The Economics of Okay-pop – half 12: Music Streaming Providers in South Korea – Music Enterprise Analysis

The Economics of Okay-pop – half 12: Music Streaming Providers in South Korea – Music Enterprise Analysis

by | Jul 20, 2026 | Entertainment Law, Music Business, Podcast News


The worldwide success of Okay-pop wouldn’t be potential with no robust home music market. Sooner than in different nations, highly effective home music streaming providers have been in a position to set up themselves in South Korea, working intently with Okay-pop corporations and even being financially managed by them. Nevertheless, as we noticed partly 2 of this collection, international streaming providers – led by YouTube Music and Spotify – have managed to determine themselves within the South Korean market in recent times. To conclude this weblog collection on the economics of Okay-pop, we due to this fact need to take a better take a look at the 5 most necessary music streaming providers in South Korea.

The Economics of Okay-pop – half 12: Music Streaming Providers in South Korea

MelOn

The longtime market chief within the South Korean music streaming market was MelOn, a reputation derived from Melody On. MelOn was launched on 16 November 2004 by the Korean cell community operator SK Telecom as an all-you-can-eat MP3 obtain portal for KRW 3,000 to five,000 per thirty days. MelOn was an immediate success and, only one month after its launch, was already attracting a mean of 10,000 customers per day.[1]

In 2005, SK Telecom acquired a 43.3 per cent stake in YBM Seoul Information for the equal of US $12.6 million.[2] Seoul Information was based in 1978 by Min Yeong-bin as a file label and artist administration company, working as a subsidiary of Sisa English, a producer of language studying cassettes, and was renamed YBM Seoul Information in 2000.[3] In 2008, YBM Seoul Information was renamed LOEN Leisure.[4] A 12 months later, the music distribution platform MelOn was additionally built-in into LOEN.[5]

This label and company conglomerate, which was additionally listed on the Seoul Inventory Alternate, caught the eye of one in every of Asia’s largest non-public fairness companies, Affinity Fairness Companions, which acquired a 52.56 per cent stake in LOEN in July 2013 by its Hong Kong subsidiary Star Make investments, thereby decreasing SK Telecom’s stake in LOEN to fifteen per cent.[6] In December of that very same 12 months, Star Make investments additionally acquired the 8.83 per cent stake that RealNetworks held in LOEN, thereby growing Star Make investments’s stake in LOEN to greater than 60 per cent.[7] With monetary backing from Star Make investments, LOEN was in a position to purchase a 70 per cent stake within the Okay-pop group Starship Leisure in December 2013.[8]

The massive coup, nevertheless, was the takeover of LOEN by Kakao Company in January 2016 for the equal of US $1.64 billion.[9] Consequently, LOEN grew to become a part of one in every of South Korea’s largest web and leisure teams. Kakao has its roots within the web messenger KakaoTalk, which was launched in 2006 by Kim Bum-soo.[10] This grew into a bunch that now contains, amongst others, an internet fee service (Kakao Pay), an web financial institution (Kakao Financial institution), a video games developer (Kakao Video games) and a taxi service (Kakao Mobility).[11]

One in all Kakao’s largest enterprise divisions was LOEN, which was renamed Kakao M in 2018, with “M” standing for MelOn, music and media[12] and thus referred to the three divisions of the corporate: (1) the MelOn music streaming service, (2) the Music Content material Firm, comprising the labels acquired by LOEN through the years, the ticketing platform MelOn Ticket and the Okay-pop company 1theK, and (3) the Video Content material Firm.[13] Nevertheless, in March 2021, the corporate construction was modified as soon as once more when Kakao M merged with the digital content material platform Kakao Web page, which permits customers to create their very own movies, audio recordsdata and fictional texts.[14] A part of the merger additionally concerned the combination of MelOn into the brand new firm, Kakao Leisure, which now combines music manufacturing and rights administration with MelOn’s music distribution. On the time of the merger, MelOn had 33 million lively customers and 5 million paying subscribers.[15] As we now have already seen, this made MelOn the biggest music streaming service in South Korea.

Nevertheless, this modified with elevated competitors from overseas. Shortly after Spotify’s market entry on 1 February 2021, the primary showdown befell. Spotify eliminated all Okay-pop tracks from Kakao Leisure’s (then nonetheless referred to as Kakao M) catalogue from its platform worldwide, as the 2 events have been unable to achieve an settlement on a licensing deal. The boycott was, nevertheless, short-lived, as Kakao and Spotify reached a licensing deal as early as March 2021, bringing the Okay-pop repertoire again to Spotify.[16]

One may dismiss the battle as a storm in a teacup have been it not for the truth that it highlights the weak place of Korean streaming providers in relation to the worldwide market leaders. MelOn and its rivals owe their success primarily to Okay-pop, however they have been unable to compete with the worldwide repertoire important for a profitable music streaming service for a very long time.

Genie Music

Genie Music, with 2.57 million lively customers per thirty days, is South Korea’s second-largest home music streaming service. Genie has its roots within the music division of Bluecord Know-how, a Korean tech agency based as early as 1991 that has additionally diversified into the leisure and media sectors.[17] Initially, Genie Music’s predecessor was concerned in music manufacturing and file distribution in South Korea. In 2000, it additionally acquired a serious music publishing firm by the takeover of Doremi Media Co. Within the mid-2000s, Muz.co.kr – the nation’s main music obtain platform – was launched,[18] which was to turn into the nucleus of the Genie Music streaming service.

In 2007, KT Freetel Co., one in every of South Korea’s largest telecommunications corporations, acquired a 35.28 per cent stake in Bluecord Know-how and spun off the music division as an impartial firm beneath the title KTF Music. In 2009, KT Company and KTF merged to type KT Music.[19]

In 2012, KT Music acquired KMP Holdings, Korea’s largest music distributor, which marketed the productions of Okay-pop giants SM Leisure, YG Leisure and JYP Leisure.[20] This led to the combination of digital music operations with bodily music gross sales, which triggered a pointy surge in development due to the booming Okay-pop business.

In March 2017, LG U+, South Korea’s third-largest telecommunications firm, acquired a 15 per cent stake in KT Music, which was subsequently renamed Genie Music.[21] By means of this strategic partnership, the Genie Music app has been bundled with additional cell and broadband providers. Moreover, Genie Music has been efficiently built-in into the infotainment methods of the South Korean automobile producers Kia and Hyundai,[22] which additional expanded the person base.

In October 2018, Genie Music merged with CJ Digital Music, a subsidiary of the South Korean leisure and media conglomerate CJ ENM, which thereby acquired a 15.35 per cent stake within the new firm.[23] In April 2025, following an inner restructuring, it was renamed KT Genie Music Company. KT Genie Music Company is a publicly listed music group that owns quite a few music catalogues, is lively in music manufacturing and distribution, and operates a serious music streaming service.[24] Nevertheless, regardless of partnerships with Tidal, Anghami, Tencent Music, Huawei Music and TikTok, Genie Music failed to realize a foothold internationally.[25] Additional, the Okay-pop enterprise remained Genie Music’s principal income, which restricted its development potential and resulted in a decline in market share in South Korea.

FLO

The music streaming service FLO, which is owned by the Seoul-based Dreamus Firm, is dealing with related issues. Dreamus Firm has its roots in ReignCom, which was based in 1999 by Yang Deok-joon and 6 different former Samsung engineers to fabricate a transportable CD participant able to storing MP3 music recordsdata.[26] The primary gadgets have been launched in November 2000 and proved such a success that the Korean tech start-up additionally attracted consideration from overseas. ReignCom due to this fact entered right into a partnership with SonicBlue, an organization primarily based in Santa Clara, California, which had beforehand launched the Rio MP3 participant on the US market beneath the title Diamond Multimedia. ReignCom then started manufacturing transportable CD gamers with built-in MP3 gamers for the American market as properly, which have been bought beneath the Rio model.[27]

Nevertheless, SonicBlue went into administration in 2002, leaving ReignCom with no distribution accomplice within the US as a result of the Finest Purchase chain refused to promote a South Korean no-name product with out the Rio model. In June 2002, following protracted negotiations, Finest Purchase lastly agreed to inventory ReignCom merchandise within the US, supplied the corporate might develop an MP3 participant geared up with a high-capacity flash reminiscence stick by September of that 12 months. Yang Deok-joon and his group rose to the problem and, in August 2002, offered Finest Purchase executives with a tool able to storing no less than 30 songs. This was a technical breakthrough, and ReignCom emerged as the primary challenger to Apple’s iPod, securing a 20 per cent market share within the US.[28] In South Korea, ReignCom was already the market chief in MP3 gamers and was in a position to checklist on the Seoul Inventory Alternate in 2003.[29]

Nevertheless, the optimism at ReignCom quickly evaporated. Losses had already been reported for the 2005 and 2006 monetary years, which had a detrimental affect on the share worth. On this already troublesome financial local weather, the information of Apple’s launch of the iPhone in the summertime of 2007 got here as a crushing blow. Actually in a single day, the marketplace for MP3 gamers had turn into out of date. The iPhone started to cannibalise the MP3 participant market. For 2009, ReignCom reported an working lack of KRW 23.9 billion (US$21 million). In response, ReignCom’s total administration group was changed and the corporate was restructured as iRiver Ltd. as a way to embark on a strategic recent begin.[30]

Nevertheless, this didn’t succeed. The brand new e-book readers and e-dictionaries bought poorly, and a smartphone and a pill – supposed as rivals to Apple’s equivalents – by no means made it to market.[31] Consequently, iRiver’s share worth plummeted by nearly 65 per cent between 2010 and 2012.[32] This stoop made traders nervous, and rumours of a takeover quickly started to accentuate. In June 2014, the second lastly arrived. SK Telecom, South Korea’s largest telecommunications group, bought a block of shares value KRW 29.5 billion from iRiver’s largest shareholder, Vogo-Rio Funding Holdings, and have become the principle shareholder with a stake of round 40 per cent.[33] Following its takeover by SK Telecom, iRiver underwent a elementary restructuring. The main target shifted from music {hardware} to music content material. Consequently, in January 2015, Music Mate – a music streaming service initially supposed as a radio streaming service for cell gadgets – was launched.[34] That modified in July 2017 when SM Leisure, one of many largest Okay-pop conglomerates, grew to become iRiver’s second-largest shareholder.[35] SM Leisure recognised the potential of the streaming platform, and so forth 31 January 2018, a deal was struck between SK Telecom on the one hand and the three Okay-pop corporations – SM Leisure, JYP Leisure and Large Hit Leisure – on the opposite, to create a B2B and B2C music service platform by which the three corporations might distribute their music content material.[36] To this finish, Music Mate was utterly revamped and launched on 11 December 2018 beneath the brand new model title FLO.[37]

Subsequently, iRiver was reorganised into Dreamus Firm, which now comprised two enterprise models: the music streaming service FLO and iRiver’s high-end audio participant division.[38] The following restructuring befell in 2021, after SK Telecom had transferred all its non-telecoms investments to SK Sq. Funding. This additionally affected Dreamus Firm, with its streaming service FLO, which now grew to become a part of SK Sq..[39] It was to turn into obvious that this was merely an interim step and that, following sustained losses within the audio participant division, Dreamus bought this division to Miwang Firm for KRW 5 billion in December 2024,[40] to place itself as a pure music service platform for Okay-pop. This marked the symbolic conclusion to an extended historical past during which a market chief in MP3 gamers, beneath the management of a telecommunications group, had advanced right into a music streaming service focusing totally on Okay-pop.

