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[Editorial] Time for a facelift of the K-pop business

Published: 13 Feb. 2023, 19:48

The K-pop landscape is faced with a seismic transformation. Last week, HYBE, the label behind global superstar BTS, disclosed that it will buy a 14.8 percent stake in SM Entertainment held by its founder Lee Soo-man. The announcement came a few days after chat-based platform giant Kakao announced a plan to acquire a 9.05 percent stake with the backing of the current SM managers. HYBE has offered to buy up to a 25 percent stake in the open market until March 1 to cement its largest shareholder position in SM Entertainment.

Once the acquisition is completed as planned, a K-pop behemoth representing current and rising K-pop idols — such as BTS, NCT, Tomorrow X Together, NewJeans, Exo, aespa — will be born. Foreign media speculated it could be as big as the traditional music label majors Sony, Universal and Warner Music.

The consolidation goes far beyond the power struggle between the founder and incumbent management of SM and beyond its alliance of the entertainment and platform businesses. It can provide an impetus for the sustainability of K-pop and its global competitiveness.

The feud in SM was triggered by founder Lee and in-house favoritism of his own producing company Like Planning that collected up to 35 percent of SM’s operating profit from 2000. The shady management system has long been a problem for the K-pop industry. While artists ascended to global stardom, the label was chained to one-man rule.

Predatory contracts with artists also have been a long-standing issue. Although the servitude system has improved, unfair practices continue. Recently, 11-member girl group Loona was found to have signed a contract that sees them shoulder half of the producing cost while receiving just 30 percent of the revenue. Lee Seung-gi was reported to have not gotten a cent from record sales over the past 18 years of his singing career.

The rigorous grooming system of teenagers or minors by placing them in a kind of boot camp for years also has been contentious. BTS, who had been living under supervision for nine years, spoke of fatigue while announcing a break in June last year. Group leader RM sighed that the K-pop idol system worked mechanically to produce one after another without allowing them to mature as people. Jin even complained he had felt like a machine.

The rise of idol-concentrated music label behemoth could worsen the diversity of the Korean popular music. It must remember the fall of Hong Kong cinema due to over-concentration of the action genre. To enlarge the synergy of the marriage of SM and HYBE, the K-pop industry must undo its outdated ways and work towards setting innovative standards.