainment on Nasdaq, Krafton and Nexon on public markets, and a growing pipeline of production companies and fan-tech start-ups. The question for 2026-2030 is whether export growth of 5-6% a year is the new normal or whether a second platform shift, likely around AI-assisted production and short-form video, restarts the curve. Our creative economy 2030 forecast works through the scenarios.

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