Online Music Distribution Strategy to Develop the future Hallyu Music Industry

Abstract

Purpose: The main aim of this study is to analyze and suggest new online music distribution models targeted to facilitate the development of the Korean Wave (Hallyu) music market in all locations of the world. This study is conducted through a close analysis of the prevailing distribution models, the unique challenges of the K-pop market, and the trends in new technologies. Research design, data and methodology: To address the issue of how the online music distribution market could be domesticated for the Korean music industry, a systematic review of the previous studies was conducted. The use of the PRISMA approach was followed so that an accurate and transparent method for choosing the studies is ensured. Results: According to the investigation of literature analysis, the online distribution strategy may consist of four key plannings as follows, 1. Leveraging Social Media and User-Generated Content Platforms, 2. Embracing Immersive and Interactive Experiences, 3. Fostering Direct-to-Fan Connections and Monetization, 4. Harnessing Artificial Intelligence and Big Data Analytics. Conclusions: Finally, collaboration and strategic partnerships will be vital. The Korean music companies should seek to cooperate with the technology companies, social media platforms, and the global music streaming services so that they can grow their market, acquire new technologies, and to better their online distribution strategies.

1. Introduction

The term ‘Korean Wave’ or ‘Hallyu’ indicates the global phenomenon of South Korean popular culture, including diverse aspects such as music, TV dramas, movies, and fashion. This cultural commodity has become hugely popular all over the world cutting across geographical and language barriers. Leading this wave is the Korean musical industry, in particular the genre of K-pop, with its catchy music, visually stunning music videos and perfectly choreographed dance sequences, which has charmed audiences around the world (Fuhr, 2015).

The Korean music industry owes its emergence to many factors like the strategic support and initiatives of the South Korean government, the surge in the number of talent agencies and their rigorous training programs, and the industry’s resilience in the face of changing consumer preferences and technological advancements (Lim & Lee, 2018). The Korean government acknowledged the potential of cultural exports as a strategic soft power tool and enforced the necessary measures to develop the entertainment industry, such as financial support, infrastructure investments, and international marketing activities.

Particularly, K-Pop has been the leader behind the success of Hallyu, with its wide variety of genres, innovative production methods and the focus on visually appealing performances. With social media and the Internet, Korean music companies have succeeded in creating a global fan base known as the “K-pop stans” who are highly interactive in their following and promoting their favorite artists. Such a strong bond between artists and their fans has played a huge role in making this industry popular and internationally recognized.

Nonetheless, despite such rises to fame, the music industry is confronted with obstacles in dealing with the digital complexity, intellectual property rights issues, and rapidly changing consumer and technological landscape. Solving these issues and harnessing the international popularity of Hallyu depends on original and smart solutions in online music distribution.

The online music distribution has changed the method by which music is accessed and monetized all over the world. The streaming platforms are the doors through which artists can get their work to the international audiences without a sweat. Fans can comfortably find large catalogs passing through geography. This democratization allows many voices and helps artists to grow even on an international basis (Kjus, 2016). In addition, such sites offer priceless information analytics for promotion and targeted marketing coordination of listener demographics and preferences. The electronic form cuts the manufacturing and physical distribution costs as compared to the traditional formats. Online sources of income come from premium subscriptions to channels and partners (Kübler et al., 2020). The development of the technology will push the quest for immersive audio experiences for the mobile and smart devices even further. As global streaming penetration is expected to increase, artists and labels have to ride on strong online practices to win the market and keep a loyal worldwide fan base. Seamless delivery of content through these online channels is the direction the future of the music industry lies in.

The main aim of this investigation is to analyze and suggest new online music distribution models targeted to facilitate the development of the Korean Wave (Hallyu) music market in all locations of the world. Through a close analysis of the prevailing distribution models, the unique challenges of the K-pop market, and the trends in new technologies, this research seeks to design a holistic framework. The suggested approaches aim to offer practical tips for Korean music artists, labels, and entertainment companies on how to use online platforms in widening their international exposure, developing global fanbases, and establishing Korea’s cultural presence through a flourishing music scene.

2. Literature Review

2.1. Overview of Prior Research on Online Music Distribution Models

The digital age and the internet have revolutionized the distribution landscape in the music industry. The online music distribution platforms, which provide streaming and digital downloads have obliterated the old physical distribution patterns through retail stores (Nakano, 2019). The previous research studies have addressed the emergence and growth of these internet-based music distribution models. One of the most reviewed models is music streaming services that include Spotify, Apple Music, and YouTube Music. Subscribers of these platforms would pay to enjoy the privilege accessing vast music libraries and as a result, the whole form of ownership where people used to buy CDs or digital downloads has been done away with (Aguiar & Waldfogel, 2018). The consequences of streaming on music consumption behavior, artist royalties, and the total revenue of the music industry has been investigated by researchers (Datta et al., 2018).