Bugs Music and Naver VIBE

Alongside MelOn, Genie Music and FLO, the music streaming providers Bugs Music and Naver VIBE additionally play a major position within the South Korean streaming market. Bugs Music is the nation’s oldest music streaming service and was based in Seoul in November 1999 by Park Sung-hoon beneath the title Tremendous Sound Bugs.[41] To avoid the copyright points related to a music obtain platform, Bugs was arrange as a music streaming platform, however with out coming into into any licensing agreements with the rights holders.[42]

With 16 million registered customers, Bugs rapidly grew to turn into the nation’s largest music platform and secured KRW 1.5 billion in enterprise capital to fund its enlargement.[43] Nevertheless, South Korean music labels prevented this enlargement from going forward. In February 2003, 32 labels filed a lawsuit in opposition to Bugs Music for copyright infringement.[44]

In August 2004, Bugs Music tried to calm the state of affairs by signing a licensing take care of the Korean IFPI (Recording Business Affiliation of Korea, RIAK), which allowed the streaming service to stream 58,000 songs by way of the platform. Nevertheless, this was solely a fraction of the 270,000 recordsdata that Bugs Music had made accessible for streaming, which additionally originated from smaller indie labels. The South Korean music majors – Warner Music Korea, Sony Music Korea, SM Leisure, Yedang Leisure and YBM Seoul Information – opposed the settlement and maintained their authorized motion in opposition to Bugs Music and its founder.[45]

In January 2005, the showdown befell at a district courtroom in Seoul. The main labels prevailed, and the courtroom discovered Bugs Music and its founder responsible of mass copyright infringement. Park Sung-hoon was sentenced to 18 months’ imprisonment and ordered to pay damages of KRW 20 million (US$19,900).[46] In the long run, Park Sung-hoon bought off evenly, however in March 2005 he was pressured to step down as managing director of Bugs and promote his 60 per cent stake within the firm to a South Korean label consortium led by Yedang Information.[47]

In December 2008, Bugs Music was acquired by Neowiz Web Corp., a subsidiary of South Korea’s largest video games developer, Neowiz Company, with a view to merging it with the music obtain platform JukeOn – which had been in operation since April 2004 – and persevering with to function it beneath the Bugs model.[48] Underneath Neowiz’s management, Bugs Music rose to turn into South Korea’s second-largest music streaming supplier and attracted the curiosity of NHN Company, which had been based in 1999 as a video games developer beneath the title Hangame and merged in July 2000 with Naver, South Korea’s largest search engine – South Korea’s Google.[49] In August 2015, NHN Corp. acquired Neowiz Web, together with Bugs Music, with a view to persevering with the brand new division as NHN Bugs.[50]

With the backing of its new proprietor, Bugs was in a position to press forward with its enlargement. In August 2016, it acquired a 53.9 per cent stake within the South Korean music streaming service Groovers and, a month later, secured 70 per cent of the shares within the administration company HOW Leisure, which had Okay-pop star Hwang Chi-yeol beneath contract, amongst others.[51] Consequently, Bugs Music shifted its focus from the B2C to the B2B music enterprise and misplaced market share within the South Korean streaming market within the years that adopted.

Nevertheless, competitors additionally got here from throughout the group itself. Since 2009, Naver.com had been working the music service Naver Music, which had initially been launched as a obtain portal. In 2017, Naver Music entered right into a strategic partnership with YG Plus, a subsidiary of the Okay-pop group YG Leisure, to distribute Okay-pop songs.[52] Nevertheless, Naver Music was by no means in a position to meet up with the market chief, MelOn, and so in 2020 the mum or dad firm merged its music service with VIBE, an AI-based music streaming service.[53] That marked the top of Naver’s music obtain enterprise, and from then on the web group centered completely on music streaming.[54]

As we now have already seen, Naver.com is a part of NHN Holdings, that means that two music streaming providers now function beneath the NHN umbrella: Naver VIBE and Bugs Music. Nevertheless, each streaming platforms play solely a minor position within the South Korean music streaming market. This most likely additionally explains Naver.com’s announcement in November 2025 that it could be incorporating Spotify’s Premium service into the Naver Plus Membership programme, as a way to grant subscribers entry to Spotify’s huge music catalogue.[55] This marks the beginning of a partnership by which Spotify might additional strengthen its place within the Korean market, while on the identical time posing a problem to NHN/Naver’s music streaming providers.

An evaluation of South Korean music streaming providers reveals, on the one hand, their shut hyperlinks to the telecommunications and web sectors and, on the opposite, their interdependence with Okay-pop conglomerates. The rise of MelOn, Genie Music and FLO to turn into the nation’s main music streaming providers is due, firstly, to the bundling of those providers with cell phone contracts supplied by main telecoms equivalent to SK Telecom and KT Freetel Firm, and secondly, to their collaboration with Okay-pop corporations. MelOn even owns a Okay-pop company itself – Starship Leisure – and is a subsidiary of Kakao Company, which in flip is firmly rooted within the Okay-pop enterprise. Genie Music has shut ties to the so-called ‘Large Three’ of the Okay-pop business: SM, YP and JYP Leisure. SM Leisure additionally holds a stake within the music streaming service FLO. Lastly, it’s value mentioning the streaming service Naver VIBE, which was launched in cooperation with a subsidiary of the Okay-pop firm YP Leisure.

This shut hyperlink to the Okay-pop business is each a blessing and a burden for South Korean music streaming providers. They’ve been in a position to develop quickly due to the worldwide Okay-pop growth, however are additionally depending on the success of this music style. South Korean streaming platforms have failed to realize a sustainable foothold internationally and now face stiff competitors from international rivals equivalent to YouTube and Spotify, which have managed to seize market share in South Korea in a really brief house of time. YouTube has even risen to turn into the nation’s main music streaming service. As makes an attempt to fend off this competitors have thus far failed, South Korean music streaming platforms are actually in search of to collaborate with their international rivals, though this carries the danger of being dominated by them.

Endnotes

[1] Yang, Hyung-wook. 2004. SK’s MP3 music portal exhibits indicators of being a smash hit. Monetary Information, 14 December. https://n.information.naver.com/article/014/0000153995. Translated with DeepL. Accessed 26 Jun 2026

[2] Billboard. 2005. Korean Telco Takes Management Of Seoul Information. 27 Might. https://www.billboard.com/music/music-news/korean-telco-takes-control-of-seoul-records-1411719/. Accessed 26 Jun 2026

[3] YBM. 2013. 1978: Founding of Seoul Information. YMB Homepage, 28 December. http://www.ybm.co.kr/sisa/photograph.aspx?seq=14&Web page=1. Accessed 26 Jun 2026

[4] Naver. 2018. Kakao M Co., Ltd. Naver Organisation Dictionary, 22 October 2018. https://net.archive.org/net/20210520050332/https://phrases.naver.com/entry.naver?docId=651823&cell=&cid=43167&categoryId=43167. Accessed 26 Jun 2026

[5] Ibid.

[6] Han, Woo-ram. 2026. Affinity Fairness Companions hit the jackpot with Kakao-Loen deal. Mail Financial Day by day, 13 January. https://n.information.naver.com/article/009/0003663386?sid=004. Accessed 26 Jun 2026

[7] Lee, Jae-young. 2013. Affinity acquires a stake in Loen Leisure owned by Actual Networks. The Bell, 17  November. https://www.thebell.co.kr/free/content material/ArticleView.asp?key=201311070100009740000585&svccode=00&web page=1&kind=thebell_check_time. Translated with DeepL. Accessed 26 Jun 2026

[8] Lee, Solar-min. 2013. Loen acquires massive stake in Starship. Korea JoonAng Day by day, 19 December. https://koreajoongangdaily.joins.com/information/article/article.aspx?assist=2982315. Accessed 26 Jun 2026

[9] Lee, Se-young. 2016. Kakao to purchase South Korea’s prime music streaming operator for $1.6 billion. Reuters, 11 January. https://www.reuters.com/article/us-kakao-m-a-loen-ent-idUSKCN0UP01620160112/. Accessed 26 Jun 2026

[10] Kim, Nam Kyu. 2010. iWylab launches ‘KakaoTalk’, a messenger app for iPhone. Financial system At this time, 18 March. http://www.eto.co.kr/information/outview.asp?Code=20100318145504490&ts=233011. Accessed 26 Jun 2026

[11] Kakao. n.d. About. https://www.kakaocorp.com/web page/about/subsidiaryCompany. Accessed 26 Jun 2026

[12] Power Financial system. 2017. Loen will change its title to KakaoM. 26 December. https://www.ekn.kr/net/view.php?key=332761. Accessed 26 Jun 2026

[13] Han, Susan. 2018. Kakao M, previously Loen Leisure, reveals new company id + appoints new CEO. Allkpop, 23 March. https://www.allkpop.com/article/2018/03/kakao-m-formerly-loen-entertainment-reveals-new-corporate-identity-appoints-new-ceo. Accessed 26 Jun 2026

[14] Joara, Hankyung. 2021. Kakao Enterprises formally launched with ‘One trillion in gross sales’. The Korea Financial Day by day, 4 March. https://www.hankyung.com/article/202103048042g. Translated with DeepL. Accessed 26 Jun 2026

[15] Kakao Leisure. 2021. Kakao Leisure merges with Korea’s No. 1 music streaming platform Melon because it eyes international development. Press launch, 1 September. https://newsroom.kakaoent.com/information/kakao-entertainment-merges-with-koreas-no-1-music-streaming-platform-melon-as-it-eyes-global-growth/. Accessed 26 Jun 2026

[16] Stassen, Murray. 2021. Spotify reinstates Okay-Pop tracks from Kakao Leisure as corporations attain international licensing deal. Music Enterprise Worldwide, 11 March. https://www.musicbusinessworldwide.com/spotify-reinstates-k-pop-tracks-from-kakao-entertainment-as-companies-reach-global-licensing-deal/. Accessed 26 Jun 2026

[17] Grokipedia. n.d. Genie Music. https://grokipedia.com/web page/Genie_Music. Accessed 26 Jun 2026

[18] Ibid.

