K-pop, the Korean popular-music genre that is taking the world by storm, looks set to become a potential investment vehicle in its own right as demand among music fans explodes in Europe this weekend (14-15 May 2022).

KPOP.FLEX, described as “Europe’s first mega K-pop festival”, is taking place over the two days at Deutsche Bank Park Stadium in Frankfurt, Germany.

More than 65,000 tickets have been sold, according to the event’s organisers, led by K-Pop Europa (a joint venture of Live Company Group plc, which is listed on the London Stock Exchange’s AIM, and Cologne-based Explorado Group, a leading out-of-home entertainment specialist). Also on board the KPOP.FLEX venture are German live-entertainment promoter PK Events and SBS, the South Korean terrestrial-TV giant.

And here is why they have joined forces for this weekend’s mega fest. “Europe’s K-pop fanbase is growing,” declares Nicola Gross, Group Director at UK-based Live Company Group. “France saw a 13% increase in streams in 2020 and the United Kingdom ranked 11th globally.”

Nicola Gross, of Live Company Group, co-organiser of KPOP.FLEX

Additionally, on 28-29 May, K-pop fans in South Korea will be treated to SBS’s exclusive 90-minute TV special of the two-day spectacular (as the festival’s concerts will be supported by other fun Korean cultural activities at the stadium).

And K-pop aficionados in most of the rest of the world (Europe, Asia, the Americas, and Oceania) will have direct access to a ticketed interactive version of the 90-minute special with behind-the-scenes footage that is streamed into their homes.

K-pop music has value
The headline artists include some of K-pop’s greatest hitmakers, such as KAI, Dreamcatcher, AB6IX, Monsta X and IVE, with a combined social-media reach that exceeds 65 million followers. With them at KPOP-FLEX, Live Company Group will be fulfilling a K-pop-in-Europe ambition that has been in the works during the challenging long pandemic lockdown when live entertainment everywhere came to a standstill.

All-girl K-pop group Dreamcatcher

K-pop hitmakers AB6IX

“This is a project that we have worked on for over 18 months,” Gross says. “We are delighted to be able to offer K-pop fans a chance to go to a live concert again after the lack of live events due to Covid-19.”

And to illustrate how committed it is to K-pop in its overall media-and-entertainment investment ambitions, the company adds that KPOP.FLEX is “the first step in a five-year programme catering to K-pop’s explosion in popularity across Europe. This is only the beginning for K-Pop Europa, and we’re eager to bring even more of the genre’s biggest names to perform for European fans in future”.

K-pop superstar KAI

All-girl K-pop band IVE

K-pop’s global wave
As part of South Korea’s hallyu (Korean wave) movement to export its popular-culture assets, K-pop has become a real global phenomenon. After conquering the neighbouring Asian markets, including China and Japan, and Oceania, K-pop has permeated the music industry in the Americas, including the much-coveted US, the world’s biggest music market.

K-pop is now a household word in those regions thanks to the record-breaking success of Gangnam Style, the international K-pop hit that introduced the world to Korean rapper Psy in 2012.

Since then, a host of photogenic and telegenic boy bands like BTS, Super Junior and Ateez and all-girl bands such as Blackpink and Twice – with their perfectly choreographed dance movements – have been dominating the international recorded-music sales charts. Their appeal to the Gen Z brigade in popular-music fandom seems to have no end.

That trend has been spurred by collaborations with high-profile English-speaking international artists in the West, like Dua Lipa, Nicki Minaj, Jason Derulo, Snoop Dogg, and Halsey. K-pop also resonates in Latin America thanks to recordings featuring Spanish-speaking Latin American and US Hispanic stars that include Mozart La Para, Becky G, Ricky Martin, Sebastian Yatra and Guaynaa.

On a global scale, the results of K-pop’s reach are indisputable. According to the global recorded-music trade body IFPI, in 2021, the septet BTS officially topped its Global Recording Artist of the Year chart for the second year in a row and have been in the Top 10 since 2018. In addition, BTS ranked No.4 in IFPI’s Global Album Sales Chart, while girl band Seventeen reached both No.3 and No.7.

