Korea’s cultural content industry has seen rapid growth. Key drivers include improved content quality, a maturing digital ecosystem, and increasingly interconnected business networks. As the industry takes on a more prominent role in the national economy—generating a significant production inducement effect—policy efforts should focus on strengthening copyright protection and enforcement, advancing digital transformation among small and midsize firms, and diversifying export markets through deeper industry linkages.

Ⅰ. Rationale for the Study

South Korea’s cultural content industry has seen accelerated growth since the early 2010s, driven by the global spread of digital platforms and streaming services. As of 2021, this industry generated 137 trillion won in sales, 53 trillion won in value added, and 12.5 billion dollars in exports—2.3, 1.8, and 3.9 times their respective levels in 2010. Moreover, the industry’s share of value added in Korea’s GDP is approximately 2.6-3.7%, suggesting ample room for further growth compared to major advanced economies, where the share exceeds
5%.

What drives this remarkable growth? Despite rising international interest in the success of Korea’s content industry, widely known as K-content, comprehensive research remains limited. This paper examines the industry’s structural evolution and growth trajectory, assesses its broader economic impact, and identifies firm-level growth drivers to inform future policy.

1. Changing Composition of Content Firms
Over the past decade, the total number of content firms in Korea has remained steady at around 110,000. However, differences have emerged across individual content categories (Figure 1).

Categories such as advertising, knowledge information, and content solutions, where internet and mobile-based production and services and online distribution have expanded, have seen an increase in firm numbers. By contrast, firm counts have declined in the games, comics, and films, which have seen reductions in offline distribution outlets such as theaters, PC cafés, game arcades, and comic book rental/retail shops. While the total number of firms has remained relatively stable, the industry’s composition is shifting toward digital content production and online distribution.

2. Sales Growth Led by Knowledge InformationContent industry revenue grew from 57.3 trillion won in 2005 to 137.4 trillion won in 2021 (Figure 2, left). Although sales declined in some subcategories, such as films, music, and advertising, in 2020 due to COVID-19, most rebounded the following year and returned to their previous growth trajectory.

Reflecting the digital transformation of the content industry, knowledge information has made the largest contribution to overall sales growth. From 2005 to 2021, its sales increased by 16.9 trillion won, accounting for 21% of the total industry sales growth (80.2 trillion won). Anchored by portal services, internet information intermediaries, and online information providers, this category recorded an average annual growth rate of 12.5%, quickly rising to the fourth-largest by sales volume.

As shown in Figure 2 (right), knowledge information also saw the largest increase in firm numbers across the industry—unlike games, where firm numbers declined despite rising sales, or publishing and broadcasting, where growth was modest. This suggests that, in addition to the growth of existing firms, new business creation is actively taking place.

3. Export Growth Led by Games, Music, and Broadcasting
The content industry has driven strong growth in exports, giving rise to global buzzwords such as K-games, K-pop, and K-drama. Content exports increased 3.9-fold from 3.23 billion dollars in 2010 to 12.45 billion dollars in 2021, setting new records each year since data collection began (Figure 3, left).

Despite heavy regulatory oversight, games led the strong export performance, accounting for 77% of the total export increase (9.23 billion dollars) over this period, further accelerated by the global rise in indoor entertainment during the pandemic. Meanwhile, music and broadcasting have gained steady international traction, with average annual growth rates of 19% and 5%, respectively.

Another noteworthy trend is the steady decline in content imports, which fell by 29%, from 1.7 billion dollars in 2010 to 1.2 billion dollars in 2021 (Figure 3, right). Instead of relying on localized foreign content, particularly in advertising, characters, and films, Korea is increasingly producing world-class content domestically. As this shift gets pronounced, net exports have soared more than sevenfold, boosting Korea’s trade surplus in intellectual property (IP) rights, particularly in copyrights.

Ⅲ. Production Spillover Effects of the Content Industry

Korea’s content industry achieved remarkable growth over the past decade, with impacts extending well beyond the sector through strong linkages across the broader economy. As content production increases, it drives demand and output across a wide range of related industries.

To assess these spillover effects and inter-industry linkages, this study integrates the Special Classification of the Content Industry, the Korean Standard Industrial Classification, and the 2020 Input-Output Table to identify 12 industries and conducts an input-output analysis.

1. Input Structure and Linkages with the CPND Ecosystem
Table 1 presents the top 10 industries on which the content industry relies most for intermediate inputs, ranked by input coefficients. These coefficients reflect how much the content industry purchases from other sectors during production. One notable finding is its relatively high self-input coefficient of 0.112. Typically, high values are found in manufacturing industries that reuse their own output. Despite being service-oriented, the content industry ranks 13th out of 33, surpassing most service sectors and even several manufacturing ones.

