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| ▲ These photos, provided by HYBE and SM Entertainment, show Bang Si-hyuk and Lee Soo-man. (PHOTO NOT FOR SALE) (Yonhap) |
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| ▲ This photo, provided by SM Entertainment, shows BoA. (PHOTO NOT FOR SALE) (Yonhap) |
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| ▲ This photo, provided by BigHit Music, shows BTS. (PHOTO NOT FOR SALE) (Yonhap) |
SEOUL, Feb. 12 (Yonhap) -- HYBE, the South Korean entertainment agency behind BTS and TXT, is set to serve as a major turning point in the K-pop industry following its acquisition of a leading stake in its rival 28-year-old agency SM Entertainment.
The acquisition is now dubbed as the birth of a gigantic “Dinosaur-like” agency by K-pop industry analysts, as this collaboration is expected to serve as a catalyst for K-pop’s ever-growing influence to even expand further.
According to the music industry Sunday, K-pop album export sales reached an all-time high of a whopping 231.389 million dollars (about KRW 294 billion) based on import and export trade statistics of the Korea Customs Service last year, which is triple the $64.399 million four years ago in 2018.
In addition to the so-called “Big Three” consisting of Japan, China, and the U.S., there were several more countries added to the list of the countries to which Korea exported albums last year, including Oman, Mongolia, Iraq, Maldives, and Panama, which are nations that have been relatively unfamiliar with the Korean Wave. Such big numbers demonstrate the rapidly growing value and influence of K-pop.
In particular, in the U.S., which long stands as the world’s largest music market, K-pop albums set new records by securing 7 spots out of the 10 top CD sales last year: BTS touched down in second place, followed by TOMORROW X TOGETHER sitting on the 3rd, Stray Kids scoring both 5th and 7th, TWICE on the 6th, ENHYPEN on the 8th, and NCT 127 coming in as the 10th. It is noteworthy that four of these seven Korean-based albums were released by SM Entertainment and HYBE.
HYBE confirmed its purchase of 3.5 million shares from SM Entertainment founder Lee Soo-man, the largest shareholder of SM Entertainment, on Feb. 10, saying, “We look forward to creating a strategic synergy effect with SM Entertainment all across the industry,” adding, “We will be expanding the fan platform that is currently leading the global market to create a venue where more fans can meet their favorite artists and enjoy K-pop.”
Bang Si-hyuk, HYBE’s chairman, who is known to have founded BTS as the K-pop supergroup, is expected to hold even greater influence in the K-pop industry, even greater than the incredible power he currently holds as a so-called “hit machine,” by signing this big deal.
On Feb. 9, the day before this shocking acquisition was publicly announced, HYBE America, the U.S. division of HYBE Labels, officially acquired Quality Control (QC) Media Holdings, which is home to acts such as Lil Baby, Migos, and more. In 2021, this agency made its first move by acquiring Scooter Braun’s “Itaka Holdings,” home to some biggest pop stars including Justin Bieber and Ariana Grande.
Chairman Bang made a promise saying, “We will further expand K-pop’s status in the global market by investing HYBE’s capabilities.”
Meanwhile, per SM Entertainment, it is no exaggeration to say that this K-pop powerhouse is the god-father of the Korean Wave and K-pop craze.
During his concert in August last year, Kangta, a singer from the legendary boy band H.O.T., referred to the H.O.T.’s 2000 Beijing Concert as where the term “Hallyu” originated from and was reported in the local media outlets. “I believe the concert opened an entrance for today’s K-pop artists to the overseas market,” the singer added.
SM Entertainment later drew global attention by introducing the first-generation girl group S.E.S. to Japan and heralded the era of the Korean Wave with BoA, who made her mega-hit debut in Japan in 2001. Since then, the entertainment has been home to several iconic K-pop artists, including TVXQ, Girls’ Generation, SHINee, and EXO, who gathered millions of Japanese fans.
BoA then debuted in the U.S. market in 2008 and triumphantly entered the “Billboard 200” chart the following year as the very first Korean artist. In other words, the long history of SM Entertainment tells the history of K-pop and its entrance into the global market.
The Korean music industry now predicts that HYBE, home to smash hit artists including BTS, Seventeen, TXT, NewJeans, LE SSERAPHIM, will be able to create a powerful synergy effect with the long history and know-how SM Entertainment holds and boasts.
Lim Jin-mo, a South Korean pop music critic, said, “HYBE’s acquisition of the legendary SM Entertainment, which served as the leading entertainment agency in the early days of the Korean Wave, is likely to bring forth a tectonic shift in the global K-pop market.”
He added, “It is an understatement to simply say that HYBE acquired Lee Soo-man’s stake; it is HYBE expanding its stake in the global market.”
Kim Jin-woo, a senior researcher at the Circle Chart, commented, “HYBE has already set up its powerful global supply chain via the success of BTS, which implies that all they have left to do is simply sending out their IP (Intellectual Property) abroad.” He added, “HYBE will now be able to target North American or European market very quickly.”
Kim Do-yoon, another pop music critic, said, “It marks a historic merge between two K-pop powerhouses – between HYBE, centered on the West, and SM Entertainment, centered on the Asian market such as China,” adding, “If SM Entertainment’s strength, A&R (Artist and Repertoire), is blended with HYBE’s capital power and diversified labels, an entertainment agency with a ‘mega-IP’ will be formed.” He also predicted that the merger will create an ever more internationally competitive agency.
Overseas media outlets have also been taking a close look at this historical collaboration.
Reuters quoted Kim Do-heon, a Korean popular music critic, as saying, “With BTS on hiatus, SM Entertainment’s extensive portfolio will prove commercially beneficial for HYBE.”
Bloomberg evaluated, “HYBE, manager of BTS, is jumping into the middle of a messy corporate battle, allying with the godfather of K-pop (Lee Soo-man) to hinder tech giant Kakao’s foray into the entertainment arena.”
In the article titled “How HYBE Is Moving Beyond BTS to Become Music’s Next Major Player,” Billboard wrote, “With a major acquisition and an investment this week, the K-pop powerhouse is further diversifying and establishing itself on the world stage.”
(This article is translated from Korean to English by Ha eun Lee)
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