Rumor Artists could leave SM under new ownership? (1 Viewer)

[the101]

Interesting story in the JoongAng today..

하이브가 SM 인수했는데, 샤이니·엑소·레드벨벳 나가버리면? | 중앙일보

SM을 향한 하이브와 카카오 전쟁이 격화하고 있다.

www.joongang.co.kr

Translation through Papago:
The war between Hive and Kakao toward SM is intensifying. Kakao, which had been quiet, declared war on Hive on the 27th, signaling a full-fledged participation in the war. Hive also continued to attack Kakao, asking it to express its intention to participate in management honestly. SM executives, who joined hands with Kakao, appealed to K-pop fandom, saying SM artists under Hive will be put on the back burner.

Kim Sung-soo, CEO of Kakao Entertainment, said in a statement, "We can no longer watch the current situation that threatens the survival of the partnership with SM itself," adding, "We believe that a full revision of the existing strategy is inevitable, and we will actively seek all necessary measures in close consultation with Kakao."
CEO Kim dismissed criticism that Kakao is fighting for management rights with Hive over SM. "Kakao's investment to secure a 9.05% stake in SM is part of a strategic partnership to create horizontal synergy and a virtuous cycle based on the business competitiveness of the three companies, including Kakao Entertainment and SM," he stressed. It directly refuted Hive's earlier claim that "the contract to acquire convertible bonds between SM and Kakao is an unreasonable contract that undermines shareholder interests and restricts SM artist rights."

Hive, who heard about Kakao's position, immediately began to refute it again. Hive said, "The announcement of Kakao's position did not fully explain the problems raised by the company," adding, "We can fully consider Kakao's business proposal if it helps the SM business on the premise that Kakao is not interested in participating in management." In other words, Kakao's claim that it is not interested in SM management rights cannot be trusted.

Both sides put the same logic ahead that if the other side wins, it will damage SM artists. SM artists are the most worried in this situation. SHINee member Key did a live broadcast online to celebrate the release of his second full-length repackage album on the 13th, saying, "I want to perform more than anyone else, but I don't know where to talk." "The company is in turmoil now," he expressed regret.
Red Velvet member Seulgi blurted out her words at a fan meeting held on the same day, saying, "I'm never going to make anything difficult," when asked by fans to dance to the group New Jin's "High Ip Boy." It was interpreted as saying that it would not create unnecessary misunderstandings at a time when Hive, the agency of New Jin's, became a major shareholder of SM. Taeyeon, a member of Girls' Generation, expressed discomfort by posting on social media on the 17th, "Everyone lives hard," a line from the movie "Unfair Trade."

In the acceptance speech, 'Teacher Lee Soo-man' also disappeared. Espa and NCT did not mention former general producer Lee Soo-man in their acceptance speech after receiving the award at the "Circle Chart Music Awards 2022" on the 18th. Both groups did not forget to thank Lee Soo-man in their past acceptance speeches.
Everyone but Espa is close to renewing their contracts.

In the worst case, Hive took over SM, which could lead to everyone leaving. Currently, SM members include Kangta, BoA, TVXQ (Choi Chang-min, U-Know Yunho), Super Junior, Girls' Generation (Taeyeon, Yoona, Yuri, Hoyeon, Sunny), SHINee, EXO, Red Velvet, NCT, SuperM, Espa, and God the Beat.

SM has not made any official comment on when the members will renew their contracts since EXO. In the case of Red Velvet, it has been 9 years since its debut this year, and rumors have emerged that the contract will expire from 2021, its 7th year. However, it is still active without a separate announcement. For this reason, the industry estimates that it renewed its contract in 2021. There is also an analysis that the original contract was 8-10 years, and this year was the time to renew the contract.

