The Korean craze that is about to sweep the nation

"The nine young women of Girls' Generation sauntered onto the performance stage of Late Show With David Letterman. Flanked by a DJ and live drummer, the South Korean pop group wore lacy black mini-dresses and thigh-high leather boots, as if they were hosting a gothic cocktail party", according to the LA Times.

"The band's gently lascivious choreography underscored the track's sex-appeal boasts: lead singer Kim Taeyeon made come-hither hand gestures while her bandmates pulled versions of Lady Gaga's alien body bends. "

This is K-pop. It originated in South Korea but has now branched out and is experiencing booming recognition and success across the globe, including America. It combines a synergy of fast-moving pop culture alongside cutting edge media technology.

Even if you won't be rushing out to buy the Girls' Generation's latest hits, don't be surprised if posters of Kim Taeyon start to appear on the bedroom walls of your teenage children. If K-Pop has made it onto American TV you can bet that it is only a matter of time before we see it over here, and one man who wants to make this happen is David Ciclitara.

The penny share that's tapping this flourishing teen market

Ciclitara is chairman and the major shareholder of AIM-quoted Parallel Media (AIM:PAA) and he rang me from Korea to enthuse about K-Pop. Parallel has just arranged a concert in Singapore for K-Pop boy band Shinwa. "I have never seen anything move so quickly", he told me. The concert sold out within 40 minutes, taking £1.1m. Now Parallel Media, through a joint venture with CJ E &M is promoting two more concerts, for The Wonder Girls and 2PM, all part of a strategy to diversify away from its roots as a promoter of sporting events.

Ciclitara was in Korea where Parallel Media has just staged the Ballantine's Golf Championship, a European Tour event that attracted a crowd of 45,000. This is Parallel Media's flagship event and Ciclitara reckons that it alone more than justifies the group's sub £4m stock market value.

Unlike many tournaments that must be renegotiated regularly with the European Tour, Parallel has the Korean event in perpetuity. Although the European Tour retains the international TV rights, Parallel is able to sell the local TV rights as well as tickets for the event. But the majority of the event's revenue comes from sponsorship. Ballantines, one of many brands keen to tap the Asian thirst for Western luxury, is the lead sponsor and this year's event generated £5.4m of revenue for Parallel and a profit thought to be in the region of £1m.

An exciting new path for smart media platforms

Last month Singaporean businessman Henry Wee subscribed for 1.43 million new shares at 35p, a considerable premium to the stock market price. No doubt he is aware of the value of the Ballantine's Golf Championship, as well as the rapidly emerging Asian pop music scene, centred on K-Pop. This now will be the focus for Parallel Media. While it will continue to run golf tournaments, Parallel is intent now upon exploiting the opportunity in entertainment.

As well as its expertise in staging events and attracting sponsorship, Parallel now has one other very promising initiative. This is called Parallel Smart Media, created at a cost of $5m in conjunction with another Korean enterprise, Talspace Inc.

The initiative incorporates live high definition video screening coupled with e-commerce facilities, high definition image galleries and the ability to integrate into social networks. The bottom line is that it enables anybody to start up their own TV channel and broadcast it in multiple languages to any smart media platform or viewing device. It has obvious appeal for entertainers or football clubs, for example, but early adopters are likely to be luxury goods brands and special interest groups such as classic car enthusiasts.

Parallel has had a low profile but wants to change this. "We have seen phenomenal growth in K-Pop in the last year", says Ciclitara, and he wants UK investors to grasp the possibilities. The confluence of sport and entertainment, the drive of luxury goods into the Asian market and the new digital media technologies make for an interesting cocktail.

This article is taken from Tom Bulford's free twice-weekly small-cap investment email The Penny Sleuth. Sign up to The Penny Sleuth here.

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