Episode 410: Why K-Pop Is Taking Over The World : Planet Money America still makes the world's most popular music. But other countries are fighting for their share of the global market. In other worlds: Gangnam Style is not a fluke.

Episode 410: Why K-Pop Is Taking Over The World

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ROBERT SMITH, HOST:

America used to lead the world in making cars. Now we don't. China does.

ZOE CHACE, HOST:

We used to be the No. 1 maker of steel. American steel built bridges and ships all over the world - not anymore.

SMITH: But there is one big thing that America still produces.

(SOUNDBITE OF SONG, "WE ARE NEVER EVER GETTTING BACK TOGETHER")

TAYLOR SWIFT: (Singing) We are never, ever, ever getting back together. We are never...

SMITH: Pop music - American pop music. Go anywhere in the world, turn on a car radio in Italy or walk into a store in Mozambique, and you can hear the essence of America.

(SOUNDBITE OF SONG, "WE ARE NEVER EVER GETTING BACK TOGETHER")

TAYLOR SWIFT: (Singing) You go talk to your friends, talk to my friends, talk to me. But we...

CHACE: Think about it this way. Taylor Swift is just another American product. OK, this particular song, it's produced by a Swede. Her record label's owned by an international conglomerate. But Taylor Swift - listen to her. She's essentially an American export. And just like any export of any American thing, there are other countries who want our market share. They want the No. 1 song in the world to be from their country, in their language. Other countries want to have their own Taylor Swift.

SMITH: So imagine if another country could create a secret pop music weapon to take over the world.

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: Oppa Gangnam style. Gangnam style...

CHACE: This right here - this is one of the most popular songs in the world right now. It's in Korean. It's from this rapper called Psy. And the video has more than 470 million views. That should sound like a lot. It's one of the most watched videos on YouTube ever.

SMITH: And if you haven't seen it, you have to stop this podcast right now, and you have to go watch this.

CHACE: It is awesome.

SMITH: It has this guy in a suit with the big, black glasses, and he's doing this horsey dance through Korea. It's crazy. And it's easy to dismiss after you've seen the video. It's easy to dismiss "Gangnam Style" as this novelty song, sort of a one-off like the "Macarena." But that would be a mistake because Korea has spent the last 20 years preparing for this moment. They have built a pop music industry from scratch, and they hope that this industry can compete with America, that one chubby, crazy-dancing "Gangnam Style" dude can take over.

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: (Singing) Oppa Gangnam style. Gangnam style. Op-op-op-op-oppa (ph) Gangnam style.

CHACE: Hello, and welcome to PLANET MONEY. I'm Zoe Chace.

SMITH: And I'm Robert Smith. Today, the battle over the pop charts - how Korea figured out the secret to launching a hit record and how that secret can propel an entire economy.

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: (Singing) Oppa Gangnam style. Hey, sexy lady. Op-op-op...

CHACE: Now, the story of the Korean economic miracle - that is not a new story. Korea's economic growth has been incredible over the last couple decades. They export lots of stuff - cars, electronics. Like, it is not weird over here to drive in a Kia, talking on a Samsung phone. But lean over, turn on your car radio to any Top 40 station, and you'll probably hear something like this.

(SOUNDBITE OF SONG, "WE FOUND LOVE")

RIHANNA: (Singing) We found love in a hopeless place. We found love...

CHACE: That's Rihanna, of course. And I actually went to the Top 40 station in downtown New York. I went to 92Q - Power 92 (ph) - and I sat in the studio with the DJ. And I have to say, it was exciting to me what happens next. The DJ, Micky (ph) - she cues up one of the most requested songs in America, and this is what she hits.

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: (Singing) Oppa Gangnam style. Gangnam style. Oppa. Op-op-op-op-oppa (ph) Gangnam style.

MICKY: (Singing in Korean).

CHACE: Do you even know what that means?

MICKY: No (laughter).