[19] Ibid.

[20] Ibid.

[21] Ibid.

[22] Ibid.

[23] Ibid.

[24] Ibid.

[25] Ibid.

[26] Grokipedia. n.d. iRiver. https://grokipedia.com/web page/IRiver. Accessed 26 Jun 2026

[27] Moon Ihlwan. 2004. Korea’s ReignCom: Shifting Up The MP3 Charts. Businessweek, 26 January. https://net.archive.org/net/20071015174000/http://businessweek.com/journal/content material/04_04/b3867071.htm. Accessed 26 Jun 2026

[28] Ibid.

[29] Korea JoonAng Day by day. 2003. 3 companies set for IPOs this week. 8 December. https://koreajoongangdaily.joins.com/2003/12/08/business/3-firms-set-for-IPOs-this-week/2069035.html. Accessed 26 Jun 2026

[30] Search engine optimisation, Ji-eun. 2012. After the smartphone, MP3 makers wrestle to outlive. Korea JoonAng Day by day, 29 March. https://koreajoongangdaily.joins.com/2012/03/29/business/After-the-smartphone-MP3-makers-struggle-to-survive/2950714.html. Accessed 26 Jun 2026

[31] Bäumer, Simon. 2011. Iriver plant zwei neue Androidgeräte: Ein Pill und ein Smartphone. PCMasters, 14 July. https://www.pcmasters.de/information/13373968-iriver-plant-zwei-neue-androidgeraete-ein-tablet-und-ein-smartphone.html#:~:textual content=Daspercent20geleaktepercent20Bildpercent20zeigtpercent20daspercent20geplantepercent20Androidsmartphonepercent2C,undpercent20aufpercent20einempercent203percent2C5percent20Zollpercent20Touchscreenpercent20basieren. Accessed 26 Jun 2026

[32] Search engine optimisation, Ji-eun. 2012. After the smartphone

[33] Kang, Yoon-seung. 2014. SK Telecom to amass Iriver for 29.5 bln gained. Yonhap Information, 25 June. https://en.yna.co.kr/view/AEN20140625005100320. Translated with DeepL. Accessed 26 Jun 2026

[34] NamuWiki. o.D. FLO. https://en.namu.wiki/w/FLO. Accessed 26 Jun 2026

[35] Kwon, Yong-min. 2017. SM Enters iRiver as 2nd Largest Shareholder in “World Content material Market”. Seoul Financial Day by day, 17 July. https://www.sedaily.com/NewsView/1OIIDB8KM5/GD0501. Translated with DeepL. Accessed 26 Jun 2026

[36] Kim, D. 2018. SM, JYP, And Large Hit To Launch Joint Music Enterprise. Soompi, 31 January. https://www.soompi.com/article/1117157wpp/sm-jyp-big-hit-launch-joint-music-enterprise. Accessed 26 Jun 2026

[37] Hankyung.com. 2021. ‘Previous iRiver’ deficit exonerated by SKT. The Korea Financial Day by day, 18 Might. https://www.hankyung.com/article/2021051866611. Accessed 26 Jun 2026

[38] Choi, Hyun-seok. 2019. iRiver modified its title to ‘Dreamers Firm’. Naver Information, 28 March. https://n.information.naver.com/article/001/0010726293. Translated with DeepL. Accessed 26 Jun 2026

[39] The Korea Herald. 2021. SK Telecom names new CEO following non-telecom spinoff. 1 November. https://www.koreaherald.com/article/2716859. Accessed 26 Jun 2026

[40] Lee, Jinhwi. 2024. DreamUsCompany, sells ‘iriver’ enterprise for five billion gained. High Day by day, 30 December. https://en.topdaily.kr/articles/4090. Accessed 26 Jun 2026

[41] Park, Hyun-jung. 2003. Park Sung-hoon, President of Bucks Music, “leaps to turn into the most effective portal in Korea in 2-3 years”. Naver Information, 24 April. https://n.information.naver.com/mnews/article/029/0000025349?sid=105. Translated with DeepL. Accessed 26 Jun 2026

[42] Ibid.

[43] Ibid.

[44] Billboard. 2005. Korean Labels Win Bugs Battle. 15 March. https://www.billboard.com/music/music-news/korean-labels-win-bugs-battle-1415784/. Accessed 26 Jun 2026

[45] Lee Kyong-hee. 2004. Music income swirling down digital drain. Korea JoonAng Day by day, 1 October. https://koreajoongangdaily.joins.com/2004/10/01/options/Music-profits-swirling-down-digital-drain/2475425.html. Accessed 26 Jun 2026

[46] Billboard. Korean Labels Win Bugs Battle.

[47] Ibid.

[48] Neowiz. n.d. Historical past. https://www.nwhcorp.com/holdings/en. Accessed 26 Jun 2026

[49] NHN Corp. n.d. We’re NHN, a World IT Firm Pioneering into The World Taking part in Discipline. https://www.nhn.com/en-US/firm?tab=about. Accessed 26 Jun 2026

[50] Ibid.

[51] Yoon Sung-won. 2016. Bugs increasing to leisure company biz. The Korea Instances, 31 August. https://www.koreatimes.co.kr/enterprise/tech-science/20160831/bugs-expanding-to-entertainment-agency-biz. Accessed 26 Jun 2026

[52] YG Plus. 2017. YG PLUS-NAVER collectively implements music enterprise venture. Press launch, 18 October. https://yg-life.com/archives/94413?lang=en. Accessed 26 Jun 2026

[53] Sportsseoul.com. 2020. Consuming Naver music sources, from buy to subscription… Finish of Naver Music. 3 October. https://www.sportsseoul.com/information/learn/963447. Translated with DeepL. Accessed 26 Jun 2026

[54] Since December 2014, Naver.com has been working the music streaming service Line Music by its Japanese subsidiary, Line Company. See: Russell, Jon. 2015. Messaging App Agency Line Is Testing A $2 Per Month Music Streaming Service. TechCrunch, 21 Might. https://techcrunch.com/2015/05/21/line-music/. Accessed 26 Jun 2026

[55] Korea YoonAng Day by day. 2025. Naver launches new music streaming program in partnership with Spotify. 28 November. https://koreajoongangdaily.joins.com/information/2025-11-28/enterprise/business/Naver-launches-new-music-streaming-program-in-partnership-with-Spotify/2465879. Accessed 26 Jun 2026

The Economics of Ok-pop-Half 11: The Darkish Facet of Ok-pop – Music Enterprise Analysis

The Economics of Ok-pop-Half 11: The Darkish Facet of Ok-pop – Music Enterprise Analysis

by | Jun 29, 2026 | Entertainment Law, Music Business, Podcast News


In my final weblog publish on the built-in advertising and marketing of Ok-pop, I took a primary have a look at the darkish aspect of Ok-pop by means of the “saesang” phenomenon. On this half, I’m going to take a more in-depth look not solely on the obsessive and dysfunctional fan tradition, but additionally on the inflexible and generally even brutal coaching and manufacturing system of Ok-Pop firms, which may contribute to the traumatisation of artists and will even result in suicide.

The Economics of Ok-pop-Half 11: The Darkish Facet of Ok-pop

The companies encourage the obsessive fan behaviour known as “saesang”. They produce residence tales and supply intensive backstage protection to create a very shut bond with followers. An idol’s picture is fastidiously deliberate and maintained. In doing so, Ok-pop companies train large management over their stars, overlaying each facet of their lives, together with their personal lives. There are strict dietary rules, accompanied by weekly weight checks. In some circumstances, artists have even been ordered to drop a few pounds.[1]

The artists’ total vary of communication, together with their private communications, can also be monitored. The social media presence of Ok-pop stars is strictly regulated and monitored to forestall harm to their picture. To this finish, trainees and Ok-pop stars alike usually have their smartphones taken away.[2] Relationships and socialising exterior the Ok-pop bubble are additionally unwelcome and are discouraged. The ‘no-dating guidelines’ made headlines; these have been imposed by nearly all Ok-pop companies on their trainees in addition to on artists who’ve made their breakthrough and are additionally laid down of their contracts. It emerged that, from 2015 onwards, JYP Leisure had imposed a three-year relationship ban within the contracts of all 9 members of the lady group Twice.[3]

The Case of Kiera Grace Madder alias KG

The abuses inside the Ok-pop trade often solely come to gentle when these affected start to combat again and take authorized motion. This was the case with Kiera Grace Madder, who, on the age of 15, was solid by JYP USA underneath the stage identify KG for the lady group VCHA. On the finish of 2024, the then-minor terminated her contract with JYP and made severe allegations towards the Ok-pop firm. The lawsuit was a damning one. In 16 counts, JYP was accused, amongst different issues, of exploiting little one labour, little one neglect and abuse, in addition to breach of contract and fraud.[4] Kiera Madder‘s courtroom affidavit painted a grim image of the Ok-pop trade:[5] the working situations have been inhumane. {The teenager} needed to practice arduous for greater than 60 hours per week, usually late into the evening. On the directions of a coach, she was made to repeat dance strikes lots of of instances and not using a break and was not allowed to drink. When she sustained an harm severe sufficient to require hospital remedy, she was nonetheless made to proceed coaching, regardless that she had been instructed to relaxation.[6] She and the opposite group members have been additionally pressured to observe a salad-only weight loss program to make sure they didn’t lose their “excellent weight”. They have been solely allowed to eat on the corporate’s premises underneath fixed supervision, and their physique weight was meticulously measured each month. Dancing exterior of classes was forbidden, and so they have been solely allowed to hearken to the label’s personal music. Though she lived within the US, she was required to at all times communicate Korean with the workers.[7]

She lived with the opposite group members within the so-called VCHA Home, a company-owned property in West Hollywood. The day was strictly scheduled across the clock, and from 9.00 pm there was a curfew, which was monitored by CCTV cameras. Nevertheless, cameras have been additionally put in within the kitchen, the residing space and even the bedrooms, recording all the things with out the residents’ data. Kiera Madden stated she felt as if she have been in jail. She needed to submit a request to be allowed to go to her mom, which was not at all times authorized.[8]

