The ambition to dominate K-pop of the entertainment company that became an empire thanks to BTS
Completing the acquisition of 14.8% of SM shares, the public saw even more clearly HYBE’s ambition to rule the industry.
On February 22, the CEO of HYBE Labels posted a letter announcing that HYBE has completed the acquisition of 14.8% shares from Lee Soo Man, officially becoming the largest shareholder of SM. Since the news about this deal broke out, K-pop fans and the general public have been taken aback by the financial power of HYBE.
HYBE, formerly known as Big Hit, was founded by Bang Si Hyuk in 2005. In the early years, Big Hit struggled to operate. In 2013, BTS debuted when Big Hit was on the verge of bankruptcy with a huge amount of debt. Rookie BTS at the time did not receive proper investment. They really went up from negative numbers instead of zero.
In 2016, BTS rose to the top. In just three years, by 2019, BTS reached beyond the Korean border. BTS conquered the Billboard Hot 100, received Grammy nominations and gained millions of fans around the world. The global impact of BTS brought their company huge profits, saved Big Hit from debt. Big Hit became HYBE – a prominent entertainment empire. HYBE is increasingly showing its “dictatorship” and ambition to take over K-pop through successively buying shares of entertainment companies or acquiring small companies, turning Kpop into a miniature ecosystem where HYBE holds the highest ability to dominate.
Acquiring small and medium companies, foreign record labels, buying Big 3 shares
Purchasing Source Music in July 2019 is HYBE’s first “expansion” step. At the time, Source Music managed GFriend, a successful 3rd gen girl group that was doing well. Source Music coming under Big Hit faced many objections from fans. However, the acquisition was still finalized. Source Music is currently a label under HYBE and is directly managing LE SSERAFIM.
In 2020, Big Hit changed its name to HYBE and continued to acquire Pledis Entertainment, the company of Nu’est and SEVENTEEN. Taking control of Pledis, HYBE automatically owns SEVENTEEN, another top-tier 3rd gen boy group besides BTS.
In 2021, HYBE participated in the competition for SM shares with Kakao and CJ Corporation, which was rejected by Lee Soo Man. In the end, Lee Soo Man sold most of his shares to save himself, making HYBE the largest shareholder in SM with 14.8% on February 22. HYBE being SM’s largest shareholder has a huge impact on the market, as SM is a big company, a K-pop pillar for 30 years. Fans are concerned that HYBE’s influence on SM will bring imbalances to not only SM but the entire industry.
In addition to “sweeping” domestic entertainment companies, HYBE also shocked the public when in April 2021, HYBE acquired all shares of Ithaca Holdings – a company led by Scooter Braun, Justin Bieber’s longtime manager. By February 2022, HYBE completed the acquisition of QC Music, an American hip hop label that houses artists like Migos, Lil Baby, Lil Yachty,… This has increased HYBE’s connections in the States.
HYBE’s involvement with the creative process of artists under its label
SM fans’ protest against HYBE’s interference in artist management is not baseless. Looking from actual cases, it can be seen that HYBE has a tendency to intervene aggressively, even completely changing the concept of the artists. GFriend is the clearest example.
From the group with the most successful pure girl concept, GFriend gradually lost their charm and ended up disbanding in 2021, just 2 years after coming under HYBE. Blowing up thanks to “Me Gusta tu”, “Rough”,… GFriend used to be one of the most prominent 3rd gen girl groups, competing directly with TWICE when BLACKPINK was just a rookie. But under HYBE, GFriend slowed down in the girl group race.
From the signature pure concept, GFriend transformed into a mature image that no longer suited the public’s taste. GFriend’s production team was completely replaced. Their music was produced by the HYBE team including FRANTS, Pdogg, Bang Si Hyuk, and their MV was done by the director specializing in making MVs for HYBE. This took away GFriend’s original color that was loved by many. Such a change received a reaction that did not meet expectations, so HYBE gradually neglected GFriend, causing the group to freeze its activities and disband in the displeasure of the members.
HYBE will dominate K-pop through SM?
SM had a time of leading the K-pop industry alongside JYP – YG for nearly 3 decades. Experts have analyzed HYBE’s ability to take over K-pop through SM. SM now manages profitable groups that are considered direct rivals of HYBE artists as well as YG and JYP.
If HYBE takes over SM, HYBE may disband some small and medium groups. The schedules of aespa, NCT or artists who are set to be launched can be more or less affected by HYBE. The possibility of trainees from China and Southeast Asia will be reduced due to the tendency of HYBE to often seek new talent from Japan and Australia. Lee Soo Man being stripped of executive authority will cause SMTOWN’s identity to be damaged, even completely lost.
HYBE will continuously launch global projects. This is also considered a good sign for artists under SM. HYBE’s financial power and connections are a favorable “supporting platform” for SM idols to promote internationally, especially in the US. But there is no guarantee that HYBE will take good care of SM idols. K-pop is changing its leaders, from Big3 with SM -YG – JYP to possibly “HYBE and friends”. Continuously expanding its influence, HYBE’s ambition is unstoppable!
Source: k14.