Another distribution model that has been looked at is the direct-to-fan approach whereby artists bypass the conventional record labels and distribute their music directly to the fans from their sites or platforms such as Bandcamp (Hesmondhalgh et al., 2019). This model has been studied in terms of its potential in transforming the traditional record label system and making the singer the leading decision-maker ruling over his/her music and income.

Also, the scholars investigate the role of social media, YouTube, SoundCloud, TikTok and other user-generated content platforms in music distribution and promotion. They have allowed the artists to gain fans, promote their music, and monetize their content through ad revenue sharing and influencer marketing. Even though the studies outline various internet music models, researchers have also emphasized problems associated with these models such as copyright violation, inadequate artist compensation, and the monopoly of major streaming platforms (Arditi, 2018).

2.2. Strategies Used by Major Music Streaming Platforms

Some of the popular music streaming services include Spotify, Apple Music, and Amazon Music that have implemented different ways to attract and retain customers as well as earn profits. The methods have been addressed in the previous research studies. The tactics of personalized playlists and music recommendations based on the listener’s taste and listening habits are two main strategies. Aguiar and Waldfogel (2018) claim that streaming services can enhance user engagement and retention through the delivery of personalized listening experience via data analytics and machine learning algorithms. The research on the impact of these recommendation algorithms on user satisfaction, listening behavior, and music discovery has been conducted (Schedl et al., 2018).

Content exclusivity and record label or artist partnerships are other two strategies that streaming services employ. A specific platform is generally given the exclusive right to broadcast a live show, a new album launch, or behind-the-scenes footage, to attract subscribers. Furthermore, the music services are required to develop the user experience of offline listening, high-quality audio streaming, and the possibility of accessing an online music library from any device.

The work done by Hamari et al. (2019) is aimed at establishing the effects of these user-centric enhancements on user satisfaction, loyalty, and willingness to pay for premium subscriptions. The monetization models that the streaming platforms had piloted include freemium, premium subscription and sponsorships or adverts from brands. Other studies have also examined these models from the points of view of their efficiency, their share of the overall music industry revenue, and the profit for the artists and labels.

2.3. Challenges Faced by the Korean Music Industry

The Korean music industry has achieved great global success in the era of the Hallyu wave, but it is also in the face of several challenges in digital technology moving at a fast pace. Previous studies have pointed out some of the main problems of the industry. A major challenge is the control of the main global streaming services such as Spotify and Apple Music that have an overwhelming power to determine the pattern of music distribution and consumption (Bello & Garcia, 2021). These platforms typically favor mainstream content in English, making it challenging for Korean performers to garner attention and attract larger audiences. Jin et al. (2019) discussed the impact of this power asymmetry and requirements for Korean music companies to negotiate favorable conditions and promotion tactics.

Another problem relates to intellectual property problematic and piracy of music which is actually a challenge that continues to our digital age. Although there has been a surge of legal streaming services, illegal sharing and downloading in emerging markets is still high, especially where the Korean Wave is popular. Researches have investigated the effect of piracy on the revenue streams of the Korean music industry and the requirement of stronger anti-piracy measures (Dey et al., 2019).

In addition, the Korean music industry cannot adapt to fast change of consumer preference and technological development. Such a shift is a result of the social media platform growth and the user-generated content that has hijacked traditional marketing and promotion strategies. Chung and Koo (2023) have investigated how the Korean music companies could take advantage of these platforms effectively and keep control of what they sell and their brand image.

Figure 1: Finding of the Research Gap

Table 1: Supporting Prior Resources to Find Research Gap

2.4. Research Gap

Even though earlier studies investigated online music distribution models and techniques employed by the major platforms, there is a lack in developing elaborate strategies based on the peculiarities of the Korean Wave (Hallyu) music industry. Existing studies were predominantly directed towards Western markets, neglecting the unique subtleties of the Korean music ecosystem, its global aspirations, cultural effects, and the particular K-pop genre. In addition, dynamic development of the digital technologies and change of the consumer behavior require constant analysis and adjustment of the distribution strategies. Bridging this gap through a contextualized analysis and the development of innovative strategies can provide in-depth information to utilize the global popularity of Hallyu and continue its development in the digital age.

