Fans, artists don’t know anything about SM Entertainment’s takeover

A picture of the SM Entertainment logo is displayed at the headquarters of the K-pop agency in Seongsu-dong, Seongdong-gu, eastern Seoul. [YONHAP]

SM Entertainment’s entertainers and their fans are simply being used as an excuse to vie for control of one of South Korea’s largest entertainment companies, critics said during a debate on Friday over SM Entertainment’s ongoing stock sale fiasco.

“The companies just seem to be using artists and fans as their own shield,” pop music critic Kim Do-heon said at an event co-organized by nonprofit activist group Cultural Action and the Asia Center at Seoul National University.

Cultural critics and academics participated in the debate on “How to View the SM Entertainment Management Controversy” held at Seoul National University in southern Seoul.

“The entertainer and the fans really don’t have a say when it comes to business,” he continued. “When managers say they’re going to do something, what can fans do? But what these companies keep ignoring is that when it comes to the K-pop industry, fans aren’t just consumers — they’re the key to its success.”

Ever since SM Entertainment’s board first announced it would issue new shares for Kakao in early February, and K-pop agency founder Lee Soo Man hit back at selling his stake to HYBE, the parties involved have been claiming they have the best interests of artists, fans and shareholders.

Both HYBE and SM Entertainment agree that moving away from the old approach of relying on founder Lee for all music production will ensure SM Entertainment increases profits for shareholders, creativity for artists and content for fans. But they are divided on which company would best achieve such an outcome.

Fans have expressed their dissatisfaction with the acquisition of HYBE-SM on online forums, and half of SM Entertainment’s employees also issued a joint statement opposing the transaction with HYBE. Still, there are still no official channels of communication for fans, staff, and especially artists.

Critics and academics took part in a debate titled “How to View the SM Entertainment Management Controversy” at Seoul National University in southern Seoul on Friday. [YOON SO-YEON]

“Both companies are arguing that the current spat is hurting artists and interns,” King said. “If they’re so important, why weren’t they consulted before all this happened? The reason so many people are confused and frustrated by all this is because nothing was shared with them beforehand.”

HYBE believes that its global management structure – established with the enormous global popularity of its boy band BTS – will give it the upper hand in expanding the overseas influence of SM artists, especially by cultivating so-called derivative intellectual property (IP ) business.

Derivative IP business refers to the production and sales of secondary content based on primary IP — artists, their music and performances — such as related videos, web comics, games and merchandise.

But if fans tire of the battle and decide to leave SM Entertainment entirely, the plan to make money from spinoff IPs won’t work, according to SM Dr. Lee Jee-heng. Researcher at the Institute of Gender and Emotion, Dong-A University.

“Derivative IPs cannot work without a strong fan base, but fan bases cannot be artificially generated,” Li said. “BTS’ success in the western world is due to the content of the BTS members, their personalities, and their narratives, not the company’s systematic execution. HYBE argues that it can reproduce BTS’ legacy, denying that fandom is in K -Action in pop.”

Photo of LED trucks parked in front of HYBE headquarters in Yongsan-gu, central Seoul, on Feb. 28 [SCREEN CAPTURE]

Lawyers from law firm Yoon & Yang went to the Seoul Dong District Court on February 22 for the first hearing on SM Entertainment’s injunction to issue new shares for sale to Kakao. [YONHAP]

Fears of smaller rivals that a merger of SM-HYBE or SM-Kakao could result in a K-pop monopoly are less valid globally, especially compared to the world’s three largest music companies: Universal Music Group, Sony Music Entertainment and Warner Music .

“Can we really say that these companies are holding back diversity in music?” critic King said. “If HYBE does decide to change SM Entertainment’s style, it will be their loss, because the power of a multi-label system can only be realized if the uniqueness of each label is respected.”

One of the major issues exposed in the feud is that SM Entertainment does not have a union, despite being one of K-pop’s oldest and largest companies and with its founder alone dominating the industry. company.

208 SM Entertainment employees jointly issued a statement against HYBE’s “hostile takeover” [SCREEN CAPTURE]

SM Entertainment was founded by Lee in 1995, JYP Entertainment by Park Jin-young in 1997, YG Entertainment by Yang Hyun-suk in 1996, and HYBE (then known as Big Hit Entertainment) by Bang Si-hyuk in 2005. All founders have been directing music and concepts for their agency’s artists, so each agency debuts with a different style of artist.

“The statement by the SM Entertainment staff breaks my heart,” said critic Seo Jeong Min-gap. “Whether Li Xiuman is at fault or not, employees can only talk about this matter now, which means that no union can represent their voice. The truth that labor rights in the entertainment industry are not protected has been exposed.”

Regardless of which company wins, the final outcome of the battle will mark a historic moment for K-pop, said Lee Dong-yeon, a professor of Korean traditional art theory at the Korea National University of Arts.

“The results will change the K-pop landscape in unprecedented ways,” he said. “K-pop has been around for 30 years, and this will be the most pivotal moment so far. In an era when old, pre-modern management structures are being driven out of the market, this struggle reveals things like the first generation of K-pop agencies. Fundamental issues such as generational replacement of founders and content monopoly.”

Yoon So Yeon [yoon.soyeon@joongang.co.kr]