Experts believe that becoming SM’s largest shareholder is HYBE’s smart move as BTS members are enlisting one after another.
HYBE recently made headlines by purchasing 14.8% shares and became the largest shareholder of SM Entertainment. However, analysts fear that the HYBE–SM alliance might weaken K-pop because of the loss of diversity.
In addition to BTS, HYBE also manages SEVENTEEN, another top 3rd gen boy group, and multiple successful 4th gen groups such as TXT, LE SSERAFIM, NewJeans, ENHYPEN under its sublabels. Meanwhile, SM houses famous groups namely TVXQ, Super Junior, Girls’ Generation, EXO, Red Velvet, NCT, aespa… SM has a good reputation in Japan, as the first K-pop company to explore this market.
“Thanks to the success of BTS, HYBE has access to the supply chain of the global music market. If HYBE can use SM works, the two companies will create synergy and capture a larger market share globally,” said Kim Jin Woo, a professor at the Seoul Institute of the Arts.
According to Professor Kim, the members of BTS, who accounts for 65% of HYBE’s revenue in 2022, have begun and will begin to fulfill their mandatory military service. Although girl groups like NewJeans and LE SSERAFIM are doing well, they are heavily dependent on sales from the Japanese market. Therefore, bringing SM’s established groups will be a wise solution, helping HYBE maintain strength while BTS members are absent.
Source: k14