The tough coaching, the fixed stress to carry out and, above all, the poisonous residing situations underneath fixed controlling supervision have been traumatic for Kiera Madden, and because of this she developed psychological well being points. She was now not in a position to attend college and, like the opposite group members, suffered from consuming problems, which have been, nonetheless, dismissed by the workers as “regular”. She additionally witnessed acts of self-harm amongst her housemates and even a suicide try.[9]

On high of the psychological pressure got here a very insidious type of monetary blackmail. JYP knowledgeable Kiera Madden that she owed the corporate US $378,680 as of January 2024. By April 2024, the debt had allegedly risen to US $504,543. Nevertheless, it was utterly unclear how these figures had been calculated. When she lastly selected 19 Might 2024 to depart VCHA and JYP, the 16-year-old was dropped off at 3 am in the course of the evening at a lodge in West Hollywood, left with out safety or help. From JYP’s perspective, this had brought about the corporate large harm, for which it now threatened to take authorized motion.[10]

Nevertheless, the case didn’t go to courtroom as a result of the plaintiff reached an out-of-court settlement with JYP USA Inc. and VCHA. A second member additionally left the lady group, whose 4 remaining members continued their work with JYP underneath the brand new band identify GIRLSET.[11]

Longterm Contracts and Poor Remuneration

The case of KG, alias Kiera Madden, is much from an exception. Ever since SM Leisure established its trainee system, there have been repeated allegations of poor working situations and a pervasive tradition of bullying and sexual harassment.[12] There have additionally been repeated complaints about excessively lengthy contract phrases, poor remuneration and the duty to repay coaching prices. For example, three members of the boy band TVXQ sued their company, SM Leisure, looking for the early termination of their contracts. Of their lawsuit, they criticised the disproportionately lengthy contract time period of 13 years and an unfair profit-sharing association.[13] Though the boy band was probably the most profitable Ok-pop acts of the 2000s, every of the 5 band members obtained a income share equal to US $152,000 per 12 months.[14] For a median earner, that may look like some huge cash, however it’s modest for Ok-pop superstars. Regardless of a preliminary injunction issued by the Seoul Central District Court docket in favour of the three plaintiffs, the 2 remaining group members sided with SM Leisure in an open letter. A mudslinging battle of mutual accusations ensued.[15] Following a three-year authorized dispute, the events agreed to a mutual termination of their contractual relationship, which led to the break-up of the boy band in its authentic line-up.[16]

Anybody who thought that SM Leisure would have deserted excessively lengthy contract phrases following this authorized dispute was mistaken. When the boy band EXO was shaped in 2012, the group members have been as soon as once more given contracts with 13-year phrases. Nevertheless, this solely got here to gentle after three members of EXO introduced, by way of their attorneys, their intention to terminate their contracts early on 1 June 2023. The printed letter not solely criticised the lengthy period of the unique contracts, but additionally the truth that, upon contract renewal, the artists have been pressured into signing unique contracts with phrases of at the least 17 to 18 years or longer. The attorneys’ letter refers back to the TVXQ case, through which the courtroom and the Honest Commerce Fee dominated that contracts could also be for a most of seven years.[17] SM Leisure took a unique view and issued an in depth assertion of its personal, through which it deemed the lengthy contract time period to be in accordance with the legislation and suspected that the entire manoeuvre by the three EXO members was a part of a conspiracy by a rival Ok-pop company looking for to steal the artists away.[18] This case was not settled in courtroom both, as SM and the three EXO members ultimately agreed to increase their contracts.[19]

The circumstances described listed here are simply the tip of the iceberg and spotlight a structural drawback inside the Ok-pop manufacturing system. Ok-pop firms search to train full management over the worth chain, and this contains the inventive labour. Consequently, extraordinarily lengthy contracts are concluded and dealing situations are created through which the artists are topic to finish management. Defenders of this method usually argue that it’s culturally decided and corresponds to the Confucian work ethic. John Lie explicitly counters this and states: “[T]he ethos behind the celebrities’ impeccable public habits is much less Confucian than authorarian. Ok-pop stardom is hardly a charmed life. Its fragility might be gauged by the plethora of suicides amongst profitable performers.”[20]

Cyberbullying and Suicides

Certainly, the listing of Ok-pop stars who’ve taken their very own lives as a result of they have been damaged by this inflexible manufacturing system and the related cyberbullying is an extended one. For example, Jonghyun, a member of the boy band SHINee, died on the night of 18 December 2017 – his 28th birthday – in a Seoul hospital following a suicide try, having struggled with melancholy for years.[21] Additionally affected by melancholy, which was partly attributed to cyberbullying, the 24-year-old singer Sulli of the lady group f(x) hanged herself throughout the evening of 13–14 October 2019 at her residence in southern Seoul.[22] It has emerged that she had repeatedly requested her company, SM Leisure, to take motion towards the cyberbullying; nonetheless, in line with an unnamed consultant of the South Korean leisure trade, these measures weren’t stringent sufficient.[23] Shocked by the loss of life of her shut pal Sulli, 28-year-old singer Goo Hara of the lady group Kara additionally took her personal life on 24 November 2019. One contributing issue was undoubtedly her break-up together with her abusive associate, who had tried to blackmail her, however the hateful feedback on social media accusing her of immoral behaviour definitely performed an element as properly.[24]

Conclusion

The success of Ok-pop comes at a excessive worth. Though the Ok-pop manufacturing system encompasses A&R, songwriting, music manufacturing, advertising and marketing and distribution, and is carefully linked to the stay music trade, artists usually endure harsh working and residing situations that bear little resemblance to the glamorous lives of superstars. The contracts, that are usually signed when the artists are youngsters, are prolonged and troublesome to terminate. The trainee course of is extraordinarily aggressive and selective and it lasts for a few years. Even after they’ve made their breakthrough, artists are topic to fixed surveillance, which extends to their personal lives. Additionally they discover themselves on a treadmill of album releases and live performance performances. Penalties can embrace escapism, as evidenced by the Burning Solar scandal involving YG Leisure, or psychological well being points that may result in suicide. On this context, the Ok-pop enterprise just isn’t an instance of greatest follow for an rising music market. Nevertheless, there’s nonetheless a lot to be learnt from this case examine, offered one manages to keep away from the unfavourable elements of Ok-pop.

Endnotes

[1] Jeong, Lucy. 2020. Ok-pop trainee guidelines: no relationship, no telephones, weekly weight checks – Blackpink, Twice and BTS members reveal what Korea’s leisure companies actually demand of their idols. South China Morning Put up, 18 November. https://www.scmp.com/magazines/type/celeb/article/3110355/k-pop-trainee-rules-no-dating-no-phones-weekly-weight. Accessed 12 Jun 2026

[2] Ibid.

[3] Ko, Dong-hwan. 2018. Breaking: TWICE relationship ban lifted. The Korea Instances, 21 October. https://www.koreatimes.co.kr/leisure/k-pop/20181021/breaking-twice-dating-ban-lifted. Accessed 12 Jun 2026

[4] Ok.M., a minor, by and thru her guardian, a litem, Tracy Madder v. JYP USA Inc. Verified Criticism and Damages and Equitable Aid. Superior Court docket of the State of California for the County of Los Angeles. Case No. 24ST CV32165. 6 December 2024. https://trellis.legislation/doc/232416305/complaint-filed-by-k-m-plaintiff-as-to-jyp-usa-inc-defendant. Accessed 12 Jun 2026

[5] JYP USA Inc. v. Kiera Grace Madder, a minor. Declaration of respondent Kiera Grace Madder in help of her request for an order to put aside. Case No. 23ST FL05599. https://de.scribd.com/doc/860840799/KG-Declaration. Accessed 12 Jun 2026

[6] Ibid.

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] Kim, Jae-heun. 2025. JYP Leisure ends contract with KG, rebrands VCHA as Girlset. The Korea Herald, 8. August. https://www.koreaherald.com/article/10550039. Zugriff 16. Mär. 2026

[12] Atkin. Ok-Pop. pp 94-96.

[13] Lee, Hyo-won. 2009. TVXQ Feuds With SM Leisure. The Korea Instances, 2 August. https://www.koreatimes.co.kr/leisure/k-pop/20090802/tvxq-feuds-with-sm-entertainment. Accessed 12 Jun 2026

[14] Turner, Jasmine. 2023. Right here’s How Badly TVXQ Was Paid Throughout Their Peak With SM Leisure. Koreaboo, 1. Juni. https://www.koreaboo.com/tales/tvxq-legal-dispute-sm-entertainment-recap-payment-unfair/. Accessed 12 Jun 2026

[15] Kim, Hyung-woo. 2009. TVXQ’s Yunho and Changmin’s representatives: “Claims of an unfair contract are preposterous; we discover these false allegations regrettable”. Newsen, 2 November. https://www.newsen.com/news_view.php?uid=200911021558411002. Übersetzt mit DeepL. Accessed 12 Jun 2026

[16] Turner, Jasmine. Right here’s How Badly TVXQ Was Paid

[17] Soompi. 2023. Breaking: EXO’s Baekhyun, Xiumin, And Chen Notify SM Leisure Of Contract Termination. Assertion of the EXO attorneys, 1 June. https://www.soompi.com/article/1591081wpp/breaking-exos-baekhyun-xiumin-and-chen-notify-sm-entertainment-of-contract-termination. Accessed 12 Jun 2026

[18] SM Leisure’s full assertion might be discovered at Turner, Jasmine. Right here’s How Badly TVXQ Was Paid

[19] Shim, Solar-ah. 2023. 3 EXO members to stick with SM Leisure, resolving contract dispute. Yonhap Information, 19 June. https://en.yna.co.kr/view/AEN20230619004200315. Accessed 12 Jun 2026

[20] Lie. Ok-Pop. p 126

[21] The Korea Herald. 2017. SHINee’s Jonghyun dies in hospital. 18 December. https://net.archive.org/net/20171218122146/http://www.koreaherald.com/view.php?ud=20171218001047. Accessed 12 Jun 2026

[22] Im, Eun-byel. 2019. Singer and actor Sulli discovered useless. The Korea Herald, 14 October. https://www.koreaherald.com/article/2125408. Accessed 12 Jun 2026

[23] Busan Ilbo. 2019. “Sulli had repeatedly requested SM to deal with malicious feedback”. 15 October. https://www.busan.com/view/busan/view.php?code=2019101516142959202. Accessed 12 Jun 2026

[24] Wealthy, Motoko und John Yoon. 2024. A Ok-Pop Star’s Lonely Downward Spiral. The New York Instances, 28 February. https://net.archive.org/net/20240614033858/https://www.nytimes.com/2024/02/28/world/asia/k-pop-suicide-goo-hara.html. Accessed 12 Jun 2026

The Economics of Okay-pop – Half 9: The manufacturing system of Okay-pop – Music Enterprise Analysis

The Economics of Okay-pop – Half 9: The manufacturing system of Okay-pop – Music Enterprise Analysis

by | Jun 8, 2026 | Entertainment Law, Music Business, Podcast News


Okay-pop is not only a brand new music style, however a manufacturing system that, traditionally talking, is most similar to New York’s Tin Pan Alley within the late 19th century or the Brill Constructing pop of the Sixties. The Okay-pop manufacturing system is a collaborative value-creation community that features artist and repertoire (A&R), an intensive, long-term coaching programme, songwriting and music manufacturing, an built-in advertising mannequin, and fan engagement actions. On this a part of the weblog sequence, we are going to now analyse this manufacturing system intimately.

