The Economy Boost Through Product Placements in Korean Dramas

Introduction

The display of products in TV shows and series has been widely used as a new form

of marketing. Product placement (PPL) can be described as the indirect advertisement of a

product shown in forms of props or background in TV programs. With the current trend of

marketing moving towards a more digitalized world, PPL has been proven to be a successful

way of marketing. Instead of watching lengthy commercials on a cable or satellite TV

channels, it is more common for people to be accessing media through new technologies such

as smartphones or tablets. A viewer’s defence against advertisement is lower when it is

shown in the form of films which gives companies a chance to sell their product more

effectively (Lehu 2007, 63). PPL has become a more effective way to show the audience a

product as it can increase the brand awareness and the brand’s image (Lehu 2007, 65). This

study will examine the economic impact given by Korean dramas through PPLs. We will be

using the TV series Descendants of the Sun (KBS2, Lee Eung-bok and Baek Sang-hoon,

2016) as an example to examine the regulations of PPL, PPL as a main revenue stream,

effects of PPL on product exports, viewers thoughts and opinions on PPL, different forms of

PPL in Korean dramas as well as the international impact a drama can bring.

Regulations Governing PPL in South Korea

Up until 2010, the Korean government strictly prohibited product placement (PPL) in

broadcasts as they wanted to ensure that TV shows were not created purely to benefit the

sponsoring companies. The broadcast time of advertisements had to be separated from

regular TV programs. Broadcasting companies were obligated to follow a code of conduct

regarding to PPL. If they violate the rules, they will face legal consequences under the

Broadcasting code such as apologizing to the viewers, discontinuing the show, or changing

the producer of the show (Chae and Sun 2013, 58). Although there were strict regulations

regarding PPL, PPL was still allowed to a certain extent. If broadcasting companies followed

the criteria given by the government, certain PPLs were allowed. In many TV shows, PPL

was used by blurring or changing the brand logo. Although the brand name was not directly

shown, many viewers could easily guess what the product was.

As technology continues to develop, there are many new methods to promote a

product through the media. On top of cable TV and satellite TV, other networks have been

introduced such as internet based TV and mobile TV (Youn and Kim 2006, 155). Previously,

companies mainly relied on TV advertisements as the channel of promotion. However, as

new media markets continue to develop, the advertisement revenue through TV broadcasting

continued to decrease (Youn and Kim 2006, 164). In a research conducted by Tierean and

Roman (2015), more than 95% of TV viewers do not actually watch the commercials in

between TV programs.

In 2009, the Broadcasting Act was revised and PPL was then permitted conditionally

to terrestrial and cable networks (Lee, Kim, and King 2012, 277). With this new revision,

PPL is now allowed in programs that serve for the purpose of entertainment and culture.

There are four specific guidelines that broadcasting companies have to follow when they

show a sponsored product. First, the TV program must inform the viewers of the sponsored

companies at the beginning of the show through credit subtitles. Second, the program must

not mention the product itself or recommend the viewers to purchase the product. Third, the

logos and product of sponsored items must not exceed 5% of the total showing time of the

program. For example, in a sixty-minute standard Korean drama episode, PPL should not

exceed a total of three minutes. Lastly, the size of the product or brand logo must not exceed

25% of the size of the screen (Chae and Sun 2013, 75).

Revenue Boost for TV production Through PPL

PPL is favoured by broadcasting companies as it is a steady and high source of

revenue for the production companies. If broadcasting companies are able to secure a lot of

advertisements for their program, the cost of production will reduce significantly for the

broadcasting company. Using Descendants of the Sun as an example, the whole series cost 13

billion won to produce.1 The minimum cost of PPL is reported to be 10.5 million won per

unit price (Jin and Liu 2011). If the production team secures 16 sponsors and show the

products throughout the 16 episodes, PPL is estimated to cover up to 20% of the production

cost of Descendants of the Sun. As the regulations on PPL become more lenient, many

production companies use this as their main source of revenue.

Examples of PPL in a Drama

In Descendants of the Sun, an excessive amount of PPL was used. The average

amount of sponsorship produced from PPL is approximately 1 billion won; however,

Descendants of the Sun generated 3 times the regular amount of revenue from PPL.2 In a 60-

minute episode, a minimum of 10 products were shown. Many viewers agreed that there was

too much PPL in this drama to the extent where it felt like watching a lengthy commercial.