SMITH: OK. It's easy to laugh at this whole thing because the song is a good time. The video is crazy. Most Americans can't sing along to it, but they do know the dance by now. But don't laugh, America, because "Gangnam Style" shows how far Korea has come and how fast they have developed their music industry.

It took America basically a hundred years to achieve worldwide pop dominance. We learned a lot of hard lessons. We went through a lot of depressions, we - times when the record industry - they said, we're going to fail; we will never sell any more records. Korea is amazing. They did the same thing in just 20 years. They took the American lessons of pop music, and they figured out how to do it better.

CHACE: That's what we're going to show you. So let's go through three big lessons from the American cultural history and show you how the Koreans did it.

SMITH: Lesson one that the Koreans picked up from America - music can be manufactured just like any other product. Here's the way it played here. We learned this lesson pretty early from the first pop song ever - or, at least, according to Eric Weisbard. He's a professor of American studies at the University of Alabama. And he says that the first pop song came out 150 years ago. Odds are, even after all this time, you still know the lyrics.

ERIC WEISBARD: "Oh! Susanna" by Stephen Foster, which is performed for the first time on September 11, 1847 - it became a song that Americans all across the country sang. It was the song they sang as they traveled west for the gold rush.

(SOUNDBITE OF SONG, "OH! SUSANNA")

2ND SOUTH CAROLINA STRING BAND: (Singing) Oh, Susanna, don't you cry for me when I come from Alabama with my a banjo on my knee.

SMITH: The guy who wrote this was Stephen Foster, who, it turns out, was a man ahead of his time because although everyone was singing it, nobody was paying for it. Stephen Foster didn't make much money from this song. He died penniless. Songwriting back then was, like, this specialized art form. It wasn't industrialized yet. The song would maybe live for a night or a week or they'd sing it after a vaudeville show, but there was no system for selling music, for making money off of it, even if a song was hot. But at the turn of the century, Henry Ford - he starts perfecting the assembly line, right? And so did the American music industry.

(SOUNDBITE OF SONG, "ALEXANDER'S RAGTIME BAND")

BOSWELL SISTERS: (Singing) The bestest (ph) band what am, honey lamb. Come on along. Come on along. Let me take you by the hand up to the man, to the man, who's the leader of the band. If you want to hear that Swanee...

SMITH: This song was written by Irving Berlin, and he was part of something called Tin Pan Alley, which was an actual street here in Manhattan at the turn of the century - 28th and Broadway, to be exact. And it was basically a bunch of guys in offices with teeny little pianos who, all day long, would churn out music. They would get assignments, and they would just bang out one popular hit after another. Here's Eric Weisbard again.

WEISBARD: It's a process. It's not about one hit. It's about, how do you have multiple hits? That is already figured out in the 1900.

(SOUNDBITE OF MUSIC)

SMITH: This was how to make money with pop music. Whether it was swing bands or Motown or pop music today, "American Idol," America embodied this spirit, that you just put a bunch of creative people together, and you churn out the product.

CHACE: Now, fast-forward 100 years to Korea, 1992.

(SOUNDBITE OF SONG, "NAN ARAYO (CLUB MIX)")

SEO TAIJI AND BOYS: (Singing in Korean).

CHACE: Korea creates its own version of Tin Pan Alley. They have their own Irving Berlin type, and it's this guy, Lee Soo-man. At the time, Korea's in this export boom. It's the early '90s. It's the era of the boy band - Boyz II Men, New Kids on the Block. And Koreans have this brand-new disposable income, and they're starting to spend it on music. And this guy, Lee Soo-man, figures, let's build a business around this. Let's build a business around creating pop hits. I called Mark Russell about this. He wrote this great book "Pop Goes Korea."

MARK RUSSELL: Turning that modern pop idol phenomenon into a factory - he industrializes it. He creates a training system and teaches the kids, you know, how to sing, how to dance, how to behave. He wants it very, very clean-cut.

CHACE: Then, in the mid-'90s, Lee Soo-man got the big break that let him know he was on to something.

(SOUNDBITE OF SONG, "CANDY")

H.O.T.: (Singing in Korean).

