K-pop Fandom’s Climate Change Rebellion – The Diplomat

The Koreas | Society | East Asia

In line with emerging trends in the global creative market, South Korean entertainment firms are making major investments in creating nonfungible tokens (NFTs) that certify ownership of digital files containing their products. The profit potential is obvious – fans are eager to own irreproducible content from their favorite artists, and individual NFTs have sold for up to $70,000. However, entertainment companies are facing push-back from fans over the environmental impact of creating these new digital products. And this carries broader implications for Korea’s future economic direction.  

While K-pop fans remain avid consumers, their engagement with artists and studios has changed. In the last decade, corporate marketers empowered loyal customers by relinquishing some control of content creation and enabling fan communities to promote their favorite artists in their own unique way on platforms of their choosing. As a result of this multi-level marketing campaign, many fans now see themselves as integral actors in the success of their bands. 

For this new generation of fans, the conflation of fandom and social activism is common. They spend money on causes that would make their idols look good, such as planting forests or donating to disaster relief. For millennials and Gen Z-ers born between 1980 and 2010, climate change is a particular concern. K-pop 4 Planet is an organization of fans that promote environmentalism on behalf of K-pop artists. Groups like this have called on entertainment studios to reduce the waste produced by promotional packaging and concerts. These engagements also align with the values of an increasingly international fan base — as climate change is a challenge that both Korean and global denizens share.

In this context, many fans are naturally concerned with the Korean entertainment industry’s new focus on NFTs. The carbon footprint of a single NFT transaction is estimated to be around 48kg CO2. NFT transactions are reliant on a process called “mining,” in which a network of computers use cryptography to determine the validity of transactions. Such transactions require a huge amount of energy – “mining” for the popular cryptocurrency Bitcoin consumes energy equivalent to over a day’s consumption by an average U.S. household. Utilizing this sort of technology to certify the many products released by South Korea’s highly productive entertainment studios would demand considerable amounts of energy. 

For the entertainment industry, producing NFTs is a way to better control their own content in an era where standard digital products are highly reproducible. With the metaverse promising more economic activities in the digital space, NFTs offer unlimited potential for growth both domestically and overseas without requiring production of more tangible goods like albums or physical merchandise. In addition, the companies see production of NFTs as a way to engage with the digital youth culture and produce unique content for tech savvy fans. 

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But the profit motives of the entertainment studios are in direct conflict with an increasingly socially-conscious fan base. Earlier this year, HYBE — the entertainment label that manages boyband BTS — announced a joint venture with company Dunamu and promoted the concept of limited-edition digital photo cards. Fans often buy dozens, or even hundreds, of physical pictures of their favorite members. However, the announcement was met with unexpected resistance. International fans of the group expressed their disapproval on social media and threatened a boycott. BTS has cultivated an image of being sensitive to issues of social justice and even spoke in front of the U.N. earlier this year regarding climate change. To fans, the company was being hypocritical in using the group to promote Korea’s stance on climate change while also investing in tech that is harmful to the environment.

As the influence of K-pop groups grows internationally, so do expectations of the industry’s responsibilities. This has led to calls for greater attention to environmental, social, and governance (ESG) impact of the industry’s activities. However, audits by Shinhan Financial Group show that entertainment agencies have been slow to get on board. Unlike other traditional industries such as manufacturing where carbon emissions are an obvious concern, the entertainment industry is a latecomer to making these considerations, and efforts to adapt ESG are still in their infancy.

This hesitance may be reflective of the contradictory environmental and industrial policies of Korea as a whole. Sustained economic expansion and environmental protection are largely still considered a zero-sum game. The nation is the ninth largest consumer of energy in the world, and the eighth largest emitter of carbon. Criticisms from other nations contributed in part to Korea declaring a goal of reaching carbon neutrality by 2050. 

In this environment, continued promotion of NFT and blockchain technology may place entertainment firms at odds with the government’s promotion of South Korea as a “green” nation and promises made to contribute to global climate change mitigation efforts. Similarly, the popularity of Korean content on the world stage means that firms producing them must also consider the global impact of their decisions.