Descendants of the Sun was sponsored by a total of 50 different companies such as Laneige,

Samsung Galaxy Note 5, Hyundai Motor, Dal.komm Coffee, Subway etc. In episode 13,

many viewers have complained about the extreme amount of PPL shown. Examples can be

1 Park Jin-hai, “‘Descendants of the Sun’ rewrites K-drama history,” The Korea Times, Last modified March 19, 2016, Accessed on November 20, 2017, http://www.koreatimes.co.kr/www/news/culture/2016/03/201_199733.html.2 Park Jin-hai, “Blatant product placement mars K-dramas,” The Korea Times, Last modified April 29, 2016, Accessed on November 20, 2017, http://www.koreatimes.co.kr/www/news/nation/2016/05/116_203736.html.

seen in figure 1 to 8 below. In this particular episode, PPL has definitely controlled the plot

line to a certain extent. The main leads, Kang Moyeon and Yoo Shijin would go on dates at

Subway or Dal.komm Coffee. Before Seo Daeyoung kisses Yoon Myungju, he shows off the

autopilot function of the car from Hyundai Motors. Also, the characters were always eating

Snickers chocolate bars.

Figure 1. Hyundai Motor PPL Figure 2. Dal.komm PPL

Figure 3. California Almonds PPL Figure 4. OCOO PPL

Figure 5. Samsung Galaxy Note 5 PPL Figure 6. Subway PPL

Figure 7. Snickers PPL Figure 8. Snickers PPL

After broadcasting the show, the production team and broadcasting company was reviewed

for excessive PPL by the Korea Communications Commission.3 At the end they received a

warning and were advised to follow the correct protocols for PPL.4

PPL effects on Korean product export

TV series become more and more popular in East Asia and many of the trends in

Korea have been followed by viewers of these shows. As the Hallyu wave continues to grow,

3 Park Jin-hai, “Blatant product placement mars K-dramas,” The Korea Times, Last modified April 29, 2016, Accessed on November 20, 2017, http://www.koreatimes.co.kr/www/news/nation/2016/05/116_203736.html.4 “‘Descendants of the Sun’ receives warning for PPL,” HANCINEMA, Last modified May 12, 2016, Accessed on November 20, 2017, http://www.hancinema.net/descendants-of-the-sun-receives-warning-for-ppl-94486.html.

it has been reported that the export of Hallyu-related items such as beauty products continues

to increase (Chae and Sun 2013, 67).

Song Hyekyo is the female lead of Descendants of the Sun as well as the brand

ambassador for a beauty brand that is sponsored in the show, Laneige. Throughout the drama,

she was shown to be using the foundation cushion and two-tone lipstick produced by

Laneige. The lipstick then became a best seller in March 2016 and sold out in certain stores.

The product was constantly searched online by viewers after the show has been broadcasted.

Laneige has also revealed that there has been a positive impact on their brand and products

throughout the show. In a statement made by the brand manager from Laneige Singapore,

Doreen Chia, she has stated that “[they] have seen a spike in sales for the colours of Laneige

Two Tone Lip Bars featured in the show and have seen an increase in the number of visitors

on the brand website”.5

Usually TV dramas from Korea are not broadcasted till months after it is broadcasted

in Korea. However, Descendants of the Sun was broadcasted in Korea and China

simultaneously. This has given the viewers in China a chance to purchase the products shown

through PPL immediately without a delay. Hyundai Motors stated that they expect to expand

their market to China through PPL in Descendants of the Sun. After the show has been

broadcasted, the o Hyundai vehicle Song Jongki uses have had an sales increase of 10%.6

Viewers Response to PPL

Many would argue whether or not PPL is ethical and if broadcasting stations should

allow this much PPL in their shows. When viewers decide their stance against PPL, the two

main aspects that affect their attitude the most are the realism enhancement and ethical

5 Vivienne Tay, “Descendants of the Sun shines bright for brands,” Marketing Interactive, Last modified April 21, 2016, Accessed on November 9, 2017, http://www.marketing-interactive.com/descendants-of-the-sun-shines-bright-for-brands/.6 Cho Chung-un, “Descendants of the Sun buoys Korean Economy,” The Korea Herald, Last modified March 31, 2016, Accessed on November 9, 2017, http://www.koreaherald.com/view.php?ud=20160331000660.

appropriateness (Lee, Sung, and Choi 2011, 481). In Korea, people are more likely high

moral and legal obligations in marketing since they are a society with Confucian cultures

(Singh et al., 2007, 90).

