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Hybe boss sets out vision for SM alliance

By | Published on Thursday 23 February 2023


The boss of K-pop powerhouse Hybe has confirmed that his company’s purchase of a 14.8% stake in rival Korean music firm SM Entertainment has been finalised, reassuring SM’s shareholders, employees and artists – and fans of those artists – that the alliance of Hybe and SM is a wonderful lovely thing to be celebrated.

That’s despite recent statements from the management at SM that Hybe is mounting a hostile takeover of its rival which will disadvantage SM’s artists and create competition concerns within the South Korean music market. Not only that, they said, it will also hinder plans by SM management to reinvigorate their company, in part via a partnership with Korean internet firm Kakao, and by implementing a strategy they call SM 3.0.

Hybe is buying its shares in SM from the latter’s founder Lee Soo-man, who doesn’t get on with the management team at the company he founded, and who has been trying to block the Kakao partnership through the courts. In addition to the 14.8% of SM it has already bought, Hybe has let it be known that it is interested in buying more shares in its rival in order to get itself a 40% controlling stake in the business.

Confirming that its initial SM share purchase is now completed, Hybe CEO Park Ji-won said in an open letter yesterday that it had “resolved the governance issue between former Chief Producer Lee and SM during the course of the share acquisition. SM will be moving to become a company with a transparent governance structure that prioritises shareholder value”.

He then set out to explain why the Hybe/SM alliance is all super fine. “As leaders and pioneers of the K-pop industry, both Hybe and SM have been triumphing on the global stage. Hybe’s vision to become a leading global entertainment lifestyle platform company under its mission ‘we believe in music’ is closely interconnected with the goal of SM 3.0 to ‘leap forward as a fan- and shareholder-centered global entertainment company’”.

Hybe has always allowed the different labels within its group to operate autonomously, he then insisted, and that will be the same for SM. “Leveraging our expertise and global network, Hybe will actively support SM artists’ endeavours in making a presence in the global music industry. Both companies will work together towards establishing the global ground where our artists can introduce their music”.

“We can share our experiences that have ultimately led us to our leading position in the global K-pop scene”, he added, “including the United States, South America and India. Hybe will also be able to benefit from SM’s wealth of experience from their artists’ success in China, Japan and Southeast Asia. With our collaborative effort, we can become the most innovative game changer in the global music industry”.

Acknowledging the concerns of SM employees and artists created by all the rumours and speculation that has circulated since Hybe’s bid to control its rival became public knowledge, Park insisted that claims by SM management that the company’s artists would be disadvantaged by all this are simply not true.

“We respect SM’s artists as much as we do our artists at Hybe”, he wrote. “Leveraging the expertise we have accumulated, we will do our best to create a brighter future for all artists under SM”.

And the direct-to-fan operations of both Hybe and SM can complement each other too, while also competing, Park reckoned. “Two leading fandom platforms, Hybe’s Weverse and SM’s Bubble, will expand beyond Korea and compete in the global arena”.

Hybe and SM should now work together so that they can “stand shoulder-to-shoulder with the world’s major record labels”, he concluded, before adding: “I hope the management can come to a wise and reasonable conclusion to ensure that our shared visions and business directions are on the right track”.