Some NCT members, who debuted in 2016, are set to renew their contracts this year as the "seventh year." Senior groups such as Super Junior, SHINee, and EXO have different timing to renew their contracts due to their military service. Super Junior established SJ Labels, a separate company, in 2015 and is operating separately. They reportedly renewed their contracts last year. Given that EXO Kai is releasing a solo album next month following SHINee Key and Onew, it is estimated that he will continue his activities after renewing his contract. In the end, except for Espa, the youngest who debuted in 2020, all of them have passed the renewal period or are close. There is a possibility that singers who are about to renew their contracts will move to new agencies in protest of Hive, the acquisition company. In fact, some SM singers have already contacted the agency.

An official from the entertainment industry said, "There is no clear reason for idols to remain in SM in the future, and they are likely to find small and medium-sized agencies that are advantageous in terms of individual activities and profit distribution."

On the other hand, some analysts say that the departure of artists is not a big problem. Park Da-gyeom, a researcher at Hi Investment & Securities, said, "The main intellectual property rights (IP) that feed SM are NCT and SPA, and if these two teams are secured, there is no big problem with corporate value at the moment, and the potential of new players to be introduced remains."

Even if it succeeds in acquiring Hive SM, it cannot be considered as taking the record production system. Lee Soo-man, who has worked as a general producer for 26 years, has been banned from participating in the production anyway. It is also unlikely that current SM employees who oppose the acquisition of Hive will be transferred to Hive.

When the singer exits, the fan communication platform bubble becomes an empty shell. According to Dear U, which operates Bubble, it is usually operated on a short-term contract of two to three years for each artist. Your artist may not renew his contract at any time or may require better conditions.

The sure asset that Hive will get from acquiring SM is a number of IPs. SM has 1,801 trademarks in Korea and 966 overseas, a total of 2,767. In addition, it has a total of 33 patents/practical models, 33 designs, and 52 copyrights. It includes the artist's team name, logo, and album jacket design.

An official from the entertainment industry said, "Entertainment is not a company with special technology, but IP and human network are the only assets, so many artists have renewed their contracts for a long time thanks to their position as the No. 1 entertainment company, but now they are behind Hive and have fewer rookie debuts."

 

[the101]

I can't read Hangul or find any translations on the chart, but it definitely represents the contracts.

 

[Myth]

I'm not really surprised, but I am hoping for the best outcome....

 

[Deleted member 4423]

It's all speculation at the moment. Just have to wait and see, who knows what's going to happen.

I bet a lot of groups are having discussions right now and deciding what they want to do going forward.

 

[the101]

It's all speculation at the moment. Just have to wait and see, who knows what's going to happen.

I bet a lot of groups are having discussions right now and deciding what they want to do going forward.

Indeed. It's interesting because I had expected most to renew - people complain but many artists do resign with SM and there is power and $ in the company from an artist's perspective - your solo will get more $$ put to it there. (There's more creative freedoms at smaller labels, but as we see from other soloists, fewer promotions and connections too.) Many of the same questions remain but now compounded - where would they go? The only one of the Big 4 that has shown an interest in signing other people's groups is the one trying to buy them. The advantage they all have is actually in some of SM's mismanagement - all of these groups have tremendously loyal and motivated fanbases that have shown they can mobilize to support the artist when the company doesn't.

 

[the101]

ah..have the translation..nothing here we don't already know in this chart.

I think is TVXQ (translation is squirelly on this one only, where all the other names read pretty close to their name, so that's my guess): enlisted in 2015, re-contract in 2018

Super Junior: in 2015, the recontract and sub-label were estalished. 2022 re-contract

Girls Generation; 2014-2017-2020 recontract. Tiffany, Seohyun and Sooyoung contract ends.

EXO: 2018 miltary enlistment begins. Xiumin, DO, Suho, Chen, Chanyeol, Baekhyun complete. (edited)

Shinee: 2018 militarry starts, Key, Minho, Onew complete, Taemin completes this year.

Red Velvet: 2021 re-contract.

NCT: this year, some members recontract and military enistment.

aespa: 2020 debut

NCT Tokyo (tentative name): coming this year.

