SM Entertainment is in the endgame now

Yes, it’s a double update!!! I’m going to be MIA a lot for the next week and a half due to my observance of the Jewish holiday Pesach/Passover, so wanted to get more than one piece out this week. I may do another if I have time. Hit me up in the comments if you have any topics you’d like to see talked about this week.

Last week, SM Entertainment had a shareholder meeting where pretty much everything about the corporate governance of the company was revamped. New CEO, formerly SM’s CFO, new board of directors members, new management, thanks to Kakao coming out on top in the fight for SM Entertainment.

With new management and a new directive in the form of SM 3.0, we are, to quote Dr. Strange, in the endgame now.

In the middle of February, as drama increased, I emailed myself a potential story idea, a common occurrence: “It feels like an end for SM. But is it the end?”

I’m still pondering this, but one thing is clear: we are clearly at the end of something, and the beginning of something new. Where that takes SM is to be determined, but based on the SM 3.0 plans and the management reshuffling, I think a few things are clear, and one is that the business side of things has won out over the creative aspect. For an entertainment firm, that’s a bit concerning, to say the least, at least for music lovers out there, such as myself. We’re at a point of directional change for SM, and I am eagerly watching how this company ends up, and if it will find a way to please both investors and audiences.

K-pop has always been a business first, art-focused second, but when you’re in the business of entertainment, you would assume the entertainment side of things would at least be a priority at the company’s highest levels, but in recent years we’ve seen SM increasingly losing its creatives in the uppermost tiers of the company. As investors, and thus money, have become the focus of SM in recent years, things like intellectual property (IP) licensing, revenue-creating apps, and the web3 metaverse and crypto have taken center stage. SM is far from the only company to be doing this nowadays, but the 3.0 plan, which features a subtitle of “Global Expansion & Investment Strategy” makes it clear what the priorities are: how to expand and make money.

Businesses are going to business, and you do need money to create high quality art in this world. This is nothing new, it’s just a new end and a new beginning to what SM is doing.

The concern, to me, is that looking at the updated SM board of directors, there is nobody really there to ensure the artistic aspect of things amid the 3.0 business-focused direction. According to a press release, the new board of directors are almost wholly experts in various fields of business and technology, in comparison to the previous reign, when in the past production was always prioritized in the c-suite, such as with former co-CEO Chris Lee Sungsoo previously being on the A&R side of things:

As for the Registered Directors, all ten candidates proposed by the Board of Directors were appointed, including Cheol-hyuk Jang, Chief Financial Officer (CFO) of SM Entertainment [now CEO], Ji-won Kim, Head of the SM Entertainment Marketing Center, and Jung-min Choi, Head of the SM Entertainment Global Business Center as Inside Directors.

Five candidates for Outside Director were appointed, including Kyu-shik Kim, Chairman of the Korean Corporate Governance Forum, Tae-hee Kim, Attorney at Pyeong San Law Firm, Jung-bien Moon, Professor at Korea University Business School, Seung-min Lee, Partner at Peter & Kim, and Sung-moon Cho, CEO of Chartmetrics, as well as the two new candidates for Non-executive Director, Chang-hwan Lee, CEO of Align Partners, and Yoon-joong Jang, EVP and Global Strategy Officer at Kakao Entertainment.

None of the board members are particularly a surprise, though I didn’t know about the Chartmetrics CEO being involved, so that’s something to keep an eye on. It’s just the extreme business focus which I think is telling, and worrying re the quality of SM’s forthcoming musical and creative releases, ostensibly the IP that will fuel their growth.

SM Entertainment is a company at the end of the day, but I think it’ll take some time to see whether focusing on profits rather than the basis of the company, is it even the same company? Lee Soo-man, founder of SM, doesn’t seem to think so: “the era of SM, which I founded and named with my initials, has ended as of today.” Lee said multiple times that he had wanted to partner with Hybe because he valued Bang Si-hyuk’s artistic and business vision for SM’s future, so it’s going to be interesting to see how the Kakao-SM 3.0 plan goes in comparison to how Hybe has approached its business and growth.

There is some hope, I think, for SM 3.0 keeping SM’s identity while still growing financially, even if I’m still wondering where the creatives are. Acquiring music publishing companies and expanding labels is a key element of the business model, with regional growth, metaverse and fan-oriented platforms there but longer in-term.

Expanding SM’s musical portfolio, both in Korea and outside of it, is of importance for SM 3.0, with an emphasis on expanding genres. A major goal is to secure a competitive artist pool, using the music publishing business as the engine for SM’s high growth. The goal is to become the number one company in the K-pop industry within the next three years. Considering that SM has fallen by the wayside in the face of the success of Hybe and, to a lesser degree, JYP, this is a lofty goal. If SM were to accomplish it, I doubt the SM that we’ve seen in recent years will feel like the SM we see by the end of 2025.