3. Research Design

To address the issue of how the online music distribution market could be domesticated for the Korean music industry, a systematic review of the previous studies was conducted. The use of the PRISMA approach was followed so that an accurate and transparent method for choosing the studies is maintained (Kang, 2023) The PRISMA approach involves four main stages: identification, selection, characterization, and integration. An exploratory search was carried out in the identification phase through several academic databases which included Web of Science, Scopus and Google Scholar. The search terms employed were a blend of keywords pertaining to “online music distribution,” “streaming platforms,” “Korean music industry,” “Hallyu,” and “K-pop.” The initial search resulted in a pool of 1,257 potentially relevant studies.

At the screening stage, the titles and abstracts of the identified studies were assessed to eliminate irrelevant or duplicate articles. Researches that did not concern online distribution strategies, Korean music industry or other related subjects were eliminated. This screening was followed by the inclusion of 347 studies for revision. An eligibility phase involved a thorough review of the remaining full text of studies. To bypass the irrelevance and poor quality of the chosen studies, more specific inclusion criteria were adhered to. These criteria included (See the below Figure 2).

Figure 2: The Conditions to Obtain the Relevant Studies

When these criteria were applied, the final analysis comprised of 108 studies. This research selected the PRISMA technique since this approach is systematic and comprehensive in searching, appraising and synthesizing the relevant previous studies (Tricco et al., 2018; Kang, 2020; Phommahaxay et al., 2019). By adhering to this systematic process potential for bias decreases as well as possibility of missing out on crucial studies, therefore, ensuring the robustness and validity of the study.

Further, the PRISMA approach adheres to the canons of evidence-based research ensuring a high level of transparency and replicability (Boaye Belle & Zhao, 2023). Details of the search, screening, and selection methods provide an opportunity to other researchers to evaluate the methodology and confirm the outcomes. After selecting the studies, the selected studies were analyzed and synthesized to identify the main themes, approaches and findings in regard to the online music distribution models, challenges facing South Korean music industry as well as solutions in (Kim & Kang, 2022). The systematic review of previous studies served as a foundation for the recommendation of creative and context-specific methods that could contribute to the growth and worldwide reach of the Korean music industry and the Hallyu wave.

4. Findings

4.1. Leveraging Social Media and User-Generated Content Platforms

Social media and user-generated content platforms are the instruments for music distribution and promotion in the new age. These platforms can be utilized by the Korean music industry to target international audience, facilitate fan engagement and promote music consumption. An active strategy includes participating with the fans on some of the platforms like YouTube, TikTok, and Instagram. Through uninterrupted release of high-quality content, some of which include music videos, behind-the-scenes footage, and interactive challenges, Korean artists and labels can develop a powerful online presence and foster a loyal fanbase (Tan et al., 2020).

Besides, the Korean music companies can benefit from the influencer marketing that they can achieve by working together with the popular content creators as well as social media personnel. With the popularity of these influencers, the promoted Korean artists along with their music will be recognized to their followers thus boosting the awareness and purchases of the music. In addition, user-generated content can be used as a powerful advertising asset. Through promoting fans to come up with their creation and share covers, dance challenges, or reaction videos, Korean artists are able to build fan communities and grassroots marketing (Kim et al., 2021). Such organic user-driven promotion is capable of providing a very strong message to the new audience and keeps the fans loyal.

Nevertheless, the need for Korean music companies to utilize social media and at the same time retain the influence over their content and brand image is crucial (Zhou et al., 2021). Measures should be taken to safeguard the intellectual property rights, control possible conflicts or negative publicity, and uphold a coherent brand story.

4.2. Embracing Immersive and Interactive Experiences

With the advancement of technology, the Korean music industry can use immersive and interactive experiences to enrich fan engagement and consumption of music which is further linked to music consumption in Korea. Korean artists and labels can leverage the adoption of new technologies to separate themselves from their competitors to offer their global fan base unique and memorable experiences. One potential approach is to integrate virtual reality (VR) and augmented reality (AR) into music events. Korean music companies are capable of developing VR concerts in which fans can attend live performances via the virtual world. Besides, AR elements can be included in music videos, album artwork, or promotional materials that allow the enthusiasts to interact with their preferred artists in a very different manner.