The Economics of Okay-pop – Half 9: The manufacturing system of Okay-pop

A&R: Expertise recruitment

The recruitment of recent expertise for the Okay-pop {industry} has given rise to a whole ecosystem wherein auditions and preparatory programs are frequently provided. Broadly talking, three completely different recruitment paths for Okay-pop artists might be recognized.[1]

  1. The 4 main Okay-pop businesses maintain auditions on a weekly or month-to-month foundation, not solely in South Korea but additionally in neighbouring Asian international locations and past. For instance, SM Leisure’s web site lists auditions working from January to March 2026 in all main cities in South Korea, in addition to in lots of Chinese language and Japanese cities, in Bangkok, Brisbane, Sydney, Los Angeles and New Jersey, and you may register right away through the web site.[2] Locations at auditions are extremely sought-after. In line with media studies, just one in a thousand candidates is invited to SM Leisure’s auditions. At smaller businesses, this ratio stands at one in 250 functions.[3]
  2.  Along with in-person auditions, JYP Leisure additionally presents on-line auditions on its web site, the place candidates can add their movies for analysis by a jury.[4] Hybe’s sub-label Supply Music additionally presents a web based audition platform the place movies might be uploaded.[5]
  3. Casting TV reveals are notably necessary in South Korea for locating new expertise. The nation’s main TV broadcasters, comparable to CJ ENM Leisure’s Mnet, have developed their very own TV codecs, comparable to “Celebrity Okay” or the rap contest “Present Me The Cash”, which function like auditions.[6] Moreover, survival casting reveals are being developed in collaboration with Okay-pop labels; as we’ve got already seen, these have produced celebrity acts such because the woman group Twice from the casting present “Sixteen” or Stray Children from the present of the identical title. These TV codecs have the benefit that the viewers is a part of the choice course of, thereby enabling fan loyalty to be established proper from the beginning.

The auditions are primarily aimed toward youngsters aged between 15 and 20, though in some instances youthful candidates are additionally admitted to the choice course of. The demand for a spot within the auditions is overwhelming. Because of this, a whole {industry} has emerged within the run-up to the auditions, devoted solely to making ready candidates for them. Non-public music academies and music faculties provide programs designed to coach college students for auditions. One instance is the personal singing college Sand Manufacturing unit Academy, which, along with vocal coaching, additionally presents different expertise required for a profitable audition course of. The Sand Manufacturing unit Academy collaborates with the “Massive Three” – SM, YG and JYP Leisure – in addition to with smaller businesses comparable to Starship Leisure.[7] Even the state-run Seoul Music Excessive Faculty presents programs with a concentrate on Okay-pop that put together college students for auditions.[8]

Artist coaching

If an applicant is profitable within the auditions, they then enter a coaching programme lasting a number of years, which might take as much as eight years.[9] The coaching facilities are like a well-organized army camp.[10] The trainees should not solely skilled in dance, singing and composition, but additionally obtain intensive instruction in varied languages, notably English, Mandarin and Japanese, in addition to coaching in etiquette and communication. The every day schedule is strictly organised. The trainees spend as much as 12 hours or much more every day in varied lessons – at a JYP coaching centre, this quantities to as much as 76 completely different topics[11] – and they also have little or no free time left. John Lie distinguishes between three various kinds of trainees.[12] The chunbisaeng might be described as preparatory college students and are often nonetheless so younger that they’re attending major college. For them, collaborating in coaching remains to be a form of leisure exercise. They type the inspiration for the yŏnsusaeng (practising college students), who’re already present process the total coaching programme to develop into Okay-pop stars, which might last as long as 5 years. They’re often nonetheless attending college and subsequently solely participate in coaching periods within the afternoons, which might final till late at evening. The yŏnsusaeng are subjected to in depth and really rigorous examinations no less than as soon as a month, that are a part of a range course of. Solely those that cross these examinations make it into the mission teams after three to 5 years, which serve to arrange them for an expert music profession. The members of those mission teams often dwell in shared lodging built-in into the corporate’s personal academies. They’re thus not solely subjected to a inflexible every day routine of classes and coaching, however are additionally continuously monitored, leaving them with nearly no privateness.[13]

In line with an govt at SM Leisure, solely 5 per cent of trainees make it into an expert inventive profession following this rigorous choice course of.[14] Nonetheless, there’s often one other hurdle within the type of inside survival casting reveals, that are broadcast on tv and, more and more, on-line – for instance, on YouTube – as we’ve got already seen with the formation of the assorted sub-groups of NCT at SM Leisure, or with the woman group Twice and the boy group Stray Children from JYP Leisure.

A Okay-pop star who has achieved a breakthrough has subsequently undergone a really lengthy and expensive coaching course of. SM Leisure is alleged to have invested round US $5 million within the profession of Okay-pop star BoA.[15] John Lie estimates that, on common, US $300,000 is spent per individual on constructing a single skilled Okay-pop star.[16] Nonetheless, the celebs first should recoup these immense prices. A examine commissioned by the South Korean authorities reveals {that a} Okay-pop artist earns a median of simply US $10,000 a 12 months.[17] Lie subsequently factors out critically {that a} life “of a Okay-pop star appears extra just like the lifetime of a low-wage international migrant employee than just like the lifetime of the proverbial rock star”.[18]

The division of labour within the Okay-pop manufacturing system

The Okay-pop enterprise is characterised by a extremely specialised division of labour. Songwriting groups create the musical content material. Music producers and music video administrators create the precise sound and accompanying visuals. Choreographers are liable for the skilled dance routines in music movies and on stage at concert events. Stylists and make-up artists create the precise look and total look. All these parts come collectively inside the Okay-pop corporations, whose advertising departments prepare branding partnerships and endorsements. In-house distribution arms promote the recordings and merchandise, and the Okay-pop corporations even have stakes in Korean music streaming providers.

Inside this Fordist-style manufacturing system, Okay-pop artists merely perform what they’re advised to do. John Lie even argues that Okay-pop stars must be considered as staff of Okay-pop businesses moderately than as impartial inventive personalities.[19]

Songwriting and music manufacturing

The truth is, Okay-pop artists are solely hardly ever concerned in songwriting and music manufacturing, as within the case of Stray Children or BTS. The key Okay-pop labels SM, YG and JYP Leisure, in addition to Hybe Company, make use of quite a few in-house songwriters, composers and music producers, who often work collectively in groups on a selected mission – an EP or a studio album.[20] This entails working very intently with the artists within the recording studio, and the blending and mastering of the recordings is often completed in-house.[21]

Nonetheless, this in-house manufacturing system is ceaselessly supplemented by collaborations with famend worldwide songwriters and composers. As early because the preliminary part of Okay-pop’s internationalisation within the 2010s, Okay-pop corporations entered into collaborations with Western songwriters and producers, as within the case of the Norwegian songwriting and manufacturing agency Dsign Group, which labored intently with SM Leisure[22] or the US songwriter and producer Claude Kelly, who has labored with JYP Leisure’s Marvel Women.[23] instance of worldwide collaboration is the album ‘I Acquired a Boy’ by Women’ Era, launched by SM Leisure in 2013. A complete of 74 contributors are credited on this launch, together with 36 songwriters and 15 producers, who come from South Korea, the USA, the Netherlands, Eire, Denmark, Morocco, Sweden, Norway and the UK.[24] These embody such famend artists because the British producer Steve Booker, the US producer workforce The Stereotypes, the British Grammy winner Victoria Jane Horn, and the US-based songwriter and producer Jordan Kyle.[25]

In the meantime, it has develop into customary follow for Western songwriters and producers to work with Okay-pop superstars comparable to BLACKPINK, BTS, Stray Children and Twice. Nonetheless, South Korean songwriters and producers who initially labored as staff for Okay-pop corporations have additionally efficiently gone impartial. One of the best-known instance is Massive Hit founder Bang Si-hyuk, who initially labored at JYP Leisure as a composer, arranger and producer. One other instance is the rapper, songwriter and producer Kang Dong-chul, higher often called Courageous Brothers, who labored for YG Leisure as a composer and producer between 2004 and 2008 earlier than organising his personal label, Courageous Leisure.[26] The songwriter and producer Pdogg (whose actual title is Kang Hyo-won) turned notably well-known; he had been working at Massive Hit Leisure from an early stage and was the primary to develop into conscious of the 15-year-old rapper RM, round whom BTS was subsequently shaped.[27] He’s liable for quite a few hits by BTS in addition to different main artists comparable to TXT, Suga and Enhypen, and was named the nation’s highest-earning songwriter and producer by the Korea Music Copyright Affiliation in 2019.[28] Amongst others[29] price mentioning is Teddy Park, whose actual title is Park Hong-jun; he initially loved success with the boy band 1TYM, however after the group disbanded in 2006, he started working as a producer at YG Leisure.[30] For ten years, he was liable for quite a few hits by YG artists comparable to Jinusean, SEVEN, Massive Bang, 2NE1 and, above all, BLACKPINK, earlier than founding “The Black Label” as a sub-label of YG and producing additional hits by BLACKPINK.[31]

Music video manufacturing

On the one hand, Okay-pop corporations are extremely built-in conglomerates; alternatively, they make use of versatile specialisation, whereby prices and dangers are outsourced to exterior corporations which can be, nevertheless, sure by strict contractual agreements.[32] This additionally applies to music video manufacturing. Music movies are an integral a part of the Okay-pop {industry}, and no launch is full with no rigorously crafted music video. A Guardian article estimates that, on common, a Okay-pop video prices US $100,000, with some productions exceeding the US $1 million mark.[33] The manufacturing prices for BLACKPINK‘s music video ‘Kill This Love’ rose to US $1.4 million, while US $2.4 million was spent on ‘Boy With Luv’, a collaboration between BTS and the US pop star Halsey.[34]

