Why are K-pop powerhouses advancing into Latin America?

JYP Entertainment announced last Thursday that it will establish a Latin America subsidiary in the third quarter of this year. The move is aimed at expanding its local business and better communicating with fans from the region.

Ahead of JYP, the agency behind popular K-pop bands Twice, Stray Kids and Itzy, was Hybe, the powerhouse behind BTS, Seventeen and NewJeans. Hybe established a foothold in the Latin market with the opening of a Mexico-based business unit in November last year. The company stated that its Latin America unit will serve as a bridgehead for its artists to enter the Latin music market and a hub for cultivating new artists and content.

The moves by the two K-pop giants have raised questions about why Korean entertainment leaders are directly entering the Latin American region, rather than forming partnerships with local music distributors or publishers.

K-pop agencies cite the influence of Latin music in the US and the rapid market growth in the Latin American region as primary reasons.

“The significant influence of Latin music and culture in the US market, along with the growing popularity of K-pop in the Latin market, have highlighted the potential for powerful synergy between these two trends," a local entertainment official said, commenting on JYP Entertainment's move.

Hybe said it aims to expand its influence in Latin America, one of the fastest-growing music markets in the world.

“This is a significant move for Hybe, which is broadening its global impact across various music genres beyond K-pop, including hip-hop, country and Latin pop,” Hybe said on Wednesday.

According to the 2024 International Federation of the Phonographic Industry’s Global Music Report released in March, Mexico and Brazil were the second and third fastest growing music markets in the world in 2023. Mexico marked an 18.2 percent increase in music revenues in 2023, while Brazil saw a 13.4 percent growth in recorded music revenues. Only China was ahead of the two with an 18.3 percent increase in music revenue.

Another notable index illustrating why Latin America is such an attractive destination for K-pop powerhouses is its high streaming penetration rate.

Streaming services are the largest revenue generator, accounting for nearly 60 percent of global music revenues. Subscription streaming alone grew by 11.2 percent in 2023 and now constitutes almost half of the total market, according to the IFPI report.

In Latin America, streaming is the dominant form of music consumption, accounting for 86.3 percent of the region’s revenue. This aligns well with the digital-first approach of K-pop companies, which rely heavily on streaming platforms for music distribution and fan engagement.

“BTS first gained global popularity in Mexico through KBS’s TV music show ‘Music Bank.’ That’s how they rose to stardom in the Western world with their Latino fan base. K-pop shares many similarities with Latin music in terms of its melody and sentiment. That’s why there are many K-pop fans in Latin America,” a former YG Entertainment official said Tuesday.

“In the case of Psy, he became famous with his music video on YouTube,” the former YG official added.

Music critic Lim Hee-yun agreed that there is a shared musical sensibility between K-pop and Latin music. He described K-pop as having "bbong," a colloquial term for a catchy and somewhat kitschy quality of musical melody. While this term was once used to describe trot singers, it now applies to K-pop as well, indicating its addictive yet old-fashioned and tacky appeal. “Latin pop shares this quality too. The characteristics of the melodies in Latin pop resonate well with the 'bbong' aspect of Korean music," Lim said on Wednesday.

He also noted Latin America's young population as attracting K-pop agencies.

"Latin America has a relatively high birth rate, resulting in a large number of young listeners who maintain a strong loyalty to K-pop as a subculture. Their active engagement on social media has significantly contributed to the viral spread of K-pop," Lim added.