Another approach is to understand the potential of blockchain technology and Non-Fungible Tokens (NFTs) with respect to music distribution. By tokenizing exclusive content, such as rare behind-the-scenes clips, limited edition items, or unique digital artworks, Korean artists allow their fans to possess, ownership feeling and exclusivity. This tends to create a closer relationship with the fans and develops new sources of profit. Further, Korean music companies can provide online interactivity based on social features also in the streaming services. This can be achieved through gamification features that enable fans to earn prizes or get access to special content by engaging with the platform or participating in challenges.

Nevertheless, the Korean music companies should consider the cost, technical aspect and potential risks associated with such immersive and interactive strategies. A successful execution requires technology partners, effective marketing strategies and in-depth knowledge of fan choices (Tan et al., 2020). Immersive and interactive experiences will serve the Korean music industry’s competitive edge, improving relationship with fans and developing new revenue streams in the dynamically changing digital world.

4.3. Fostering Direct-to-Fan Connections and Monetization

In the digital era, the principles which the Korean music industry can rely on are methods of direct interaction between the performers and the audience including the artist and his fan monetization of his content without the help of traditional intermediaries. Direct-to-fan relationships are developed in the process with Korean artists creating a loyal and interactive fan base, which will, in turn, generate more streams of revenue. One of the ways is to create artist-owned platforms or websites that are official where fans can get access to exclusive content, merchandise, and experiences. The user-generated content platforms provide subscription type models enabling fans to pay a monthly, quarterly or annual subscription to watch the behind-the-scenes footage, live-streamed events, or for early releases (Li et al., 2019). This easy link allows artists to receive more profits and have good information about their audience.

Moreover, Korean artists can use crowdfunding and fan-funding models to fund new projects, albums, or tours (Kamara II, 2018). When artists directly involve the fans and give special rewards or experiences, they can capitalize upon the intense devotion of their fans and raise money and ownership as well as a community spirit. In addition, Korean music companies can utilize blockchain-based technologies to tokenize and sell digital collectibles or non-fungible tokens (NFTs) as limited editions to their fans (Balaji et al., 2023). Such digital assets can be unique artwork, unreleased tracks or virtual experiences, challenging fans with a perception of rarity and ownership.

However, Korean artists and labels should practice caution in utilizing direct-to-fan methods next to their conventional associations with stakeholders of the music industry including record labels and streaming platforms (Anderton et al., 2022). The clarity of communication, clear contracts, and proper partnerships will be essential in working with this changing landscape. By encouraging direct to fan relationships and monetization models, the Korean music industry can achieve strong fan engagement, unique revenues, and content and brand control.

4.4. Harnessing Artificial Intelligence and Big Data Analytics

The Korean music industry in the e-music era may employ the strength of artificial intelligence (AI) along with big data analytics to gain the competitive edge and refine their internet distribution tactics (Marr, 2019; Amaliyah et al., 2023). One of the main applications of AI is implementation of personalized recommendation systems. Based on the big data that characterizes the user preferences of the user, listening habits and consumption behaviors, Korean music companies can use AI algorithms to generate personalized playlists and artists or tracks suggestions to the user (Bonini & Magaudda, 2023). This enables user interaction, music discovery and hence consumption and sales.

In addition, AI can be utilized for content creation and improvement. The improvement of the quality and attractiveness of AI-driven video editing and visual effects helps in enhancing music videos and promotional content. Nonetheless, adoption of AI and big data analytics comes with a huge cost of technology infrastructure investment, data management systems and human resource expertise. Partnerships or acquisition of specialized expertise might be one of the requirements of Korean music companies to exploit the opportunities provided by these technologies (Feijóo et al., 2020). The adoption of AI and big data analytics in the Korean music industry put the industry in a position to know their audience better, show individual engagement that results in a better digital distribution of their music and a more successful revenue.

Table 2: Summarization of the Findings

5. Discussions

5.1. How The Proposed Strategies Give Direction for Korean Music Industry

The suggested strategies offer a comprehensive approach in unleashing the potential of mobile music distribution and aligning the Korean music industry with continuous growth and international triumph in the digital age. Through addressing the primary challenges and opportunities that will be upcoming in the next years, such strategies can aid the industry stakeholders to navigate with the changing digital landscape. Korean artists and labels that embrace social media and platforms of user-generated content are able to communicate directly with the global audience, encourage fan participation, and initiate organic marketing. Such an approach corresponds to the growing necessity to produce enveloping and customed for each fan experiences, which can form loyal and devoted fan bases. Further, it democratizes fans to be involved in the promotion and consumption of the Korean music, which may increase its market and popularity.