Okay-pop corporations don’t wish to bear these prices and the related dangers alone, and subsequently collaborate with main South Korean music video manufacturing corporations comparable to ZanyBros and Digipedi. ZanyBros is the market chief, having produced greater than a thousand Okay-pop movies and labored with nearly all main Okay-pop acts since its basis in 2002.[35] The second main music video manufacturing firm in South Korea is Digipedia – which stands for Digital Pedicure – based in Seoul in 2007 by two graphic designers. Digipedia takes a extra inventive method and is understood for its experimental movies.[36] Nonetheless, the manufacturing duo has additionally labored with among the largest names in Okay-pop, comparable to BTS, SEVENTEEN, TXT, GOT7, ENHYPEN and Stray Children.[37] Nonetheless, smaller music video manufacturing corporations have additionally managed to safe main contracts, comparable to GDW and Lumpens, each of which have produced quite a few music movies for BTS, or Naive Inventive, which works primarily with JYP artists.[38]

Choreography and stage efficiency

Dance routines and the accompanying choreography are an integral a part of Okay-pop. Dance coaching is given particular consideration throughout artist coaching and takes up a good portion of the trainees’ timetable. Choreographies are practised to perfection and likewise require good bodily health. Okay-Pop stars who’ve made their breakthrough work with the most effective choreographers for his or her music movies and stage performances. In South Korea, the 1MILLION Dance Studio is the premier vacation spot for this. Co-founded in 2014 by the now world-renowned choreographer, Lia Kim, who additionally serves as CEO and continues to steer dance lessons, 1MILLION rapidly turned a powerhouse for Okay-pop stars. Kim has choreographed many iconic songs, together with “TT” by Twice, “La Di Da” by Everglow and “Wannabe” by Itzy.[39] Nonetheless, well-known international choreographers have additionally develop into concerned within the Okay-pop {industry}, comparable to Keone Madrid from the USA, who was liable for the choreography for the BTS songs “Dope” and “Fireplace”, and the New Zealand dancer and choreographer Parris Goebel, who has labored with Massive Bang, BLACKPINK and 2NE1.[40]

Artist branding

The celebrities’ look – that’s, their look and clothes – can also be deliberate all the way down to the final element and tailor-made to the artists’ picture. To this finish, Okay-pop labels make use of groups of stylists, costume designers, hairdressers and make-up artists who fashion the celebs for public appearances, concert events and music movies.[41] This isn’t nearly selling a sure picture, but additionally about setting new traits. This side, too, is intently linked to the business advertising of the artists. SM, YG and JYP Leisure, in addition to Hybe, profit from important income generated by branding partnerships with main manufacturers and from their artists’ endorsement offers. A few of these corporations even run their very own vogue manufacturers, magnificence product strains and comfort shops to monetise the idols’ model picture.[42]

The artists’ contribution to the model picture is minimal. They execute to perfection what’s given to them. For this goal, the artists inside the woman and boy teams are assigned very clear roles. Within the literature, that is additionally known as archetypes, that are related to sure expectations.[43] Each group has a “chief”, comparable to RM from BTS or Jihyo from Twice, who’s liable for decision-making inside the group and likewise communicates these choices to the corporate. Then there’s the “Face of the Group”, also called the “Visible”, who most intently matches a selected excellent of magnificence and is successfully the group’s “face” in exterior promoting campaigns. “Vocalist” refers back to the group’s lead singer. They’ve probably the most distinctive or highly effective voice and subsequently carry out many of the singing components. Indispensable in most Okay-pop teams are the “rappers”, who’ve the most important share of the rap sections and are expert at improvising. One of the best dancers within the group are the “lead/foremost dancers”, who take centre stage throughout performances and likewise carry out crucial dance routines solo. The “centre” has a unique position; that is the group member who stands on the centre of the formation throughout a efficiency. That is often additionally the individual most ceaselessly captured by the digital camera. Lastly, there’s the position of the “maknae”, which often refers back to the youngest member of the group and might be described because the “child of the group”.

Along with these official roles inside a Okay-pop band, there are additionally unofficial archetypes which, in keeping with Kara Atkin, largely function stereotypes[44], such because the “Momzzang”, who has a very masculine physique and is bursting with health, or the “Fairly Boy”, who’s characterised by mushy facial options and has a extra light picture. One other male stereotype is the “Alien”, whose persona shouldn’t be really easy to decode and who stands for unconventional concepts. Among the many feminine members of a bunch, a distinction is made between “Woman Crush”, i.e. a robust and independent-seeming persona who exudes self-confidence. In distinction are the group members described as “cute” or “harmless”, who conform to female beliefs of magnificence and are supposed to seem notably female. They thus differ from the “elegant/mature” archetypes, who costume elegantly, are thought to be stylish and grown-up, and in doing so exude a sure distance and aloofness. It must be famous that the artists don’t select these archetypes or stereotypes themselves; moderately, these roles are assigned to them by the Okay-pop corporations. The artists are subsequently merchandise that function a mirrored image floor and are supposed to correspond to a selected advertising idea.

Endnotes

[1] An summary offers Chung, Annika. 2018. All About Okay-Pop. Inside Tales behind Okay-pop’s Rise to World Fandom. Coal Harbour Publishing. pp 120-121

[2] See https://audition.smtown.com/global-auditions. Accessed 04 Mar 2026

[3] Sin, Ben. 2018. Contained in the Okay-pop hit machine: how South Korea’s music {industry} has gone world. South China Morning Submit, 2 April. https://www.scmp.com/tradition/music/article/2139864/inside-k-pop-hit-machine-how-south-koreas-music-industry-has-gone. Accessed 04 Mar 2026

[4] See https://audition.jype.com/audition/auditions/1. Accessed 04 Mar 2026

[5] See https://www.sourcemusic.com/audition/index?lang=en. Accessed 04 Mar 2026

[6] Chung. All About Okay-Pop. p 120

[7] See https://www.sandfactory.co.kr/information/new_content_view.php?strSection=Information&strSeq=931&ckattempt=1 (Accessed 04 Mar 2026)

[8] Chung. All About Okay-Pop. p 120

[9] Ibid. p 122

[10] Sin. Contained in the Okay-pop hit machine

[11] Lie. Okay-Pop. p 120

[12] Lie. Okay-Pop. pp 124-125

[13] The Netflix documentary “BLACKPINK. Lights Up The Sky” presents a glimpse into the lives of the mission teams, offering a – nonetheless considerably idealised – look behind the scenes of the Okay-pop {industry}: https://www.netflix.com/at/title/81106901. Accessed 05 Mar 2026

[14] Lie. Okay-Pop. p 125

[15] Shin, Solee and Lanu Kim. 2013. Organizing Okay-Pop: Emergence and Market Making of Massive Korean Leisure Homes, 1980-2010. East Asia 30.

[16] Lie. Okay-Pop. p 125

[17] Ibid.

[18] Ibid.

[19] Ibid., p 124

[20] Hallyu Press authors’ workforce. p 49

[21] Ibid. p 50

[22] Kim, Suk-young. 2016. The Many Faces of Okay-pop Music Movies: Revues, Motown and Broadway in “Twinkle”. The Journal of Fashionable Tradition 49(1): pp 136-154. https://doi.org/10.1111/jpcu.12382

[23] An summary of the “Massive Three” corporations collaborating with Western songwriters and producers within the early 2010s present Oh, Ingyu and Gil-sung Park. 2012. From B2C to B2B: Promoting Korean Pop Music within the Age of Social Media. Korea Observer 43(3): S. 365-397

[24] Chung. All About Okay-pop. p 113

[25] Wikipedia. 2026. I Acquired a Boy. 2 February. https://en.wikipedia.org/wiki/I_Got_a_Boy. Accessed 05 Mar 2026

[26] Chung. All About Okay-pop. p 109

[27] Sprinkel. BTS: One. pp 46-47

[28] Kwak, Yeon-soo. 2019. BTS producer Pdogg acknowledged for prime music royalty earnings. The Korea Instances, 17 February. https://www.koreatimes.co.kr/leisure/k-pop/20190217/bts-producer-pdogg-recognized-for-top-music-royalty-earnings. Accessed 05 Mar 2026

[29] An inventory of probably the most distinguished South Korean songwriters and producers might be discovered at Chung. All About Okay-pop. pp 111-112

[30] Soulbeats. 2012. Exploring Hit-Makers: YG’s Teddy Park. 1 August. https://seoulbeats.com/2012/08/exploring-hit-makers-ygs-teddy-park/. Accessed 05 Mar 2026

[31] Choi, Na-young. 2015. Teddy and Kush to ascertain impartial label below YG Leisure.. Yang Hyun-suk personally concerned in planning. Osen, 22 September. https://m.entertain.naver.com/rating/article/109/0003162238. Accessed 05 Mar 2026

[32] Storper, Michael und Susan Christoperson. 1987. Versatile Specialisation and Regional Industrial Agglomerations: The Case of the US Movement Image Business. Annals of the Affiliation of American Geographers 77(1): pp 104-117. https://doi.org/10.1111/j.1467-8306.1987.tb00148.x

[33] Glasby, Taylor. 2018. The A-Z of Okay-pop: know your sasaengs out of your monster rookies. The Guardian, 5 June. https://www.theguardian.com/music/2018/jun/05/the-a-z-of-k-pop-know-your-sasaengs-from-your-monster-rookies. Accessed 05 Mar 2026

[34] Atkin. Okay-Pop. p 63

[35] Chakraborty, Riddhi. 2019. The Legacy of ZanyBros. Rolling Stone India, 18 April. https://rollingstoneindia.com/the-legacy-of-zanybros/. Accessed 09 Mar 2026

[36] Jackson, Julie. 2016. Digipedi, the duo behind a few of Okay-pop’s oddest movies. The Korea Herald, 8 March. https://www.koreaherald.com/article/890685. Accessed 09 Mar 2026

[37] Wikipedia. 2026. Digidepi. https://en.wikipedia.org/wiki/Digipedi. Accessed 09 Mar 2026

[38] An summary offers Chung. All About Okay-Pop. p 119

[39] Sukri, Hazeeq. 2024. How South Korea’s 1Million Dance Studio turned one of many largest names in Okay-dance. CAN Way of life, 29 December. https://cnalifestyle.channelnewsasia.com/leisure/1million-dance-studio-south-korea-427101. Accessed 09 Mar 2026

[40] Hallyu Press authors’ workforce. The Okay-Pop Phenomenon. p 53

[41] Ibid. p 54

[42] Ibid. p 55

[43] See Hallyu Press authors’ groups. The Okay-Pop Phenomenon. pp 56-57 and Atkin. Okay-Pop. pp 68-72

[44] Ibid. pp 72-75

The Economics of Okay-pop – Half 8: The Hybe Company – Music Enterprise Analysis

The Economics of Okay-pop – Half 8: The Hybe Company – Music Enterprise Analysis

by | May 18, 2026 | Entertainment Law, Music Business, Podcast News


Hybe Company is the latecomer amongst Okay-pop companies and was based in Seoul in 2005 by Bang Si-hyuk. How a expertise company that had simply 4 staff in 2007 and was getting ready to chapter managed to overhaul the “Huge Three” and develop into the biggest Okay-pop conglomerate is a exceptional success story that’s now to be examined in better element.