CHACE: This is H.O.T. It stands for High-Five Of Teenagers, actually. But this band was huge in the mid-'90s. Lee Soo-man created this group from top to bottom. And other record labels saw this, and they started doing the same thing, building a business around the boy bands.

SMITH: OK. So let's get to lesson two for worldwide pop music success. All right, you've industrialized the product, right? How do you get it out to obsessed teenagers of the world? OK, let's start again in America. The American music industry took off when they started to take control of the distribution system. A hit song isn't a hit unless everybody hears it. So in America, that meant the phonograph record, of course, and then radio and then, after the Depression, a nifty piece of high-tech distribution.

WEISBARD: The jukebox saved the record industry.

(SOUNDBITE OF BENNY GOODMAN'S "SING, SING, SING")

SMITH: The jukebox is amazing because it immediately created this demand for records. And soon enough, every bar and diner had a jukebox, and they all needed records. And even better, it had to be the kind of record that lots of people wanted to hear, and because this was a machine that played them, you knew, for the first time, statistics - what people were playing. And, you know, Eric Weisbard tells the story about record executives watching a waitress, like, work a very long shift, hearing this song over and over again, and then when everybody goes home, she puts money in the jukebox and listens to the same song again. And this was a wake-up call to the music industry.

WEISBARD: Oh, my God. There is no end to the number of times we should be playing our hit songs.

SMITH: And American music adapted to the jukebox. Pop music became louder, faster, more fun - music for groups, not just sitting with ma and pa and singing along to "Oh! Susanna." Top 40 radio was essentially a radio version of the jukebox. America had its distribution system.

CHACE: All right, now Korea - Korea learned the same lesson about technology. But their huge advantage is that they didn't come of age in the jukebox era. In America, pop music means audio, right? Like, we invented pop music when all you could do was listen to it. In Korea, pop music always comes with an image.

(SOUNDBITE OF SONG, "FANTASTIC BABY")

BIG BANG: (Singing in Korean).

CHACE: This is Big Bang, an incredibly popular Korean pop band, releasing a record on a TV show called "Inkigayo." New country has a new infrastructure. While our record labels were built on the radio system, Korea's were built on television. We called up Danny Im. He's this hip-hop star from back in the '90s in Korea. And he remembers, when you release a song in Korea, you debut it on national television.

DANNY IM: In Korea, basically, almost everything's national television, so - because it's such a small country. So everyone sees everything.

CHACE: From the very beginning, Koreans were used to looking for Korean music on their screens. To get new music, they watched television. And everyone was watching the same thing. And this is going to turn out to be a huge competitive advantage for Korea.

SMITH: Yeah, because the third thing you need to have to take over the world - the third lesson of pop music domination is this. You have to combine the industrial product - your hits from the hit factory - and the technology you have at hand into a neat little package.

(SOUNDBITE OF SONG, "BYE BYE BYE")

NSYNC: Hey, hey. (Singing) Bye, bye, bye. Bye, bye, bye. Bye, bye, bye, bye.

SMITH: This isn't exactly the package I'm referring to - the boy band NSYNC. They're from the year 2000. No, I'm referring to the way in which people heard this music, which was a brand-new technology - CDs, compact disc. And the amazing thing about CDs were that you could ship these things anywhere in the world. They were small. They were light. This was a way that global music happened. And so when the boy band NSYNC released this album, "No Strings Attached," they sold 2 million copies in a single week. The record industry has never done better.

NSYNC: (Singing) I want to see you out that door, baby, bye, bye, bye. Bye, bye, bye, bye. I don't want to be a fool for you.

CHACE: The Korean music industry came of age with a different neat, little package. Their answer to lesson number three - it's YouTube. Korea is one of the most wired countries in the world. The moment the country was online, everyone was online, and everyone had a little phone. And everyone was watching videos on tiny little screens.

(SOUNDBITE OF SONG, "GEE")

GIRLS' GENERATION: Uh huh. Listen, boy. My first love story...

