The vision of an “SM 3.0” as well as future debut plans, have been unveiled through a recently-published YouTube video.
According to a video titled “SM 3.0: Producing Strategy – Multi ‘Production Center/Label’ System”, which was published on the YouTube channel SMTOWN on February 3rd, SM Entertainment will move away from the monopoly production system of its founder Lee Soo Man.
In particular, such a vision of “SM 3.0” was unveiled by co-representatives of SM Entertainment, Lee Sung Soo and Tak Young Joon in the video.
“From this year, SM wishes to leap forward to the period of ‘SM 3.0’”, they said, adding, “the “SM 3.0 Period” will introduce the Multi ‘Production Center/(Multi) Label’ system as a new production system.”
In this system, the production capabilities accumulated by SM over the years will be distributed to multiple production centers and labels, and each production center will exclusively manage allocated artists. In addition, the production and core functions, as well as decisions will be made independently.
Accordingly, SM artists will be assigned to 5 production centers so that (each center) can independently perform major functions such as production and management.
In addition to the five multi-production centers, SM plans to newly establish an internal and external independent label so that singers with musical competence and creative business potential can independently develop music.
Moreover, SM will establish a music publishing subsidiary, which is wholly owned by the company, so as to ensure the provision of high-quality music to each production center and label.
Meanwhile, a separate music selection council called “A&R Committee” will also be created to help produce music that meets the standard of SM.
On the other hand, it is said that labels will be mainly divided into “Internal Label” of SM Entertainment and “External Label”.Among them, “Internal Label” will be organized for SM artists and related employees who have their own outstanding music style and yet to be prepared to run business independently, and get performance-based compensation depending on the profit earned by each artist.
Meanwhile, “External Label” is a separate entity consisted of artists and employees
who are capable of independent creation and business activity, thus earning a separate profit and perform every function of IP production, monetization and management independently.
Additionally, SM employees will be given opportunities to become shareholders, and SM will provide support for acquired labels and external artists as well.
At the same time, SM plans to expand their musical spectrum and strengthen musical influence by acquiring labels of various genres that SM does not focus on, such as ballad, R&B, and hip-hop.
The introduction of SM’s multi-production center and label system is accepted as a general trend in the music industry, which has grown in size due to the spread of the K-pop wave.HYBE, a competitor, has a label system, with subsidiary companies such as Big Hit Music (BTS), Pledis (SEVENTEEN), Source Music (LE SSERAFIM), and ADOR (New Jeans), while JYP has a “division system” similar to SM’s production center and label system.
Furthermore, SM will be creating a virtual artist IP production center to produce virtual human avatars such as Naevis (a helper character appearing in the SM worldview).
SM expected that this system reorganization would speed up the discovery of newcomers and the production of albums.
Finally, SM announced that it aims to debut 3 rookie groups and 1 solo virtual singer in 2023, and plans to produce more than 2 rookie groups every year after.
In particular, a new girl group, a new boy group, and NCT Japanese unit “NCT Tokyo” are scheduled to be introduced this year.
Through this, SM set a goal of selling 18 million copies in 2023 by releasing more than 40 albums, an increase of more than 30% compared to last year.
As previously announced, Lee Soo Man’s executive producer contract with SM has ended, so he will withdraw from producing activities.
Regarding this, CEO Lee Sung Soo said, “Although the executive producer agreement has been terminated,we would like to express our sincere gratitude to Lee Soo Man, who will continue to support our company as a shareholder.”