The Economics of Okay-pop – Half 8: The Hybe Company

Bang Si-hyuk[1] was already a composer and songwriter throughout his faculty days[2] and in 1997 met Park Jin-young, who was about the identical age and went on to discovered the Okay-pop company YG Leisure that very same yr.[3] Bang joined YG as a composer, arranger and producer, and was primarily chargeable for a number of hits by the boy band g.o.d.[4] In 2005, he left YG Leisure to start out his personal expertise company, Huge Hit Leisure, which didn’t get off to begin. It was solely after signing the trio 8Eight that the corporate started to see its first successes and safe its monetary stability.[5]

Nevertheless, Bang laid the foundations for constructing a company empire in 2010 when he signed the then 15-year-old Kim Nam-joon, higher often called Rap Monster or RM for brief. As now we have already seen, Huge Hit Leisure constructed BTS – arguably probably the most profitable Okay-pop act up to now – round RM. In 2013, when BTS was launched to the general public, Huge Hit Leisure was nonetheless a small fish within the Okay-pop ocean, which was dominated by SM, YG and JPG Leisure. At the moment, hardly anybody took any discover of BTS and Huge Hit Leisure, because the creator of the e-book “BTS – The Overview” famous in an interview.[6] To remain afloat financially, Huge Hit had been working with JYP Leisure since 2010, managing the boy band 2AM, which had been spun off from the eleven-member group One Day after successful the fact TV present “Sizzling Blood Males”.[7] In April 2014, the contract between Huge Hit and JYP Leisure ended, and three members of 2AM returned to JYP, while Lee Chang-min remained with Huge Hit and shaped the duo Homme with Lee Hyun from the just lately disbanded pop group 8Eight.[8]

In the meantime, BTS continued to construct their profession with album releases and their first worldwide excursions, although that they had but to attain a significant breakthrough. In September 2017, nonetheless, BTS lastly managed to interrupt into the worldwide charts for the primary time with their EP “Love Your self: Her”.[9] This caught the eye of buyers, and so the Korean cellular gaming firm Netmarble acquired a stake in Huge Hit for KRW 201.4 billion (equal to US $191.8 million), changing into the second-largest shareholder with a 25.71 per cent stake. The funding was actually additionally facilitated by the truth that the founding father of Netmarble was a cousin of Bang Si-hyuk.[10]

In March 2019, Huge Hit launched one other boy band, Tomorrow X Collectively (TXT for brief),[11] which was set to develop into the corporate’s second supply of revenue. Nevertheless, 2019 was above all a yr of company acquisitions. In July, Huge Hit acquired the label Supply Music[12] and, a month later, the video games developer Excellent.[13] In Could 2020, Huge Hit additionally grew to become the bulk shareholder of Pledis Leisure, a label based in 2007,[14] which had launched Son Dam-bi, the feminine counterpart to Okay-pop star Rain, in addition to the massively profitable boy band SEVENTEEN.[15]

The growth of the artist roster and the institution of a multi-label construction had been additionally pushed by the upcoming IPO. This proved to be an important success. The preliminary difficulty value for Hit Huge Leisure shares was set on the equal of US $117 on 15 October 2020. By the tip of the primary buying and selling day, the share value had virtually doubled to the equal of US $225.[16] This not solely made Huge Hit founder Bang Si-hyuk, who held a 36.6 per cent stake within the firm on the time, a billionaire, but in addition benefited the seven BTS members, who had opted to be paid in firm shares when renewing their contracts. Every band member grew to become US $15.6 million richer in a single stroke.[17]

This meant that Huge Hit Leisure had joined the ranks of the “Huge Three” within the Okay-pop business and would go on to surpass the three conglomerates within the years that adopted. An preliminary try was made as early as January 2021, when Huge Hit and its three way partnership BeNX acquired a 17.9 per cent stake in YG Plus, a subsidiary of YG Leisure. BeNX operated the fan group platform Weverse, by which the web group Naver has now invested KRW 355 billion (US$321 million), buying 49 per cent of the corporate’s shares in return. This deal catapulted Huge Hit into new spheres. Weverse had develop into not solely an essential platform for followers to speak with their idols, but in addition a key distribution channel for merchandise and different fan gadgets. Finally, BeNX was restructured into Weverse Firm.[18]

Nevertheless, probably the most vital step in the direction of changing into a number one Okay-pop firm was the company restructuring that started in March 2021, which additionally resulted within the renaming of the corporate to Hybe Company. Huge Hit grew to become the label Huge Hit Music, which now contains BTS and Tomorrow X Collectively, in addition to former 8Eight member Lee Hyun. Alongside Huge Hit Music, the label conglomerate now comprised Belift Lab (that includes the boy band Enhypen), Supply Music (that includes the lady band Le Sserafim), Pledis Leisure (that includes the boy band SEVENTEEN), Koz Leisure (that includes the rapper Zico) and Hybe Labels Japan (later renamed YX Labels). The second pillar was designated because the “Options” division, comprising the sport developer Excellent Corp., HYBE Three Sixty, HYBE IP, HYBE Edu, and the 2 Japanese subsidiaries HYBE Options Japan and HYBE T&D Japan. Lastly, Weverse Firm shaped the third pillar, “Platforms”.[19]

Whereas the restructuring course of was nonetheless underway, the Okay-pop group—now often called Hybe Company—set about its subsequent growth, this time into the US. In April 2021, Hybe America acquired Ithaca Holdings from Scooter Braun for US $950 million, a deal that included Taylor Swift’s label, Huge Machine.[20] Nevertheless, previous to this deal, Scooter Braun had already offered the celebrity’s first six studio albums to the personal fairness agency, the Carlyle Group.[21] Nevertheless, the Carlyle Group additionally held a stake in Ithaca Holdings and, as a part of this deal, has now offered its stake to Hybe Company. Scooter Braun has develop into co-CEO of Hybe America[22] and Scott Borchetta remained CEO of Huge Machine Label Group till February 2026.[23] A US $100 million capital improve carried out at Hybe America on the finish of March 2026 reveals that income fell by 59 per cent between 2022 and 2024, from KRW 70.4 billion to KRW 28.8 billion (equal to US$19 million). Though losses fell by 76 per cent to KRW 18.3 billion (US$12 million) over the identical interval, they continue to be properly into the crimson.[24] These figures present that increasing into overseas markets, and significantly into the US, includes excessive prices and dangers.

Nonetheless, following the group’s restructuring into Hybe Company in 2022, issues have settled down. The corporate’s founder, Bang Si-hyuk, stepped down from his position as CEO to affix the supervisory board, leaving the day-to-day operating of the enterprise to a youthful administration duo.[25]

In February 2023, Hybe then launched its massive transfer. Following a dispute amongst SM Leisure’s high administration, Hybe acquired the 14.8 per cent stake that SM founder Lee So-man had put up on the market.[26] This triggered a bidding battle for SM Leisure, because the leisure and media group Kakao additionally wished to amass a stake in SM. Finally, nonetheless, Hybe withdrew from the hostile takeover and offered half of its stake to Kakao, retaining simply 8.81 per cent in its rival.[27] This stake was finally offered to the Chinese language tech large Tencent in Could 2025.[28] With this deal – although it finally failed – Hybe demonstrated that it had not solely risen to affix the “Huge Three”, however was even able to taking on one in all its opponents. In consequence, Hybe had develop into the main Okay-pop company.

This was additional underlined by the truth that Hybe not solely had workplaces in Japan and the US, however had additionally expanded its operations to China, Latin America and India. Hybe Latin America was established following the acquisition of Exile Content material’s music division in November 2023, with Spanish-speaking workplaces opening in Mexico Metropolis, Los Angeles and Miami.[29] The institution of a department in China adopted with the founding of Hybe China in April 2025[30] and 5 months later, Hybe India Leisure was launched in Mumbai.[31]

Hybe had thus develop into an internationally energetic group that had outperformed its South Korean opponents, a reality additionally mirrored in its monetary figures (fig. 5.8). Even within the yr of its IPO, Hybe was clearly in first place with consolidated group income of KRW 796 billion, properly forward of SM Leisure (KRW 580 billion). The breathtaking income development over the subsequent two years – up 174 per cent to KRW 2.2 trillion – widened the hole with its opponents even additional. It was not till 2024 that income development slowed to three.6 per cent, although this nonetheless represented greater than double the income of its nearest competitor, SM Leisure, which stood at KRW 990 billion.

Determine 5.8: Hybe Company’s income, price and revenue tendencies, 2020-2024

Supply: After https://hybecorp.com/eng/ir/finance/revenue (Accessed 27 Feb 2026)

As price of gross sales rose at roughly the identical price as income between 2020 and 2023, Hybe was capable of double its working revenue throughout this era. The truth that the consequence was not higher was primarily as a consequence of advertising and overhead prices, which greater than tripled. As this development continued into 2024, working revenue fell by virtually 40 per cent to KRW 184 billion that yr. That is additionally mirrored within the web revenue, which grew by 111 per cent to KRW 183 billion between 2020 and 2023, however turned unfavorable in 2024 as a consequence of a closely unfavorable extraordinary results of KRW 3 billion. General, Hybe has additionally felt the results of the downturn within the Okay-pop market, however due to BTS‘s comeback in 2026, it could actually hope to return to a path of development and revenue. Nevertheless, the authorized troubles dealing with Hybe’s founder, Bang Si-hyuk, may show to be a significant drawback. Since July 2025, investigations have been underway towards him and three different staff relating to unauthorised insider buying and selling earlier than Hybe’s IPO. The bombshell got here in April 2026, when an arrest warrant was issued and Bang was barred from leaving South Korea, stopping him from attending BTS‘s opening live performance within the US. This monetary scandal may nonetheless forged a protracted shadow over Hybe’s success story.