 

[Abeamus]

Indeed. It's interesting because I had expected most to renew - people complain but many artists do resign with SM and there is power and $ in the company from an artist's perspective - your solo will get more $$ put to it there. (There's more creative freedoms at smaller labels, but as we see from other soloists, fewer promotions and connections too.) Many of the same questions remain but now compounded - where would they go? The only one of the Big 4 that has shown an interest in signing other people's groups is the one trying to buy them. The advantage they all have is actually in some of SM's mismanagement - all of these groups have tremendously loyal and motivated fanbases that have shown they can mobilize to support the artist when the company doesn't.

Hybe doesn't sign artists for the artists themselves as they've even messed with Seventeen which if Hybe will mess with Seventeen they'll definitely mess with anyone.

Also if this article is true Hybe being worried about another corporation messing with SM is the funniest when Hybe is becoming known for interfering with companies.

 

[LoveYooShaSha]

Hybe doesn't sign artists for the artists themselves as they've even messed with Seventeen which if Hybe will mess with Seventeen they'll definitely mess with anyone.

Also if this article is true Hybe being worried about another corporation messing with SM is the funniest when Hybe is becoming known for interfering with companies.

Kakao(if they're same/affiliated with Kakao M) n hive arent (very much or not at all) different tho, both want to conquer/eat up korean music as much as possible-just different methods, i think.

Kakao M wants to control/monopolise as much distro/non creative sector(see kakao vs spotify chapter 1[?]) while hive prevents another bts from emerging from big 3/smaller agency(which is one explanation for svt) n throttling/dead-ing vlive/monopolising artist-to-fan-channels via weverse.

I only care abt aespa/SNSD/got the beat/Aseul/rv digging out of the rubble after Godzilla n Kong battle it out n the result emerges. Gfriend already went down in rubble from the prologue of SM+Kakao vs hive. Im not hopeful for SNSD/Got the beat/aseul in the fallout from next episode(s).

 

[Abeamus]

Kakao(if they're same/affiliated with Kakao M) n hive arent (very much or not at all) different tho, both want to conquer/eat up korean music as much as possible-just different methods, i think.

Kakao M wants to control/monopolise as much distro/non creative sector(see kakao vs spotify chapter 1[?]) while hive prevents another bts from emerging from big 3/smaller agency(which is one explanation for svt) n throttling/dead-ing vlive/monopolising artist-to-fan-channels via weverse.

I only care abt aespa/SNSD/got the beat/Aseul/rv digging out of the rubble after Godzilla n Kong battle it out n the result emerges. Gfriend already went down in rubble from the prologue of SM+Kakao vs hive. Im not hopeful for SNSD/Got the beat/aseul in the fallout from next episode(s).

It's not about which one wants a monopoly though as Koreas economy is basically built on monopolies so someone was always going to achieve this in Kpop eventually which while the best outcome would be SM just staying as it is that doesn't seem to be an option nor will it be.

Both Hybe and Kakao will likely change SMs identity and not be able to manage it so the big difference is solely what will happen to some SM artists under Hybe/Kakao and Hybe is more likely to just outright axe or throttle artists by reducing their quality although not to say Kakao doesn't have its own concerns but this is a situation of being stuck between a rock and a hard place.

 

[LoveYooShaSha]

It's not about which one wants a monopoly though as Koreas economy is basically built on monopolies so someone was always going to achieve this in Kpop eventually which while the best outcome would be SM just staying as it is that doesn't seem to be an option nor will it be.

Both Hybe and Kakao will likely change SMs identity and not be able to manage it so the big difference is solely what will happen to some SM artists under Hybe/Kakao and Hybe is more likely to just outright axe or throttle artists by reducing their quality although not to say Kakao doesn't have its own concerns but this is a situation of being stuck between a rock and a hard place.

