Twin Cities businesses cash in on K-pop craze

Tucked into a yellow-brick building in northeast Minneapolis is a gateway to South Korea.

There's no obvious signage to announce OtaKuPop's location, but once inside, colors pop off the walls. A mounted TV plays bright, catchy music videos, their melodies ringing throughout the small store. Posters cover the windows, and what look like bookcases are actually shelves filled with albums of all K-pop music.

OtaKuPop is one of several Twin Cities businesses bringing the $10 billion Korean pop music industry to Minnesota. And somewhat counterintuitively, physical media like magazines, trading cards, figurines, stickers and, yes, CDs make up many of those sales.

Streaming services such as Spotify have eroded physical media sales in recent years. But K-pop has found a way to avoid that. In fact, Asia led the world in physical music sales in 2023, making up nearly half of physical media's total global revenue of $5.1 billion, according to the International Federation of the Phonographic Industry.

"Western artists' CDs primarily serve the function of listening to music," said Stephanie Choi, a K-pop music expert at the University of Colorado at Buffalo. "In contrast, K-pop companies have transformed CDs into elaborate packages that include posters, photo albums and other items designed to complement a specific concept."

Tina Jeon, a graduate student at the University of Minnesota, grew up around K-pop music in Changwon, South Korea, going to bookstores to buy albums from her favorite groups. For her, the inclusions — the photocards, posters, stickers and other fun bonuses included with the CD — are an important part of the experience.

"When I opened it, [the photocard] was my bias, my favorite member," Jeon said, recalling a time she bought a CD by the boy group Seventeen. "It was just really exciting to get that."

Stimulating a 'collector's desire'

K-pop became a global force in recent years, growing during the 1990s general obsession with boy bands and girl groups. Current idols — the term for K-pop stars or group members — like BTS and Blackpink began dominating Western music charts in the mid-2010s

Part of the reason for its success is the sheer amount of content K-pop artists generate for their fans, from online videos to magazine spreads to the highly coveted photocards included in albums.

Choi said physical items like that stimulate a collector's desire in K-pop fans.

K-pop artists often release multiple versions of the same album that have different inclusions along with random photocards, which are like trading cards but with selfie photos of the group members. To collect the full set, fans need to buy more albums, trade with other fans or purchase them at a sometimes steep price on the secondary market.

Other non-album merchandise includes figurines, clothing and light sticks, group-specific flashlights that fans wave around at concerts that allow fans to show their solidarity with a group or idol, Choi said.

"People enjoy collecting things," said AJ Shaw, an online K-pop content creator in Minnesota, "and they see these albums that are collectible in themselves but then also have collectible bits inside of the albums."

Shaw, known as Dizzzy online and in the local K-pop community, has amassed almost 75,000 followers on TikTok posting videos about his collection, K-pop news and local events. In one video, Shaw says he has accumulated more than 1,600 physical K-pop albums since he began collecting in 2018.

Fans will also invest in binders and sleeves to sort their photocard collection and keep them safe, Shaw said. He likened it to collecting Pokémon cards, which has a similar "gotta catch 'em all" mentality.

A hobby becomes a business

When OtaKuPop owner Derik Thaden's family took trips to Chicago when he was a kid, it was a chance to "load up on stuff in Koreatown," he said. That's where Thaden, adopted from South Korea, first started collecting K-pop albums in the late 1990s.

"I just enjoyed how it sounded," he said.

What started out as an interest in the music grew into a hobby. Around 2021, Thaden began selling parts of his collection online to fund his tickets to K-pop shows and to buy new merchandise.

In October 2023, that hobby became a career when Thaden opened OtaKuPop.

OtaKuPop's albums from a variety of K-pop artists line the walls, including many from Thaden's favorite girl group, Dreamcatcher. Shelves underneath the checkout counter house a collection of Korean magazines and light sticks.

Thaden set up shop in the same building his parents have been renting for 30 years, which Thaden said contributes to his low overhead. His mom previously used the space as a storage room for her vineyard supply business.

Although online stores often sell the same CDs as OtaKuPop and sometimes even offer exclusive versions, Thaden said there is something different about the physical store experience that attracts customers. Albums cost around $20 to $30, and Thaden said he tries to take home between 30% to 40% of each CD sold.

"Having the actual product in your hand is totally different than just seeing a picture of it," Thaden said. "I think it's just the drive of that, 'You can just get it now' instead of having to wait, even if it's a better deal online."

Customers who come into the store are not just looking for the albums they don't have yet, Thaden said. They often purchase multiples of the same album in hopes of unboxing the photocard they need to complete their collection.

Retailers join in

Dedicated K-pop stores are not the only source for K-pop products, as other stores have begun carving out K-pop sections of their own.

Retail giants like Walmart and Minneapolis-based Target sell K-pop albums online and in-store. They, along with Barnes and Noble, offer exclusive inclusions like photocards. Target said it has more than 50 K-pop albums exclusive to the chain.

Record store Electric Fetus, a mainstay of Minneapolis' music scene since 1968, started carrying K-pop albums around 2020, said Jim Novak, the store's music buyer. Now, nestled between R&B CDs and electronic vinyl albums, a K-pop end cap offers a few hundred physical records, about 10% of the 3,000 physical albums offered in the store, according to Novak.

"It's currently driving a whole different generation of people into our shop," Novak said.

Novak appreciates the thought put into K-pop physical releases. Each album takes a different shape: a classic CD case, a thick cardboard box or even a notepad. These different forms make it fit best as its own end cap, he said.

Novak, who designed the section, said he is still learning what the genre means to its fans. When he sees a young group flip through the CDs, he can't help but feel excited.

"It is really encouraging to see young people be so into physical media," he said.

A local community

Sweet Escape opened in 2022 in the Maplewood Mall and often brings Twin Cities K-pop fans together through events hosted at the mall's Center Court.

The store has put on photocard trading events, a dance challenge and a concert for the K-pop solo star Black On. Sweet Escape also hosted a dance performance from a un-debuted boy group HinLOVE. K-pop idols often train for years under a certain label before debuting with their own music.

There is already a K-pop community out there, said store owner Anny Lee. But that community is spread out, so Lee is always looking to small events to bring everyone together and celebrate their common interest.

"It's a tough world out there right now," Lee said. "So I think it's just anything that'll kind of help these kids, young adults, adults to feel like they're included or a part of something bigger."

Beyond concerts, local K-pop fans can also gather at themed nights at music venues or bars. Shaw, also a friend of Thaden's, started a photocard trading board at OtaKuPop. He thought it would draw more people into the space and encourage them to check on the board regularly.

It's important for return customers "to be able to talk to people about something that you love and that you're passionate about," Shaw said.

The store has its regulars, but Thaden said he is surprised how many new customers show up to the store.

"I have a feeling," Thaden said, "I have barely scratched the surface of the K-pop community in Minnesota."

Caleb.Fravel@startribune.com is a University of Minnesota student reporter on assignment for the Star Tribune.