'Cool Japan' from K-pop boom ends in cumulative deficit of 490 billion yen—Japan set for consolidation

"Cool Japan" loses 54 billion yen... the bleak reality behind benchmarking Korea’s Hallyu

60.0% humiliation at the investment-recovery rate, rebuilding meeting set for end of this month

An agency launched with big ambitions by Japan, designed to benchmark South Korea’s "Hallyu" and called "Cool Japan(Cool Japan)," now finds itself at a crossroads over whether to continue or wind down. With cumulative losses already totaling 54 billion yen (about 490 billion won), it has reached a crisis point that could ultimately force it into a consolidation and merger process.

According to local media on the 21st, as of the end of March 2024, the organization’s investment-recovery rate hovered at around 60.0%. The dominant assessment is that from the early days of the launch, it failed to build a clear profit model, and that it also lost even its original purpose of attracting private capital—leading to a major loss of taxpayer money.

Department-store style investment after a failed strategy of focus and selection—an end that was always coming

The Japanese daily "Nikkei" (Nikkei) identified a lack of expertise in the content industry as the core cause of the current turmoil. The analysis says the fatal misstep was the widespread misuse of so-called "department-store" policies across a broad range of areas, including food, clothing and shelter, advanced technology, and leisure. Even though Japan had put promoting the content industry at the top of its agenda, of the total investment of 204 billion yen, the share spent in the media and content field fell short of 30%.

Recognizing the seriousness of the situation, Japan’s "Ministry of Economy, Trade and Industry" convenes a rebuilding measures meeting at the end of this month to leave open the possibility of consolidating the Cool Japan organization. The ministry has labeled the absence of a control tower to run the policy as a painful failure factor, and plans to overhaul the system for reorganizing intellectual property (IP) and content support measures across the board.

Meanwhile, in tandem with economic rebuilding discussions led by major figures such as Sanae Takaichi, the Japanese government has confirmed a "Honebuto policy" (the basic policy on economic and fiscal management) that will carry out at least 370 trillion yen in public-private investment through 2040 across 17 growth-strategy projects. If the policy takes hold on track, it maps out a blueprint for achieving nominal gross domestic product (GDP) of 1,100 trillion yen.