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Economic Impact of Format Licensing — Royalty Systems · IP Value · Cultural Economy Contribution
1) Introduction — From Entertainment to Export Industry
Korean variety shows are no longer just entertainment — they are export-grade intellectual properties (IPs). The global licensing of formats like The Masked Singer, Running Man, and I Can See Your Voice has created a new economic layer within the cultural industry. In 2024, Korea’s format export value surpassed $600 million USD, making it one of Asia’s top creative exports.
2) The Format Licensing Model — How It Works
Licensing a show format means selling the blueprint of creativity. Instead of exporting completed episodes, production companies export the show’s rules, narrative structure, brand guidelines, and consulting support. Each adaptation pays royalties and a share of local revenue to the IP holder.
- Format Rights Fee: One-time licensing payment per adaptation country.
- Royalty Model: 5–10% of local advertising or OTT revenue.
- Consulting Fee: Optional on-site production and editing support.
3) IP Valuation and Brand Equity Growth
Major players like CJ ENM, SBS, and JTBC now treat show formats as intellectual assets with measurable market value. IP valuation depends on three key factors: market adaptability, brand reputation, and viewer retention metrics. This approach aligns entertainment with financial modeling, bridging the gap between creativity and capital.
| Valuation Factor | Description | Economic Effect |
|---|---|---|
| Format Adaptability | Ease of localization across cultures | Increased export demand and IP longevity |
| Brand Equity | Recognition through global franchises | Enhanced sponsorship and ad partnerships |
| Viewer Retention | Consistency of audience engagement | Stable revenue streams for renewals |
4) Royalty Systems and Distribution Rights
Licensing deals follow a two-tier system: initial format purchase (flat rate) and post-broadcast royalties. Regional rights management has become crucial in protecting creators’ profits, with WIPO-backed IP treaties now covering 85% of broadcast territories. This system ensures fair returns for Korean studios while maintaining global brand consistency.
5) Long-Term Revenue Models
Beyond licensing, K-variety IPs are monetized through merchandise sales, mobile games, and live event adaptations. CJ ENM’s “Masked Singer Live Tour” and SBS’s “Running Man Fan Meeting Series” generate continuous brand exposure. These ecosystem-based revenue models show how entertainment can evolve into sustainable global business.
- Merchandising: Branded costumes, figurines, NFTs.
- Events: Global tours, local talent competitions.
- Digital Licensing: Streaming rights and music IP bundling.
6) Cultural Economy Contribution
Format licensing has amplified Korea’s position as a soft power economy. Every exported show not only generates income but also exports language, values, and lifestyle aesthetics. The result: a self-sustaining feedback loop where culture fuels the economy — and vice versa.
7) Legacy — The Economics of Emotion
The K-variety licensing model demonstrates how creativity
can be industrialized without losing soul.
It’s not about mass production, but about emotional scalability.
From Seoul to Stockholm, laughter has become Korea’s most valuable export.
→ Continue reading: Global Remakes & Local Adaptations Series