This high self-input coefficient reflects a structural characteristic whereby a single piece of content is repurposed and expanded across diverse formats—such as webtoons adapted into dramas or games and further into character merchandise. This structure, backed by strong internal linkages, suggests that the content industry can generate value added repeatedly and sustainably.

2. Production Inducement Effects
This section assesses the broader economic impact of the content industry through its production inducement effects. Figure 4 shows that its production inducement coefficient is 1.572, indicating a one-unit increase in final demand for content products generates 1.572 units of production across the national economy.9) Of this, 1.000 units (64%) occur within the content industry, and 0.572 units (36%) are spillovers to other sectors.

A closer examination reveals that 0.175 units (11%) occur in manufacturing. The largest effects are concentrated in industries that supply key inputs for content production, including chemicals (0.030), wood, paper, and printing (0.028), and computers, electronics, and optical equipment (0.023).

In services, 0.362 units (23%) of output are induced. The largest effects are seen in professional, scientific, and technical services (0.054) and wholesale, retail, and intermediary trade services (0.054), which provide technical support and distribution within the CPND value chain. ICT and broadcasting services (0.049) and business support services (0.048) also show sizable effects, reflecting their critical roles in content production and operational management.

In monetary terms, the content industry generates an estimated 113.7 trillion won in output across the domestic economy. Of this, 72.3 trillion won originates from within, 12.7 trillion won from manufacturing, 26.1 trillion won from services, and 2.6 trillion won from other industries.

Compared with other industries, the index of power dispersion for the content industry is 0.955, ranking 19th out of 33 and placing it in the mid-range. This exceeds the service average (0.889) and is comparable to individual industries such as transport services (0.951), wholesale, retail, and intermediary trade services (0.931), professional, scientific and technical services (0.917), and financial and insurance services (0.849). Although slightly below the manufacturing average (1.062), its service-orientated nature supports a substantial overall economic impact.

Furthermore, given the wide use of content as input across various industries, content production tends to rise in tandem with broader economic activity. Analysis of the index of sensitivity dispersion shows that its sensitivity coefficient of 1.137 indicates it responds 13.7% more sensitively to changes in the overall economy than the average of all industries.

For instance, a tourism boom may increase demand for promotional videos, boosting content production. Conversely, a manufacturing downturn may reduce demand for advertising, design, and media services. This high responsiveness means the content industry experiences significant production volatility in response to changes in other sectors, highlighting the importance of industrial and policy measures to prepare for external market shifts.

Ⅳ. Growth Drivers for Content Firms

What, then, has driven the rapid growth of the content industry? This section explores the underlying factors by analyzing firm-level microdata on content firms.

1. Rise in Quality of K-Content
The growth of content firms has been driven primarily by improved content quality alongside quantitative expansion. As shown in Figure 5, K-content accounted for about 7% of all content across TV shows and films on Netflix during 2023-2024. When limited to non-English language works from countries such as Japan, China, India, Spain, and France, its share reached roughly 20% of total content and exceeded 30% within the Top 100 non-English titles, demonstrating its overwhelming global presence.

This trend is equally evident in films. Figure 6 shows that the number of international film festival awards won by Korean films steadily increased from the 2000s, then surged in the 2010s, and achieved even greater success in the 2020s.
Of particular note, around 40–50% of Korean films are submitted to international film festivals, and the share of submissions receiving awards has steadily risen. This indicates that K-content is not merely growing in quantity but is also securing a strong foothold in global markets through high production quality and artistic depth.

2. Development of the CPND Value Chain
Earlier analysis demonstrated the content industry’s organic linkages with various input industries within the CPND ecosystem. This suggests that shifts in CPND-related factors can meaningfully affect the growth trajectory of content firms.

Among these, a critical factor is IP, an asset that ensures the creation, protection, and content use, pivotal to revenue generation for these firms. Accordingly, changes in the number of IP assets a firm holds can indicate changes in the volume of content available for commercialization.

Regression analysis in Table 2 shows that all types of IP rights have a statistically significant effect on firm revenue growth. On average, adding one IP right increases firm revenue by 4.1%. Copyrights have the greatest impact, raising revenue by 11.6%, indicating their central role in enabling content monetization through creative work protection. Design rights (6.8%), safeguarding the appearance and visual elements of content, patents (5.8%), facilitating technological differentiation, and trademarks (3.4%), enhancing brand value and recognition, also positively contribute.

These findings suggest that systematic accumulation and management of IP rights are crucial for business growth. Conversely, IP infringements such as illegal copying and unauthorized distribution can severely jeopardize business continuity.

Further analysis using content-related mobile applications as a proxy for platform (P) and content (C) reveals that an increase of 1,000 apps in their average annual number tends to raise firm revenue by 1.0%. This suggests that expanding and diversifying content through platforms broadens consumer choice, which in turn bolsters revenue growth.

