SM artists and Kpop industry face gloomy prospects as SM and HYBE’s management battle carries on
The key components of success, fans, staff and artists are kept silent when their voices are needed the most.
SM Entertainment is a top entertainment company in Korea. However, as the current takeover takes place, the future of many artists such as Red Velvet, aespa, NCT and many others are faced with a gloomy outlook.
According to SBS Entertainment, the stake HYBE is holding, up to March 6th, is 19.43%, including 14,8% stake purchased from former SM CEO Lee Soo Man, 0.98% from Galaxia SM and the rest from former chief producer Lee (3.65%).
According to JoongAng Daily, SM artists have no gains from the fight over control between the management board of SM against HYBE.
Artists’ future are being overlooked
According to Korean media, SM is among the largest entertainment companies in the country. However, the situation changed for the worse when the company was rife with internal conflict. Founder and former CEO Lee Soo Man formed one side while the other members of the management and shareholder board, along with the current CEOs of SM, on the other.
The chaos happened at the start of February, when the SM management board decided to sell shares to Kakao. In response, SM’s founder Lee Soo Man sold his shares to HYBE. To have executive control over the company, the two sides are persuading the major shareholders of the company so that they will receive more votes. In exchange, they promise to bring the best interest to the artists, fans and ultimately the shareholders.
HYBE and SM Entertainment also promise to eliminate old business practices and will use new ways to ensure the rate of return for the shareholders, artists’ creativity and contents for fans.
Nonetheless, Korea JoongAng Daily, an English-language daily, gave their stance on the issue. From their point of view, it is who will be in charge from both sides that can bring about the best results.
Pop critic Kim Do Heon said at the event co-organized by nonprofit activist group Cultural Action and the Seoul National University Asia Center, “It seems as though the companies are only using the artists and fans as a shield for themselves.” The event gathered culture critics and academics in an event themed “How to view the SM Entertainment management battle” debate.
From the critic’s perspective, fans are a key component, “It’s true that the artists and fans do not have a say in the business aspect,” he continued. “What can fans do when the manager says that they’re going to do something? But what the companies keep ignoring is that when it comes to the K-pop industry, fans are not just consumers — they are the key to its success.”
In the public opinion, fans expressed their disappointment with HYBE buying shares from SM on the online community. Half of the staff at SM Entertainment had similar reactions. Despite their disappointment, and even frustration, fans, employees, and the artists themselves have not had the chance to speak up on official channels.
“Both companies are arguing that the current brawl is hurting artists and trainees. If they are so important, then why has no one asked their opinion before all this happened? The reason so many people are being confused and devastated by all this is that nothing was shared with them beforehand,” explained the critic.
HYBE argues that its global management structure — established with the immense global popularity of BTS as the groundwork — will give it an edge in increasing SM artists’ international reach, especially by nurturing the so-called derivative intellectual property (IP) businesses (the production and sales of secondary content based on primary IP, the artists, music and performances, such as videos, webtoons, games and merchandise.)
Nonetheless, the “big businessmen” seem to have forgotten, fans are the primary buyers of such products. If they grow tired of the battle and decide to walk away from SM Entertainment altogether, their “masterplan” will fail because “fandoms cannot be produced artificially,” expressed Lee Jee Heng, a Ph.D. researcher at the Institute for Gender and Affect Studies at Dong Ah University.
SM employees do not have a say in the matter
While the situation is proceeding at a rapid speed, Korea JoongAng Daily reported that even the staff could not voice their opinion.
One major problem that emerged in the midst of the hostility was the lack of a labor union, despite the company’s longevity. It is concluded that the power of the company would naturally belong to the founder.
“The statement from SM Entertainment staff broke my heart,” said critic Seo Jeong Min Gap. “Whether or not Lee Soo Man is at fault, the fact that the employees could only talk about it now means that there is no union to represent their voices. The realities of the entertainment industry, where laborers’ rights are not protected, came to light.”
Diversity of K-pop is at risk
“Can we really say that these companies are hindering the diversity in music? If HYBE does decide to change SM Entertainment’s style, that will be to their loss because the strength of a multi-label system only comes to fruition if you respect each label’s uniqueness,” critic Kim gave his assessment.
Another concerning aspect following the imminent takeover is the monopolization of K-culture. In the consecutive years from 1995 to 1997 and fast forward to 2005, SM, YG, JYP Entertainment and, eventually, BigHit Entertainment was created. These different companies were established with the hope of making themselves known with distinct music and concepts for their company and the ensuing styles of their artists.
Whichever company wins, the end result of the battle will mark a turning point in the history of K-pop, according to Prof. Lee Dong Yeun at the Department of Korean Traditional Arts Theory at the Korea National University of Arts.
“At a time where the old, pre-modern management structures are being ousted from the market, this battle sheds light on essential issues such as the generation shift of first-generation K-pop agency founders and monopolization of content.”
According to professional opinions and critics’ stances, it seems that change is inevitable. What is important is how that change takes place and how it affects their artists, first and foremost, and to the wider K-pop landscape.