Finding an AI Survival Strategy
Can AI Become the Secret Weapon for 'K-Content'?

[비즈한국] AI is now a matter of survival, not an option. Amidst the dominance of U.S. Big Tech, China is shaking up the landscape with vast support and human resources. South Korea, an "IT powerhouse" that once topped digital infrastructure rankings, has long been relegated to the "second tier" in the AI technology sector. As leading nations engage in a fierce competition backed by massive capital and data, domestic AI startups are targeting niche markets to secure global competitiveness. Major IT companies are busy seeking unique AI-driven business models. Where does the path to survival lie for South Korea in the global AI war? We explore the potential of our companies standing at the forefront of innovation.

Generative artificial intelligence (AI) is sparking new changes across the popular culture industry, including film, virtual humans, and digital content. The new guidelines recently released by the U.S. Academy Awards are a prime example. The organizers announced in April that works utilizing generative AI are eligible to win an Oscar. This means that the use of AI and digital tools will not be a point of contention in nominations or winner selection. Considering the influence the Oscars have on the film industry and popular culture, this is expected to serve as a catalyst for expanding the boundaries of the industry.

If South Korea, which has made a name for itself in the global content market, grabs AI technology as a tool, what kind of results can it produce? Korea has historically driven its content industry with relatively limited budgets and human resources. The industry expects AI to serve as a "technological lever" that reduces time, labor, and costs while enhancing content quality. Even if it is not a model of generating profit from proprietary IP (intellectual property), there is a outlook that it holds vision as a B2B model providing specialized technology in a situation where AI is already altering the entire production process.

The First 'Virtual Human' Girl Group on the International AI Stage

Using prompts (commands) to create idols and movies that people pour their affection into—this is no longer science fiction, but reality. The 11-member AI virtual girl group "Eternity" served as promotional ambassadors for the 42nd Busan International Short Film Festival held late last month. The theme for this year's festival, officially recognized by the Academy Awards, was "Cinema & Sound." Following their appearance at the opening ceremony on screen, Eternity showcased a 3D-remastered version of their previously released music video "WEN MOON."

Eternity members are fundamentally virtual humans. Technology trained on the history of K-pop idol evolution was applied to them. The generated faces incorporate video synthesis technology at a level comparable to live TV broadcast quality. According to the company, various training data were collected publicly. Beyond technical prowess, market demand was also considered. The company selected the final visuals through online voting from a pool of multiple image candidates.

Pulse9, the developer and agency for Eternity, is a startup specializing in AI graphics. Eternity is less of a project originally planned as an idol group and more of a team born through an intelligent content production process. Activities such as performances and communication by the virtual idol group Eternity are all facilitated by the company. It is based on a proprietary generative AI solution. When producing music videos or appearances, they bypass outdoor location shoots and use a virtual video production system, minimizing the physical limitations and costs of filming. Parts that require delicate acting are shot by human body doubles in a studio, followed by the application of real-time face-swapping technology to achieve a natural look.

Eternity has released five singles so far. After engaging in unit activities, they returned as a "full group" with their most recent album following their first concert. Their primary stage is abroad. Since their debut in 2021, they have garnered interest from foreign media, being named one of the BBC's "100 Women of 2022." Last year, they performed at the closing ceremony of the "AI for Good Global Summit" organized by the UN's International Telecommunication Union (ITU) in Geneva, Switzerland.

As Eternity is the world's first virtual idol group, CEO Park has attended content events and National Assembly forums to introduce the group and the company's technology, and to voice opinions on AI copyright issues. CEO Park explained, "Overseas, there is a complex interest in the combination of Korea's 'K-pop,' the 'virtual idol' known as Eternity created by AI, and the efficient 'technical capability' that allows them to perform as real artists."

Looking at recent activities, however, the group’s character as a "virtual model" seems more prominent than that of an "idol," as official videos and communication have been sparse. This stands in contrast to VLAST, which started as an MBC in-house venture and achieved exceptional results with the five-member boy group "PLAVE," despite the difference in funding scale. Pulse9 attracted investment from entities including Neptune 293490 (an affiliate of Kakao Games 293490) in 2021, but there has been no official confirmation of additional investment since 2022.

Aiming Globally: From Winning the First AI Film Festival to 'Standing Out' in Commercial Advertising

The official main poster for the Bucheon International Fantastic Film Festival, set to open this July, was created through a collaboration between Studio Freewilltrion—the first in Korea to adopt AI filmmaking—and actor Park Shin-yang. Studio Freewilltrion is an AI video production company that has created the largest number of AI films and AI advertisements in Korea. The company gained attention when its CEO, director Kwon Han-seul, won the Grand Prize and Audience Award at the inaugural International AI Film Festival (AIFF) held in Dubai with the short film "One More Pumpkin." It is evaluated as proof that the domestic industry can create a new market amid the full-scale adoption of AI technology in the video industry.

Founded in 2023, the company finds its competitive edge in solving the inefficiencies of video production. Its goal is to provide high-quality AI video production services by replacing costly filming and computer graphics (CG) work with AI video technology. In the video production process, AI produces optimal results by considering various factors such as camera angles, lighting settings, and depth of field. The creator, who controls the entire process, inputs these factors as prompts during the generative AI request phase to enable the AI to produce more perfect videos.

Studio Freewilltrion planned to target the global market from the early stages of its business and is focusing on the high-end video market, expanding into films, dramas, and advertisements. As of the end of last year, the company's revenue reached 500 million KRW, placing it on the verge of profitability. Recently, it has been expanding its influence by launching "AI-Play," an open platform that supports exchange and video sharing among AI creators, and hosting AI video advertising competitions.

Securing 'Production Efficiency' AI Technology in Global Content Competition

As AI technology is widely integrated into the cultural industry, discussions regarding the limitations of AI and the essence of creative works are also expanding. This is a question posed to the domestic industry as well. The background for the new Oscar guidelines lies in the controversy over the use of generative AI related to this year's winners. Criticism arose after it was revealed that the Hungarian accent of Best Actor winner Adrien Brody (for the film 'The Brutalist') and the vocal range of the protagonist in the two-time winning musical 'Emilia Pérez' were adjusted using generative AI. Discussions on the boundaries of AI usage and creative ethics have begun in Korea as well.

Despite concerns, the spread of generative AI technology in the content sector is an undeniable trend. A business model that supplies technology and production solutions rather than relying on owning IP is also considered to have potential. The efficiency of fast production speeds, low unit costs, and the ability to transcend linguistic and cultural barriers can work effectively for the domestic content industry.

Wi Jong-hyun, a professor of business administration at Chung-Ang University (Chairman of the Content Future Convergence Forum), noted, "Korea, whose AI engines are weaker compared to leading Big Tech companies like OpenAI, must compete in the application sector. It can contribute to enhancing the competitiveness of the domestic content market, which is being shaken by the massive capital power of overseas players like Netflix." He added, "At the early stage of market transformation, it is necessary to quickly streamline human and cost structures in the content and video sectors."