Business lessons from BTS

Actually, the headline should read lessons to be learned from the Koreans on how to nurture and earn big from exporting entertainment. But that’s too long.

Here is how the South China Morning Post saw South Korea successfully exporting its entertainment products in an article last Monday:

“Of course, all of this is no fluke. As early as in the 1990s, the Korean government launched an initiative to build a powerful entertainment industry to challenge the international markets.

“With the help of the conglomerates Samsung and Hyundai, production started on films, television shows and music based on models that were well-developed in the United States and other Western countries. The missing piece of the puzzle appears to have been the right distribution medium, as things really took off 15 years later, first with YouTube and then Netflix.

“An international milestone was achieved in 2012, when after years of hard work Psy shot out on the world stage with the hit Gangnam Style…”

Psy and his Gangham Style video was the first video to hit a billion views on YouTube.

Forbes magazine noted that “When all revenue streams are taken into account–sales of the track on iTunes, live shows, endorsements, etc.–Psy’s wealth swells to somewhere between $8 million and $10 million, with almost all of it being traceable back to the silly horsey dance.”

Recently, Squid Game and Hellbound enthralled an international audience.

Indeed, there is so much to be learned from the Koreans. BTS is just the latest success story.

Can we do the same thing with our telenovelas, singers, and rock bands?

If there is one Filipino organization with the capability and vision of going big time in exporting its entertainment products, it is ABS-CBN. They have invested heavily in new studios and other state-of-the-art facilities. Gabby Lopez once said going international is the only way to cover the cost of quality productions and growing revenues.

ABS-CBN was a pioneer in selling their

telenovelas abroad. I am not sure if the Koreans were ahead of ABS-CBN, but I remember my taxi driver in Kuala Lumpur raving about Kristine Hermosa many years ago.

Perhaps, the loss of its broadcast franchise, courtesy  of Duterte and his minions, has curtailed the resources they need to go big. But it may also create a stronger impetus for ABS-CBN to go international and be insulated from the whims of local politicians.

The one time ABS-CBN obtained an EPZ license and tax incentives to digitize its content for the very competitive international market, some congressmen questioned it and called it tax evasion.

Still, ABS-CBN had managed to score some successes in Netflix with The Promise or Pangako Sa Iyo, with Kathryn Bernardo, Jodi Sta Maria, Daniel Padilla and Ian Veneracion. There is also Yellow Rose, a co-production with a Fil-American group.

They have been training two groups also for international breakthrough.

One of them is BGYO. Its debut single “The Light” speaks about empowerment, hope, and self-love. BGYO aims to create music that not only captivates the senses, but also sparks meaningful messaging that is relevant to youth today.

The other is BINI, an eight-member girl group composed of young, modern Filipinas who aspire to share their talent and passion with the world. You can check them out on YouTube.

Then again, government support or hindrance can also be rendered irrelevant. One member of the BTS Army, a daughter of one of my favorite economists, takes exception to the notion that BTS owes its success to government support.

“It’s funny because in their early days, when they really boomed in Korea and abroad (I’m talking 2015-2017), Bighit and BTS were not backed by the government.

“They were actually on a government blacklist because they were one of the few pop groups (and they were no-names then so it was a risk to their reputation in the K-music biz) who spoke against the Sewol ferry tragedy, which the government covered up.

“K-government didn’t start explicitly supporting their efforts until they were made tourism ambassadors, but that was rather late, in 2018, way after they got huge.”

That’s a good point raised by a BTS fan who has followed the group’s rise. If BTS can make it despite being on a government blacklist, there is no excuse for failure.

For Filipinos, a partnership between government and the private sector is a difficult requirement for success. Look at many PPP projects. The most successful PPP is now plagued by a harassment suit against the guys who introduced decent airport terminals in the country.

The best support the government can give the private entertainment industry is to let them thrive with the least intervention. Some tax incentives may help and probably a little marketing assistance through the Department of Tourism.

I agree with the suggestion of Lisa Nakpil to expand the responsibility of the Department of Tourism to include the international promotion of our culture. A Department of Tourism and Culture will go far in selling not just our scenic destinations, but also the hospitality and culture of the Filipino.

Economist Toti Chikiamco, who was with Dr Villegas in that forum with the foreign chambers when BTS was mentioned, has another take on how the government can help.

“It can support the performing arts by creating an enabling environment, for example, by providing universal broadband to allow streaming services to a greater percentage of the population or fiscal incentives for arts and performing schools.

“The best thing the government can do is to remove the foreign ownership restrictions in mass media and advertising. Let foreign capital come in and develop more Lea Salongas in an organized manner.

“It should also break up monopolies and remove the restrictions on telecommunications. We could have been a center for mobile and computer games in Asia.  Unfortunately, our telcos imposed onerous terms on mobile game developers and the few game developers here folded up.  Our creative developers ended up working in Singapore.”

Oh well. That’s our country. We must stop thinking we are the only game in the world and start acting like we need to compete with the rest of the world to give our very talented people the big break they deserve.

Boo Chanco’s email address is [email protected] Follow him on Twitter @boochanco

Follow me on twitter @boochanco