(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: (Singing) Oppa Gangnam style.

STEVE INSKEEP, HOST:

You know, this little song has become a big deal. "Gangnam Style" is a Korean pop song that went worldwide. The YouTube video is hysterical or at least the people who viewed it 436 million times seem to think so. The song got our Planet Money team wondering if sending a song to the top of the charts in country after country is a good indicator of the strength of the home country's economy. Here's NPR's Zoe Chace.

ZOE CHACE, BYLINE: Korea exports a lot of products - cars, computers, phones. You use Korean products every day. A Korean pop song is just another product. But a very high tech, very sophisticated product. And it's done something remarkable in the music industry over here. You can go to a Top 40 radio station in New York City and hear them go from this...

(SOUNDBITE OF SONG, "WE FOUND LOVE")

RIHANNA: (Singing) We found love in a hopeless place. We found love in a hopeless place.

CHACE: Rihanna, one of the most recognized pop names in the world, to a guy named Psy, spelled P-S-Y.

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: (Singing) Oppa Gangnam style, Gangnam style.

CHACE: The DJ here at 92.3, Micki, she's trying to sing along.

MICKI: (Singing) Zana(ph) hair, zana hair.

CHACE: Do you even know what that means?

MICKI: No.

(LAUGHTER)

CHACE: But the requests to hear this song are pouring into this station. Now, this could just be a novelty, based on people laughing at this video that is so over the top and crazy - it's this guy, doing this horse dance on the subway, you've got to see it - that people can't help but watch it. But in this case, it's very hard to dismiss this song as a fluke.

Korea has been building up to this moment for 20 years, creating record labels, recruiting young people, turning them into superstars, sending them on tour. Already teenagers all over Asia listen to tons of Korean pop. Like Girls Generation.

(SOUNDBITE OF SONG)

GIRLS GENERATION: (Singing) Yeah.

CHACE: And now Korean pop is coming for America.

(SOUNDBITE OF SONG)

GENERATION: (Singing) B-bring the boys out. We bring the boys out.

CHACE: Korea wants to become as famous for their music and movies as they are for their electronics and their cars. And Korea has done three things that give it a real shot at making it in America. One: Korea decided to produce pop music like it produces cars - industrialize and focus on exports. For a country like Korea, it's absolutely necessary.

MARK RUSSELL: Korea is not really big enough to be self-sustaining for the music industry. It needs exports.

CHACE: Mark Russell writes about Korean pop culture. He says, for ten years - 1992 to 2002 - Korea was industrializing their pop music process. Kind of the way we did with Motown, early on. These giant conglomerate hit factories take the raw material - in this case, Korean teenagers from around the world - bring them to a central factory - these big buildings in Seoul - train them, shape them, mold them, and package them. And sell them to their trading partners.

Number two: Korean labels transformed the way music was released.

DANNY IM: Usually here in the States, it's always the radio. In Korea, it was TV.

CHACE: Here, traditionally, the record industry starts with the song on the radio. Danny Im, was one of the first hip-hop stars in Korea. Ten years ago, he remembers, he would debut a song on national television.

IM: In Korea, basically almost everything's national television, 'cause it's such a small country. So everyone sees everything.

CHACE: And that means, the moment Koreans started listening to Korean pop music, they were listening through their screens. They were watching something. Which set them up perfectly for their biggest advantage: The third reason the record industry in Korea is so big - it's the Internet.

RUSSELL: Internet cafe culture just went everywhere. Every apartment in Korea had broadband Internet. Everything changed incredibly fast and the music companies had to change with it.

CHACE: Overnight, it seemed, Korea became one of the most wired countries in the world. So what did the music labels do about it? They worked hard at YouTube.

(SOUNDBITE OF SONG, "GEE")

GENERATION: (Singing) Listen, boy.

CHACE: And they kind of perfected the YouTube model.

(SOUNDBITE OF SONG, "GEE")

GENERATION: (Singing) Ah, ah. Let's go.

CHACE: This is the hugely popular video for "Gee" by Girls Generation. A perfectly produced little video that's easy to watch on your phone is something the Korean record labels were on way early. Because that's where Korean consumers were, because of their incredibly fast Internet connection. And that had this huge unexpected consequence. David Marx watches YouTube trends for Google Asia Pacific.

DAVID MARX: I think they originally put them up to connect with, you know, local Korean fans, but they soon found through kind of the analytics that we provide that, you know, people around the world were watching it. In a lot of cases, the majority of the views were coming from overseas.

CHACE: Because of Youtube, the labels saw there was a market for Korean music in Europe, in Japan - where album sales are still huge - in the U.S., where Girls Generation sold out Madison Square Garden. And that's how Korea got into position to make, as the program director at that top 40 station puts it...

RICK GILLETTE: Probably one of the greatest music videos ever made. I mean, it's not "Thriller" but it might be the K-pop version of "Thriller."

CHACE: Rick Gillette started playing this song on his station because it's one of the most popular YouTube videos ever - 430 million views. It's what happens when a developing country becomes developed - an infrastructure to make and export culture develops too. And that's what you're hearing when...

(SOUNDBITE OF SONG, "GANGNAM STYLE")

PSY: (singing) Oppum gingham style.

CHACE: ...comes on American radio, Korea's latest and greatest industry. Zoe Chace, NPR News.

(SOUNDBITE OF MUSIC)

INSKEEP: This is NPR style. Transcript provided by NPR, Copyright NPR.