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South Korea’s intellectual property rights (IPR) trade balance hit a highest-ever surplus last year amid a boom in music, films, television and other Korean-made content.

In particular, the annual trade surplus for culture and art copyrights topped US$1 billion for the first time.

A statistical report on the IPR trade balance published by the Bank of Korea on Wednesday showed South Korea provisionally recording a surplus of US$180 million in its IPR trade balance for 2023. This is the largest surplus ever in annual terms.

Despite ongoing deficits in industrial property rights areas such as patents and trademarks, positive numbers in culture and art copyright areas such as music, film and television led to an overall IPR surplus.

Culture and arts copyrights and IPR generated US$1.1 billion in profit in 2023. That’s the first time Korean content has generated an annual profit of more than US$1 billion. In 2021, Korea’s copyright exports amounted to US$2.36 billion. This jumped to US$2.96 billion in the following year, and to US$3.35 billion in 2023. 

South Korea’s IPR trade balance started off in the red in 2012, when the government first began collecting relevant data, and remained there until 2020, when IPR first appeared in the black with a profit of US$170 million. This profit increased to US$410 million in 2021, and to US$880 million the following year. The industry has now generated four consecutive years of surplus from exporting copyrights.

The IPR trade balance is determined as follows. If a firm is financially compensated for IPR, it counts as an export. If the firm offers financial compensation for IPR, it counts as an import. Copyrights in the field of cultural and artistic content comprise the exclusive right to copy and/or distribute films, animated films, music and musicals. For instance, if a Korean production sells the copyrights to a series or film to a US-based streaming platform, that counts as an export.

The increasing exports of cultural and artistic content can be attributed to the global popularity of “K-culture” and Korean content on streaming platforms like Netflix.

“Overseas demand for Korean music, dramas, webtoons and the like remain high, and Korean artists have increased the frequency of overseas concerts and performances since the relaxation of COVID lockdowns,” said Moon Hye-jeong, who leads the Bank of Korea's balance of payments division.

“Although the Korean gaming industry’s software copyrights are in a slump, Korean firms have increased their exports of software programs to their overseas affiliates, which has contributed to the overall trade surplus,” Moon added.

Copyrights for research and development and software reached a surplus of US$1.11 billion last year. The trade surplus of database copyrights also increased (US$3.1 billion), while those for computer programs (US$2.12 billion) diminished slightly.

Trade in industrial property rights, however, continues to exhibit a deficit. Patents and utility models (minus US$700 million) and trademarks and franchises (minus US$1.11 billion), and design rights (minus US$90 million) combined to form a total deficit of US$1.86 billion. However, this figure exhibited a decrease in the size of the deficit compared to the previous year (minus US$2.62 billion).

“Thanks to an increase in the number of overseas factories, and an increase in demand for Korean products, the domestic car industry and secondary battery industry managed to increase their export of patents and utility model rights to their overseas affiliates, compared to the previous year,” Moon said. 

By Kim Hoe-seung, senior staff writer

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