Europe’s multi-territory hurdles
These accolades then beg the question, why is it only now that Europe is boasting of its first-ever mega K-pop festival after the genre has conquered most of the world’s other geographical region?

The fact is that in a multi-territory and multi-cultural region where the United Nations recognises more than 40 different countries and 24 official languages, arranging a regional tour for one act, let alone several, can be complicated.

The freedom of movement in the 27-state European Union helps, but there are specialist concert promoters in the different countries. Negotiating with each one can be a headache. The logistics for organising a tour and figuring out where the real demand for K-pop is regionwide can be labour-intensive.

But Kpop Europa appears to have done the homework needed to bring K-pop to Europe and KPOP.FLEX indicates it is paying off.

“The fans are young with more than 50% being aged between 18 and 24,” says Live Company Group’s Nicola Gross in describing the state of the market. “The majority are female. Ticket purchases for Frankfurt have reflected this. The MTV Europe Awards has even created a category solely for K-pop.”

Another quality that appeals to the different European countries is the reliability of K-pop as youth entertainment.

As Gross explains about KPOP.FLEX: “K-pop artists, just like their fans, are young. The genre of music differs from rock, for example, not only because of the age but also the clean image. K-pop is not about nudity or vulgarity. We need to make sure that our young fans feel safe whilst watching their favourite acts on stage. The Korea fest promotes cultural experiences as well as food and dance, which are all very appropriate for the younger audience. Nobody under 18 can attend without an adult.”

Investing in K-pop
K-pop is big business as demonstrated by the large number of publicly listed Korean corporations that have cornered the market at home and abroad, largely with the help of local government support.

But the key Korea Exchange-listed companies to look out for include YG Entertainment, SM Entertainment and JYP Entertainment. Their rival Starship Entertainment is majority owned by the entertainment division of Korean Internet company Kakao, also on the Korea Exchange.

Hybe Corporation, the group behind the band BTS (who also happen to be shareholders), became a publicly quoted company on the Korea Exchange in 2020 when its name was Big Hit Entertainment. It has since made a permanent mark in the big US market, where it paid an estimated US$1bn in 2021 for Ithaca Holdings, the talent management company of US megastars Justin Bieber and Ariana Grande, as well as J Balvin, the Latin American “prince of reggaeton”.

Other K-pop investors seeking a piece of the European market include CJ ENM, another Korean media-and-entertainment conglomerate, which operates the international KCON festivals.

TEG MJR, a UK event organiser, is planning the UK’s first-ever local K-pop festival at the OVO Arena Wembley in July. It is called the HallyuPopFest.

Bringing K-pop to Europe has become so competitive, there is already controversy surrounding MIK festival, which has been touted as “Europe’s first outdoor Korean music festival”.

It is scheduled for 30-31 July at a local park in the London borough of Southwark and been announced by promoter Proud Events. But according to media reports, there is strong opposition from local residents. We clicked on the relevant website and were greeted with the sentence: “We could not find the page you were looking for.”

Whatever hiccoughs encountered along the way by European K-pop concert organisers, the genre continues to make a strong impact.

According to a report by the entertainment division of Hyundai Motor Securities, an estimated 2.85 million fans are forecast to attend K-pop concerts outside South Korea this year.

Although that amounts to less than 50% of the numbers that attended during pre-pandemic times, it is a significant improvement compared to the quarantined days when live entertainment became almost non-existent. BTS has already performed in front of hundreds of thousands in the US during April.

These days, there is a plethora of information on K-pop in Europe via online services like UnitedKPop and Kpopeurope.

For investors, however, it might be worthwhile paying attention to a recent Bloomberg article about ETFs (exchange traded funds).

Specifically, it will be a stock exchange-like index based on stocks, shares and funds linked to K-pop and other hallyu Korean entertainment, such as K-drama and movies. It is being set up and tracked in the US by ETF specialists Exchange Traded Concepts.

Should regulators give this planned K-pop ETF the go-ahead, then investors in it should benefit from the positive growth forecast by experts of all things Korean in media and entertainment.

Until then, there are the new and future KPOP.FLEX parties that a host of European fans will be thronging to.