My imperfect understanding is tat Kakao would build up SM so as to consolidate their own hold on distro(urging impelling/goading other smaller agencies to sign with em on Kakao's terms-based solely on my seeing their powerplay with spotify korea n not fully understanding how/why they came to such a quick understanding after 1 weekless spotify korea-i mean 1 mean of no/less access to kpop globally on spotify in 2021) whereas hive would just prevent challengers to their existing dominance-whether buying up pledis/soumu or creating Ador/newjeans,watever Kq/hybe japan(?)/other strategies to remain top of kpop bgs{ignoring history lesson tat beatles fade, abba left at a peak, U2 fade(-d?), REM faded, coldplay not at top rn, all boybands(western) faded or disbanded(then reunited?), gen 1 kpop faded, gen 2 kpop faded, exo tbd, every bg after aging to 30/28 nvr had cbs as before/rookies(i think of it not just cause enlistment, but aged out of teen fans who want closer age idols-see h.o.t. >> tvxq >> suju >> shinee >> exo >> nct >> 127/dream, inevitability of pop teen audience chooses who they like, n olds like me nvr understand-just by luck/chance i like aespa/ive/gidle/itzy rn)

 

[Abeamus]

My imperfect understanding is tat Kakao would build up SM so as to consolidate their own hold on distro(urging impelling/goading other smaller agencies to sign with em on Kakao's terms-based solely on my seeing their powerplay with spotify korea n not fully understanding how/why they came to such a quick understanding after 1 weekless spotify korea-i mean 1 mean of no/less access to kpop globally on spotify in 2021) whereas hive would just prevent challengers to their existing dominance-whether buying up pledis/soumu or creating Ador/newjeans,watever Kq/hybe japan(?)/other strategies to remain top of kpop bgs{ignoring history lesson tat beatles fade, abba left at a peak, U2 fade(-d?), REM faded, coldplay not at top rn, all boybands(western) faded or disbanded(then reunited?), gen 1 kpop faded, gen 2 kpop faded, exo tbd, every bg after aging to 30/28 nvr had cbs as before/rookies(i think of it not just cause enlistment, but aged out of teen fans who want closer age idols-see h.o.t. >> tvxq >> suju >> shinee >> exo >> nct >> 127/dream, inevitability of pop teen audience chooses who they like, n olds like me nvr understand-just by luck/chance i like aespa/ive/gidle/itzy rn)

Hybe is clearly after a monopoly hence debuting so many groups in a short period of time to increase the value of the company and Pledis and Source Music acquisitions were a part of that and so will absorbing SM be.

Hybe has already shown an interest in SMs resources when they picked up Min Heejin and made her in charge of another girl group for them which New Jeans are now one of the top 3 girl groups so why wouldn't they want even more of SMs resources with how successful New Jeans is?

Not to mention like this article has mentioned SM has a lot of trademarks which Hybe has also shown interest in acquiring trademarks so that'd be another reason to grab SM and bolster their value.

Hybe is doing it for the money and to have a tight hold on the industry as much as Kakao is so there's no good option here and whether it's Kakao or Hybe a big corporation controlling most of Kpop will be the future.

 

[Selfmate]

interesting

 

[the101]

While neither option is great, I still go back to the point that they're buying this label because these artists are lucrative. They're having a knife fight in a back alley for access to SM, so it would not make sense to fundamentally change the sound of these groups that make so much money. I don't think Kakao or Hybe are that stupid. Nobody is buying the 2 million albums from NCT 127 because they want to hear a song that sounds like a soft kids bop song. And Kakao/Hybe very much want people to buy those 2 million albums.

Hybe rushed to snap everything up and debut groups quickly because they were entirely reliant on one group. I'm impressed they were able to make a dent in some of the reliance on BTS but they still have a way to go and still several enlistments pending of the most popular members. ShineeEXONCT will not replace BTS, but they do diversify the portfolio - particularly critical with their absence.

I'm not a Seventeen fan but there does not seem to be a big change in their music - it still seems very much feel-good pop like it always has. (The lightstick thing is terrible tho.) And although SM does have some frequent collaborators outside of their in-house writers and producers, many of those have also worked with Hybe and other groups. So, Dem Jointz, for example, can still keep doing 127 and Moonshine can still keep doing Dream.

I still think the pinch will be on older groups and soloists that aren't Baekhyun or Taeyeon. I would assume most of those artists negotiated solos when they renewed their contracts, but there's no guarantee they'll get a budget or promos for it, tbh.