By using technologies such as virtual reality, augmented reality, and non-fungible tokens (NFTs) to create immersive and interactive experiences, the Korean music industry can distinguish itself, and give the fans unique and memorable experiences globally. This approach not only improves the fan participation but also opens new ways of monetization. This will keep them competitive in the international market and young, technology savvy audience will also be attracted by the innovations. Direct-to-fan connections and monetization models is a bridge to the direct relationship between Korean artists and their fans without more traditional intermediary. This approach allows more control over content disposal, revenue generation and fan data analytics. Through artist-owned platforms or crowdfunding initiatives that offer unique content, experiences, and digital collectibles, Korean artists can instill a sense of ownership and community among their fan base, making them even more attractive on a global stage. Application of artificial intelligence and big data analytics in the Korean music industry offers such tools that the industry can employ for content curation, personalization and marketing strategies. By leveraging AI-driven recommendation systems, personalized playlists, and data-driven insights, Korean artists and labels can drive users’ engagement, promote music discovery, and optimize the ways of resource allocation and market entry. This type of data-driven approach can provide a competitive edge in the oversaturated global market for music.

5.2. Practitioners’ Recommendations from Research Findings

Adoption of the proposed policies in the area of online distribution of music has a significant importance for the Korean music companies, artists and the industry professionals to stay competitive and to use the worldwide recognition of Hallyu, as referred to by these policies. Nonetheless, successful implementation necessitates a tactical integrated approach. The starting point is to capitalize on the development of robust digital infrastructure and capabilities. This involves the development of strong web-based solutions, use of data analytics tools, and collaboration with tech companies for access to new technologies such as virtual reality, augmented reality, and blockchain applications. Human resources obtained through up-skill and hiring of professionals in these fields are necessary.

Next, practitioners from the industry should attend to fan engagement and community building. Facilitation of direct user and artist interactions and content created by users through social media and artist-owned platforms may produce fans that are fiercely loyal. Other unique experiences, digital collectibles, and crowd sourcing opportunities can also help to strengthen these connections and create extra income. Furthermore, Korean music companies ought to opt for an ad-hoc and numbers-based perspective towards content generation and marketing. This data can be figured out through AI-based tools and big data analysis. This data-based approach will facilitate selection of content for development, personalization of targeting of marketing strategies, thereby, making the content relevant and engaging to international markets.

Fourth, the security of the intellectual property and the branding story management ought to be given due diligence. The growing attention of the Korean artists and their music is shown in various types of online media; thus, it is important to create strict anti-piracy measure so that all the doubts and controversies will be dealt with and the market will be consistent.

Finally, collaboration and strategic partnerships will be vital. The Korean music companies should seek to cooperate with the technology companies, social media platforms, and the global music streaming services so that they can grow their market, acquire new technologies, and to better their online distribution strategies. Following these guidelines, the Korean music industry professionals will be able to conveniently penetrate the digital market, establish deep relationships with the international audience, and will therefore be well positioned for a bright future in a new era of online music distribution.

5.3. Conclusion

The worldwide success of the Korean Wave as well as the popularity of digital technologies have provided the Korean music industry with both opportunities and dilemmas. The objective of this study was to investigate efficient online music distribution strategies to help the industry’s further development and success all over the world. Through a systematic review of prior research, four key strategies were identified: utilizing social media and user-generated content sites, engaging in immersive and interactive experiences, creating direct-to-fan relationships and revenue streams, and leveraging artificial intelligence and big data analytics. These techniques have a global appeal as they provide a well-rounded approach to acquiring a global audience, improving fan interaction, unlocking new sources of revenue, and optimizing content creation and personalization. Nevertheless, it is necessary to recognize the weaknesses of the current research. The outcome and recommended paths might become outdated or require adjustment when the digital world is very dynamic. In addition, the reliance of the study on the contemporary literature may omit the possible peculiarities or industry-oriented details, which are typical for the Korean music industry.

The further research should be focused on overcoming these limitations and exploring other ways of online musical distribution strategies. Long term study of the adoption and impact of the recommended strategies in the Korean music industry could improve the suggestions and bring useful lessons. Additionally, such areas of the research as development of the metaverse and Web3 technologies, their influence on the music industry and possible integration of such approaches with the suggested strategies will be worth studying. Also, it is recommended to conduct further studies to identify the dilemmas and prospects related to different distribution channels, namely, social media platforms, streaming services and blockchain solutions. Case studies and industry partnerships could help in understanding best practices as well as operational considerations in implementing these strategies in practice.