Personally, I hope the business of music doesn’t make SM turn away from the art of the music, ruining its artistic legacy in the pursuit of investor dividends. I hope within the next few months we see that some of the company’s creative decision makers (only a handful of whom are left after people have left in recent years) get to take the reigns, and that the SM 3.0 endgame sees not just dollars and won but also art and creativity. If it can’t find a balance, it may very well truly be the end of SM as a K-pop powerhouse, but for now we’ll have to wait and see.

What I’m working on

In case you missed it, Notes on K-pop’s first longform interview was with Fifty Fifty. If you remember (or don’t!), I really loved their album last year, so I’m glad to see them thriving in 2023 with their rising viral hit Cupid. The members were really fun and engaging to chat with, and you could clearly see their love of music. I wish them the best.

Also for Notes on K-pop, I wrote very emotionally about how I felt watching the fallout from Chaeyoung’s t-shirt issues.

I spoke with Arirang News in South Korea about the fallout from the SM-Hybe-Kakao dealings.

Had a chat with LØREN for Variety, the Black Label rocker. I didn’t get into it in the piece since it’s not about me but LØREN, but his music and experiences were like a punch to the gut, reminding me of the youth I honestly had tried to repress. The period of my life when Nobody’s Listening by Linkin Park’s was played over and over again, along with the rest of Meteora, because I was just that edgy in my middle school angst and depression. As an adult, the song has a different meaning for me, but I really got into my feels after this interview for a few days so sorry if I didn’t get back to your texts a few weeks back, it was because I was in my feels putting LØREN’s album on repeat and reminiscing with my inner child.

What I’m watching

Peak Time, the JTBC competition show between boy bands and solo male artists trying to revitalize their career, or just rookies trying to get their names out there. I started watching primarily because I saw a now-viral performance of Moon Jongup, of B.A.P, but became intrigued so have kept watching. People keep asking if it’s better than Boys Planet, the male alternative to the Girls Planet season that brought us Kep1er, but I haven’t watched either of the Planet shows so I can’t compare better or worst, but since Peak Time has both new and old talent competing, it’s an interesting dynamic.

What I’m listening to

Passover begins this week, so I entertainment myself making a pretty silly 10 plagues-themed K-pop playlist. I actually hate playlisting so I didn’t literally make a playlist, but enjoy.

🩸Blood-Day6

🐸Naughty Boy-Pentagon

🪳Short Hair-AOA

🦁Wild-9Muses

🐮Animal-Jo Kwon feat. J.Hope

🥵I’m so sick-Apink

⛈️Storm-Super Junior

🐜The Grasshopper Song-Sunny Hill

⚫️Whispers in the Dark-Monsta X

🪦Dead Man Running-Seulgi

Beyond that, I found myself really pleasantly surprised with Jisoo’s Flower. I don’t know if it’s my favorite Blackpink solo song, but it’s definitely up there for contention. At first I didn’t think much of it, but after a few listens it’s something I had to put on repeat over the past few days. There’s something both elegant and anxious about the song structure, which even at this moment I’m not even sure I like but I’m obsessed with it even so.

Aespa’s Hold on Tight, a song from the Tetris film, is maybe this year’s best K-pop surprise so far? It dropped with little notice, and it’s a different sort of fare from aespa, but a very welcome one. It’s an electronic tune that pulsates with glitchy synth beats and drives along the quartet’s vocals. It’s notably devoid of any rap breaks, as is typical of K-pop nowadays, but has a few “for your life” exclamations interlaced into the harmonizing chorus. I really enjoy it, personally, though I know it’s not for everyone.

I’ve also spent the past few days listening two albums I didn’t expect to love, the first being boygenius’s the record, a new album from the group of friends. We’re In Love especially hit me hard, but I think maybe for a different reason that it’s meant to, which is that it’s an ode to the love between the three friends.

During the pandemic, while other people were learning hobbies or how to bake bread, I fell down a rabbit hole into MDZS, and it’s Cdrama The Untamed. This is not the time or place to get into why this BL romance-horror-personal trauma story resonated with me, but there’s something about We’re In Love that feels like it could be an alternate telling of the story, and I cannot stop thinking about it. I hope someone uses it for some fic inspiration, personally. The song is gorgeous in its own right about what it says about love and relationships, but my little fangirl heart was really in its feels so I had to share. And don’t worry, there’s a bit of a K-pop connection to: Wang Yibo, who starred in The Untamed, is/was a member of K-pop group UNIQ.

Speaking of SM… The other album was 한번 더, OK, the 2007 sole Korean LP from CSJH, The Grace, and something I had never listened to in full until the other day. I got into K-pop a year after the album’s release, and completely missed it. A lot of my early K-pop history knowledge comes from one-offs, so I tend to spend a lot of time trying to educate myself about earlier releases thanks to my Apple Music account, but I’m mad at myself that this took so long to discover. This album clearly resonated, especially the title track, translated to One More Time, OK?, probably because it’s very much an album reflective of its era, which was my middle school years. The album as a whole is a great listen, plus a remake of ABBA’s Dancing Queen and a collaboration with Kyuhyun of Super Junior are both pleasant surprises.

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