Using Descendants of the Sun as an example, we can further investigate if the high

amount of PPL is ethically justified. First, the main plot line of this show was not affected

due to PPL. The plot line of war and healing was still delivered to the audience regardless of

the excessive PPL. The writers were still able to create a remarkable and successful plot line

which appealed to a high amount of audience. On the other hand, the minor details of the

show were undeniably restricted because of PPLs. For example, when Yoo Shijin and Kang

Moyeon would go on dates, most of the times they would be in Subway having sandwiches.

The drama would show scenes where they order Subway sandwiches and enjoy it immensely.

Another example would be that every time Kang Moyeon is at home, she would first light the

2S Candle before she proceeds to anything else. With the minor add-ons to the show to

enhance the sponsored product, it has hindered the realistic aspect of this drama.

Without PPLs, Descendants of the Sun would not have been as successful. 30% of the

scenes were filmed in Greece and the entire production team spent one month aboard. The

total production costs were approximately 13 billion won. 65% of the budget were used in the

creation of the fictional country, Uruk, in Taebaek, Gangwon province. Without the aid of

sponsored products, the production cost would have significantly lowered. The quality of the

show would have had to compromise with the resources available as well.

With TV shows that have a high amount of PPLs, the realistic aspect of the show and

the ethical appropriateness is constantly questioned. Production teams should find a balance

between excessive consumerism and ethical ramifications.

PPL in the United States

PPL is not only used in Korea media marketing, it is also used worldwide as a

marketing strategy. In a study conducted by Lee, Sung and Choi (2011), it has been proved

that US viewers have a relatively positive attitude towards PPL. Similarly to Korea, realism

enhancement is one of the biggest factors contributing towards the attitude of viewers

towards PPL. On the other hand, materialism also had a big impact on their attitude. If a

person is more materialistic, they will response to PPL more positively. PPL in American TV

programs are definitely more subtle than Korean dramas. For example, many Apple products

are featured in TV shows, but they are usually mainly used as props without the focus on the

product unlike Korean drama. PPLs in American shows are more realistic and close to daily

lives. Another example would be a person buying a Coca Cola on their way to work.

Figure 9. TV series Suits (USA Network, Doug Liman and Dave Bartis, 2011) featuring an Apple Macbook

Figure 10. TV Series Breaking Bad (AMC, Vince Gilligan, Mark Johnson, and Michelle MacLaren, 2008) featuring Coca Cola

Geographic PPL to boost tourism

Other than products being shown on TV as PPL, another form of PPL can be the

onscreen location backdrop of the TV series. TV dramas have a longer filming and

broadcasting period than a regular movie or film, therefore it usually has an impact to the

location being filmed at (Su, Huang, Brodowsky, and Kim 2011, 806). Korean dramas have

proved boost tourism at locations that have been used as a backdrop PPL (Lin and Huang

2008, 224-225). For example, Namiseom Island, Jeju Island, Coffee Prince House, Dong Dae

Mun Design Plaza, N Seoul Tower etc. In order for the tourist spot not to be a one-time hit

because of the drama, many places tend to incorporate other attractions around the filming

site to build sustainable tourism in the area.

As seen in Table 1 below, the number of visitors in Korea continue to increase every

year except for 2015. On average, there is a 12.4% growth in visitors per year. China brings

in the most tourists per year followed by Japan, The United States, Taiwan, and Hong Kong.7

According to the cultural proximity theory, viewers prefer media and shows that are closer to

their culture (Su, Huang, Brodowsky, and Kim 2011, 806). This can also be seen in the

visitor’s numbers as 4 out of 5 of the leading countries that bring in the most tourist have a

similar cultural background with South Korea. Majority of these viewers are visiting South

Korea for touristic reasons, and TV shows and programs have contributed a lot to the growth

of visitors in South Korea.

Year Visitors in South Korea Growth from previous year

2010 8,797,658 12.5%

2011 9,794,796 11.3%

2012 11,140,028 13.7%

2013 12,175,550 9.3%

2014 14,201,516 16.6%

2015 13,231,651 -6.8%

2016 17,241,823 30.3%

Table 1. Visitors statistics from 2010-2016 in South Korea from the Korea Tourism Organization7

The Korean Government has also played a huge role in the contribution of boosting

tourism in South Korea. The have continuously supported TV shows through the Popular

Culture Industry Division of the Ministry of Culture, Sports and Tourism. They have a large

budget that aims to export 10 billion USD worth of cultural products. As Korean dramas

continue to boost tourism and expose the Korean culture to internationals, the government

supports tourism by having a cultural project, “Visit Korea Years 2016 to 2018” to boost

tourism even further. 8

In Descendants of the Sun, the fictional military and medical base in Uruk was filmed

at an old coal mine location in Taebaek, Gangwon province. The filming location was

removed after the drama finished filming. Many fans and viewers were disappointed as the

realized the filming set was gone when they tried to visit. The city of Taebaek rebuilt the

filming set into a tourist location due to the high demands from the drama fans and viewers.

