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Die-hard fans drive K-pop’s multi-million dollar industry

Teresa Goh I CNBC Asia
Tuesday, 26 Nov 2013 | 12:07 AM ET
K-pop, Korea's newest export, goes global
Thursday, 21 Nov 2013 | 8:53 PM ET
Richard Lee, Head of International Strategy at CJ E&M, the firm hosting Friday's Mnet Asian Music Awards, describes how Korea's entertainment business is being developed globally.

The appeal of South Korea's popular music also known as K-pop, which has gone viral and rung up millions of dollars in revenue for the Korean entertainment industry, is unlikely to lose appeal any time soon as its fan base continues to build globally, experts say.

In the first half of this year alone, sales raked in by the country's top three entertainment agencies – SM Entertainment, YG Entertainment and JYP Entertainment – soared to a record high of 173 billion Korean won ($156 million).

In an industry where fame comes quickly and could fade just as rapidly, industry watchers say K-pop's distinctive fan base could keep its massive popularity going for a while.

(Read more: Korean rapper Psy's 'Gentleman' rocks YouTube)

"One thing that is unique about K-pop, I think, is the very loyal fan base. They consume everything from physical media and CDs that perhaps no one else in this generation does. And spending is certainly there, we've seen evidence of that," Richard Lee, head of international strategy at South Korean entertainment agency CJ E&M, told CNBC Asia's "The Call."

According to a survey conducted by the Korean Culture and Information service in 2011, there are over 3 million K-pop fans worldwide, a number that has arguably grown since Psy's hit song 'Gangnam Style' took the world by storm last year.

ChinaFotoPress | Getty Images

The single went quadruple platinum in the United States, selling over 4 million copies. The music video is the most watched YouTube video of all time, with over 1.8 billion hits currently, well ahead of second-ranked 'Baby', a music video for American pop star Justin Bieber, which has over 931 million hits.

(Read more: Move over Bieber — Korean pop music goes global)

K-pop idol group Girls Generation further underscored the craze; the music video for their single 'I Got a Boy' was awarded "Video of the Year" at the 2013 YouTube Music Awards. The group's video for the 2009 single 'Gee' became the second video by a Korean singer or group to break the 100 million YouTube hits mark in early 2013.

Singapore-based concert promoter Running Into the Sun, which has brought in artists like Girls Generation and Super Junior, said K-pop fans are typically fervently loyal and are more than willing to splurge on their idols.

"Concert merchandise is a big part of the concert experience, and fans usually come earlier to purchase them before the concert. Most K-pop fans are also in their teens and tend to be more demonstrative than older fans in their support for their idol," said a spokesperson of the firm.

(Read more: Investing In...South Korea)

Hayley Hoi, a 21-year-old university student in Singapore, who snaps up music and merchandise of her favorite Korean artists, is testament to the loyalty of K-pop fans and their spending power.

Is there more to K-pop than 'Gangnam Style'?
While K-pop has been growing in popularity around the world, Gangnam Style, put it on the map to an even bigger audience. CNBC's Chloe Cho finds out what else is big on stage.

"CD albums cost about 20 - 30 Singapore dollars ($16-$24) per album and it varies depending on whether it's a special edition or if it comes with extra things like photo books, posters, etc.," she said.

Fans are also dishing out the big bucks to watch their K-Pop idols live at world tours.

(Read more: Gangnam brings fans — and tourism revenue — to Korea)

In Singapore for instance, fans paid as much as 288 Singapore dollars to get seats to Big Bang's 'Alive' concert in September 2012.

"When Big Bang came to Singapore, it was crazy. Everyone was talking about it. When tickets were released, [they] were gone in a jiffy!" Amanda Tay, an avid fan of Big Bang, told CNBC.

Tay, attempted to follow Big Bang on their 'Alive' tour in 2012, but quickly realized how expensive this hobby was. "It costs at least 1,000 Singapore dollars per trip, because of the flight tickets to travel overseas, hotel accommodation and concert tickets."

(Read more: Life-changing college exam puts South Korea on hold)

According to CJ E&M's Lee, K-Pop's is unlikely to fade away anytime soon.

"I think you'll see often, perhaps not the entire group going forward for 20 years but certain artists breaking off and doing solo careers and it's a lot of talent in the industry so I expect that they will age quite well," he said.

By CNBC's Teresa Goh.

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