Moreover, digital content consumption, such as streaming services, online games, and e-books, thrives when supported by stable network environments and broader digital device penetration. Reflecting this relationship, increases in the rate of internet access in households and the number of internet users tend to correspond with firm revenue increases of 8.7% and 3.0%, respectively.

3. Expansion of Business Transaction Networks
While the seamless production, distribution, and consumption of high-quality content within the CPND value chain are critical, it is interfirm transaction networks that drive and scale this cycle. This study assesses firm-level revenue effects when content firms begin transactions with new sales outlets (Table 3). On average, adding one domestic sales outlet increases revenue by 6.8%, while adding one international outlet raises revenue by 39.9%.

Expanding sales outlets strengthens market access and increases exposure to diverse consumer segments, thus boosting demand for content. International expansion amplifies these effects by reaching broader consumer bases and helping stabilize firm revenue by mitigating the impact of regional economic downturns.15) For the growth of content firms, it is imperative to diversify sales channels and engage international markets. Key strategies include scaling up digital content for immediate global access and improving access to overseas networks.

From another perspective, the revenue impact varies by type of sales counterparty. Transactions with content firms (12%) generate over 2.5 times the revenue increase compared to non-content firms (4.7%).

The disparity arises from the sustained and recurring licensing transactions facilitated by a One Source Multi-Use (OSMU) strategy, often adopted by content firms to expand a single IP across multiple formats. Such practices aligns with input-output analysis findings that show a high self-input coefficient for the content industry due to strong internal linkages. In contrast, transactions with non-content firms such as manufacturers or distributors are often one-off contracts for advertising or promotional materials, resulting in less continuity.

Expanding procurement sources also significantly impacts revenue growth, suggesting that collaboration with domestic and international sources facilitates the smooth acquisition of key production inputs, such as raw materials, software, design, and technology, while contributing to a more stable content production environment.

Ⅴ. Policy Recommendations

With accelerated gains in revenue, exports, and production inducement effect, the content industry has taken on a more prominent role in the national economy. To sustain and deepen this momentum, this paper offers policy recommendations on IP protection and enforcement, digital transformation among small and medium-sized enterprises (SMEs), and export diversification through
tighter industry linkages.

1. Strengthening Copyright Protection and Enforcement
This study finds that IP rights, particularly copyrights, have a substantial impact on firm-level revenue growth. Recognizing this importance, the Korean government has made copyright protection a central policy focus. According to the 2022 Content Industry White Paper, 27 of 149 national support programs are dedicated to copyright-related initiatives.

However, current copyright protection policies appear to focus on a few programs, such as Protecting Copyright and Promoting the Use of Copyrighted Works. To more effectively expand protection, functions for acquiring and safeguarding copyrights should be systematically embedded in the broader support system for content firms, similar to the Fund of Funds supporting smaller producers to secure IP rights.

Additionally, illegal copying and unauthorized distribution are ongoing, particularly online. Increasing detection rates or enforcing harsher penalties is imperative to reduce these infringements—an approach equally relevant to addressing copyright violations. More effective protection would require enhanced national enforcement capacity through stronger monitoring systems and more accessible reporting mechanisms, which enable fast and systematic detections.

Overseas copyright infringements are increasing in step with K-content’s global expansion. In addition to strengthening international enforcement and investigation capacity, robust legal cooperation frameworks with export destination countries should be established and expanded to enable more effective local responses to IP violations.

3. Export Market Diversification and Global Expansion of Related Industries
While Korea’s content exports have seen strong performance, approximately 70% are concentrated in Asian markets—namely China, Southeast Asia, and Japan—highlighting trade risks stemming from geopolitical uncertainty (Ministry of Culture, Sports and Tourism and Korea Creative Content Agency, 2021).

In contrast, Korean dramas, films, and variety shows are gaining popularity in Western markets through global OTT platforms, amid steady growth in demand for K-pop, webtoons, and animation. In addition to sustained expansion within Asia, targeted policy efforts are increasingly called for to diversify export markets toward North America and Europe.

Therefore, the government should work through the K-content Export Council to systematically develop region-specific market entry strategies. Such strategies should go beyond production to include analysis of regional content consumption patterns, legal and regulatory environments, and cultural factors. Strengthening services for translation, local marketing, and regulatory compliance will also be critical to helping firms enter global markets.

Additionally, it is important to pursue strategies that build synergies with related industries that use content as a core input. Expanding the global distribution of merchandise related to K-content, such as character, fashion, and beauty items, and supporting entry into international e-commerce platforms and offline retail channels can help drive the overseas expansion of associated manufacturing, wholesale and retail trade, and intermediary services.

Policy efforts should steadily advance these strategies to ensure that content exports contribute not only to the advancement of the cultural industry but also to the dynamism of the national economy.