CHACE: This song is "Gee" by the Korean pop group Girls' Generation, and it's really worth just watching the video while I explain this because that's kind of the point of this song, is the video. The record labels in Korea figured out pretty quick that, to get to their audience, they had to go to YouTube. This group of girls, Girls' Generation, they look like they were born on YouTube. This is not a group that had a song and then made a video later. The video, in Korea, is always a part of the way the music is released.

DAVID MARX: I think they originally put them up to connect with, you know, local Korean fans.

CHACE: David Marx works for Google, and it's his job to watch trends in East Asia. And he says these videos were a hit in Korea. But then something else remarkable happened. When the Korean record labels started putting all these videos up...

MARX: They soon found that, you know, people around the world were watching it. And in a lot of cases, the majority of views were coming from overseas.

(SOUNDBITE OF SONG, "GEE")

GIRLS' GENERATION: Gee, gee, baby, baby, baby. Gee, gee, gee, gee...

CHACE: The labels saw there was a huge market for bands like Girls' Generation outside Korea. On YouTube, you can see who's watching and where they are. And it turns out, it was people in Europe. It was a lot of people in Japan. It was people everywhere. And that's how the record labels knew where to tour. They knew their customers wanted them before they even got there. A year ago, Girls' Generation sold out Madison Square Garden.

SMITH: To sum it up, Korea learned the three important lessons of pop music dominance. Let's recap them. Industrialize your product, find a distribution mechanism, and wrap it all up in a neat, little package. So 20 years of hard work, innovation, jumping on the latest technology - all of this laid the groundwork for this guy.

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: Oppa Gangnam style. Gangnam style.

CHACE: This amazing song - this does not to spell the end of the American music industry. But it is an important moment because it shows that there is this real competitor out there, one who moves faster and actually, in some ways, is better prepared to serve the video-obsessed, mobile-phone-carrying teenager that we have everywhere.

SMITH: And the secret to all this is, it's not just about the teenagers. And it's not just about the music. There is much more at stake here because having a cultural industry, like this one, like pop music, one that's capable of capturing the world's attention - this is actually a brilliant economic strategy. Here's our American studies professor again, Eric Weisbard.

WEISBARD: The phrase that sometimes gets used is soft power. There's the military might of the United States, but there's also its ability to set the cultural terms for the rest of the world.

CHACE: If people in other countries watch our movies, listen to our music and love our stars, they're more likely to buy our stuff. They'll drink the soft drinks that they endorse. They'll buy the clothes that the musicians are wearing - the watches and the jewelry. And once someone associates a country with quality, it bleeds over into the sales of electronics and washing machines and tools.

SMITH: So this song, as awesome and as fun as it actually is - it's an indication of something really big. And in fact, just the other day, the president of the World Bank, Jim Kim - he's a Korean-American - he was asked about "Gangnam Style" at a forum for The Wall Street Journal. The president of the World Bank does not treat this song as a joke. He knows that this song is an indication of something big for Korea.

(SOUNDBITE OF ARCHIVED RECORDING)

JIM YONG KIM: This is part of their economic strategy. Part of their economic strategy is, they want to be the producers of the most popular cultural products in the world. And it's an indication of their aspiration.

CHACE: Here's the thing. We take for granted that the developing world is going to buy our stuff because they like our style. We've taken that for granted for decades. When you go to any country in the world, Jay-Z's "Empire State Of Mind" will probably be blasting out of a car somewhere. That's been a huge advantage for our economy. But if consumers around the world are buying mostly Asian stuff, that's a really different global economy than what we've been used to.

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: (Singing in Korean)

SMITH: As always, we love to hear what you thought of today's show. You can write us - planetmoney@npr.org - or go to our blog - npr.org/money.

CHACE: You can find us on Facebook and Twitter. And, of course, this week you should go to Spotify if you want a playlist of Korean pop music. I'm Zoe Chace.

SMITH: And I'm Robert Smith. Thanks for listening.

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: Hey, sexy lady.

Op-op-op-oppa Gangnam style.

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