This decision was also supported by the previous President Park Geunhye which she

mentioned that “this drama is an opportunity for the nation to promote its culture to the world

and spark interest in Korea”.9 The Descendants of the Sun themed park has successfully been

rebuilt in June 2017 and is expected to bring in a high number of tourists to Taebaek.

7 “Statistics Arrivals & Departures by year,” Korea Tourism Organization, Accessed December 1, 2017,https://kto.visitkorea.or.kr/eng/tourismStatics/keyFacts/KoreaMonthlyStatistics/eng/inout/inout.kto.8 “Korean Wave (Hallyu) – The Rise of Korea’s Cultural Economy & Pop Culture,” Martin Roll, Last modified April 2017, Accessed December 1, 2017, https://martinroll.com/resources/articles/asia/korean-wave-hallyu-the-rise-of-koreas-cultural-economy-pop-culture/. 9 Chung Ah-young, “Descendants of the Sun makes Taebaek a tourism magnet,” The Korea Times, Last modified March 24, 2016, Accessed December 1, 2017, http://www.koreatimes.co.kr/www/nation/2017/08/113_201065.html.

International impact of dramas

As the Korean Wave continues to grow around the world, we can see a huge impact

on an international level. Korean TV dramas were originally produced mainly to target

domestic viewers; however, currently 90% of the TV programs being exported are all TV

dramas (Kim 2013, 6). It was unplanned that Korean TV dramas such as Winter Sonata

(KBS2, Yoon Seokho, 2002), Jewel in the Palace (Munhwa Broadcasting Corporation, Lee

Byunghoon, 2003), and My Love from the Star (SBS, Jang Taeyoo, 2013) would appeal to

international audiences. Digital media has also contributed greatly in the Korean Wave

through video sharing platforms such as YouTube, VLive, and Viki. Descendants of the Sun

was a pre-produced drama that allowed it to be translated and broadcasted in other countries

simultaneously with Korea. China broadcasted the show exclusively through a streaming

website iQiyi and the show has been viewed over 2 billion times just after 7 weeks of

releasing it.10 iQiyi paid a total of 5 billion won to have access to exclusive streaming for

China, which covered approximately 40% of the 13 billion won production cost.11 The

broadcasting license of Descendants of the Sun has also been sold to 32 countries such as the

United States, Italy, Russia, Saudi Arabia.12 We can see that the impact of one drama can be

large on the exports of South Korea. Production companies have utilized the rise of social

10 Jubilantj, “‘Descendants of the Sun’ surpasses China's population in views,” Allkpop, Last modified April 6, 2016, Accessed December 1, 2017, https://www.allkpop.com/article/2016/04/descendants-of-the-sun-surpasses-chinas-population-in-views. 11 Vittorio Hernandez, “iQiyi Shouldered 40% of ‘Descendants of the Sun’ Production Costs,” Yibada, Last modified April 6, 2016, Accessed December 1, 2017, http://en.yibada.com/articles/114252/20160406/iqiyi-shouldered-40-of-descendants-of-the-sun-production-costs.htm. 12 Son Gina, “'Descendants of the Sun' heads to 32 countries,” Korea.net, Last modified April 4, 2016, Accessed December 1, 2017, http://korea.net/NewsFocus/Culture/view?articleId=134818.

media platforms to use it as another form a revenue for production cost and media to reach

international viewers.

Conclusion

This study reviewed the economic impact brought by PPL through TV dramas in

South Korea. PPL can be shown through different forms in TV dramas which has been shown

as props and filming locations in Descendants of the Sun. PPL sponsorships can aid the

production cost immensely which would lead to producing a higher quality drama. Viewers

usually feel positive about product placements as long as it does not violate ethical reasons or

interrupt the realism of the drama. PPL has increased the amount of tourism and exports

greatly which has given South Korea a huge economic boost.

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