Endnotes

[1] Kang, Haeryun. 2020. ‘Hitman’ Bang Si-hyuk, The Model-New Billionaire Behind BTS. NPR, 18 November. https://www.npr.org/2020/11/18/935848354/hitman-bang-si-hyuk-the-brand-new-billionaire-behind-bts. Accessed 26 Feb 2026

[2] Kang, Haeryun. 2020. ‘Hitman’ Bang Si-hyuk

[3] Han, Eun-hwa. 2016. Independence is vital to Okay-pop success

[4] Bruner, Raisa. 2019. The Mastermind Behind BTS

[5] Yoon, Sung-yeol. 2014. 8Eight to briefly disband after seven years… ‘Pursuing particular person music actions’. Star Information, 21. Dezember. https://m.entertain.naver.com/house/article/108/0002369958. Translated with DeepL. Accessed 26 Feb 2026

[6] Kang, Haeryun. 2020. ‘Hitman’ Bang Si-hyuk

[7] KoreAm. 2010. Cowl Story: 2PM

[8] Lee Min-ji. 2014. 2AM’s Jo Kwon, Im Seulong, and Jung Jin Woon Return to JYP Leisure. Newsen, 9 April. https://net.archive.org/net/20160312112024/http://mwave.curiosity.me/enewsworld/en/article/63193/2am-changes-agencies. Accessed 26 Feb 2026

[9] Wikipedia. 2026. Love Your self: Her

[10] Ha, Solar-young. 2018. Cousins unite as Netmarble buys stake in Huge Hit. Korea JoongAng Day by day, 6 April. https://koreajoongangdaily.joins.com/2018/04/06/business/Cousins-unite-as-Netmarble-buys-stake-in-Huge-Hit/3046607.html. Accessed 26 Feb 2026

[11] Kelley, Caitlin. 2019. BTS’s Label Reveals TOMORROW X TOGETHER Will Debut March 4. Forbes, 6 February. https://www.forbes.com/websites/caitlinkelley/2019/02/06/bts-bighit-tomorrow-x-together-txt-debut/. Accessed 27 Feb 2026

[12] Kelley, Caitlin. 2019. Huge Hit Leisure, BTS’s Label, Acquires Supply Music. Forbes, 28 July. https://www.forbes.com/websites/caitlinkelley/2019/07/28/btss-label-big-hit-entertainment-acquired-source-music/. Accessed 27 Feb 2026

[13] Kim, Eun-ae. 2019. Huge Hit acquires music recreation firm Excellent. Bang Si-hyuk: ‘It can deliver optimistic worth’. Osen, 19. August. https://m.entertain.naver.com/now/article/109/0004070079. Translated with DeepL. Accessed 27 Feb 2026

[14] Herman, Tamar. 2020. BTS’s Company Huge Hit Turns into Majority Shareholder Of Okay-Pop Firm Pledis, House To Seventeen & NU’EST. Forbes, 24 Could. https://www.forbes.com/websites/tamarherman/2020/05/24/btss-agency-big-hit-becomes-majority-shareholder-of-k-pop-company-pledis-home-to-seventeen–nuest/. Accessed 27 Feb 2026

[15] Kim, Jung-wook. 2007. “Do you need to hear my title, my title is Son Dam-bi, and also you need to hear my story about ‘Rattling’?” Edaily, 25 June. https://www.edaily.co.kr/information/learn?newsId=02086086583165328&mediaCodeNo=257. Translated with DeepL. Accessed 27 Feb 2026

[16] Stassen, Murray. 2020. Huge Hit CEO Bang Si-hyuk now price comfortably greater than $2bn as BTS agency’s IPO takes flight in Korea. Music Enterprise Worldwide, 15 October. https://www.musicbusinessworldwide.com/big-hit-ceo-bang-si-hyuk-now-worth-comfortably-more-than-2bn-as-bts-firms-ipo-takes-flight-in-korea/. Accessed 27 Feb 2026

[17] Ibid.

[18] Yoon, So-yeon. 2021. Huge Hit, Naver and YG be a part of forces in a giant Okay-pop inventory swap. Korea JoongAng Day by day, 27 January. https://koreajoongangdaily.joins.com/2021/01/27/enterprise/business/Huge-Hit-Leisure-beNX-YG-Plus/20210127192300544.html. Accessed 27 Feb 2026

[19] Stassen, Murray. 2021. BTS label Huge Hit Leisure formally rebrands as HYBE. Music Enterprise Worldwide, 19 March. https://www.musicbusinessworldwide.com/bts-label-big-hit-entertainment-officially-rebrands-as-hybe/. Accessed 27 Feb 2026

[20] Halperin, Shirley und Patrick Frater. 2021. BTS Label Proprietor HYBE Merges With Scooter Braun’s Ithaca Holdings for $1 Billion. Selection, 2 April. https://selection.com/2021/digital/information/hybe-merges-ithaca-holdings-scooter-braun-bts-1234943092/. Accessed 27 Feb 2026

[21] Halperin, Shirley. 2020. Scooter Braun Sells Taylor Swift’s Huge Machine Masters for Huge Payday. Selection, 16 November. https://selection.com/2020/music/information/scooter-braun-sells-taylor-swift-big-machine-masters-1234832080/. Accessed 27 Feb 2026

[22] Ingham, Tim. 2021. Scooter Braun sells Ithaca Holdings to HYBE, previously often called Huge Hit Leisure, for $1 billion. Music Enterprise Worldwide, 2 April. https://www.musicbusinessworldwide.com/scooter-braun-sells-ithaca-holdings-to-hybe-formerly-big-hit-entertainment/. Accessed 27 Feb 2026

[23] Stassen, Murray. 2026. Scott Borchetta exits HYBE AMERICA. Music Enterprise Worldwide, 12 February. https://www.musicbusinessworldwide.com/scott-borchetta-exits-hybe-america/. Accessed 27 Feb 2026

[24] Stassen, Murray. 2026. HYBE to inject $100M into US subsidiary, HYBE America. Music Enterprise Worldwide, 1 April. https://www.musicbusinessworldwide.com/hybe-the-home-of-bts-injects-100m-into-us-subsidiary-hybe-america12/. Accessed 02 Apr 2026

[25] Stassen, Murray. 2021. Bang Si-hyuk steps down as CEO of HYBE, previously often called Huge Hit Leisure. Music Enterprise Worldwide, 1 July. https://www.musicbusinessworldwide.com/bang-si-hyuk-steps-down-as-ceo-of-hybe/. Accessed 27 Feb 2026

[26] Hong, Yoo. 2023. SM founder Lee Soo-man joins palms with Hybe to counter SM’s Kakao partnership. The Korea Herald, 10 February. https://www.koreaherald.com/article/3059457. Accessed 27 Feb 2026

[27] Yim, Hyunsu. 2023. Okay-pop takeover battle loser HYBE to promote $437 mln stake in SM. Reuters, 24 March. https://www.reuters.com/markets/offers/south-koreas-hybe-sell-its-stake-sm-entertainment-2023-03-24/. Accessed 27 Feb 2026

[28] Stassen, Murray. 2025. HYBE is promoting its total stake in Okay-Pop rival SM Leisure to Tencent Music for practically $180m. Music Enterprise Worldwide, 27 Could. https://www.musicbusinessworldwide.com/hybe-to-sell-entire-stake-in-k-pop-rival-sm-entertainment-to-tencent-music-for-nearly-180m/. Accessed 27 Feb 2026

[29] The Straits Instances. 2023. Okay-pop large Hybe buys its first Latin music firm. 13 November. https://www.straitstimes.com/life/leisure/k-pop-giant-hybe-buys-its-first-latin-music-company. Accessed 27 Feb 2026

[30] Yoon, So-yeon. 2025. HYBE China opens in Beijing as Okay-pop powerhouse goals to spice up presence in native scene. Korea JoongAng Day by day, 29 Could. https://koreajoongangdaily.joins.com/information/2025-05-29/enterprise/business/HYBE-China-opens-in-Beijing-as-Kpop-powerhouse-aims-to-boost-presence-in-local-scene/2318504. Accessed 27 Feb 2026

[31] Agarwal, Bhavna. 2025. BTS’ firm HYBE formally launches Indian subsidiary HYBE India. India In the present day, 23 September. https://www.indiatoday.in/leisure/music/story/bts-company-hybe-officially-launches-indian-subsidiary-hybe-india-2791696-2025-09-23. Accessed 27 Feb 2026

The Economics of Okay-pop – Half 5: SM Leisure – Music Enterprise Analysis

The Economics of Okay-pop – Half 5: SM Leisure – Music Enterprise Analysis

by | Apr 26, 2026 | Entertainment Law, Music Business, Podcast News


We now have already regarded on the 4 main Okay-pop companies within the earlier weblog posts. Three of them – the so-called “Large Three” – have been based within the mid-Nineteen Nineties. Large Hit Leisure adopted in 2005 and rose to grow to be the market chief due to BTS. Within the subsequent 4 weblog posts, we’ll now look behind the scenes at these companies to realize a greater understanding of the financial system behind Okay-pop. Partly 5 we begin with SM Leisure.

The Economics of Okay-pop – Half 5: SM Leisure

The financial rise of SM Leisure

SM Leisure and its founder Lee Soo-man are the true innovators behind the Okay-pop manufacturing system. SM Leisure solid youngsters modelled on the US boy and woman teams of the Nineteen Nineties, skilled them extensively by means of a rigorous, multi-year trainee programme, and positioned them in the marketplace as a particular model. This idea proved to be an enormous industrial success. As early as 2000, SM Leisure was in a position to go public in South Korea and has been listed on the KOSDAQ know-how index ever since.[1] With contemporary capital, SM was in a position to start its growth within the Southeast Asian area. As early as January 2001, a three way partnership was established with the Japanese indie label Avex Trax, which not solely noticed the primary Okay-pop solo artist, BoA, marketed on the Japanese market, but in addition led to the founding of SM Leisure Japan, the corporate’s first abroad department, through which the Japanese TV manufacturing firm Yoshimoto Kogyo Holdings Co. additionally held a stake.[2]

The beginning of the second technology of Okay-pop artists in 2003 was additionally formed by SM Leisure with acts such because the boy band SHINee and the woman teams Ladies’ Technology and f(x).[3] Essentially the most vital facet of the second technology of Okay-pop was its growth into neighbouring Asian international locations. SM Leisure was already energetic in Japan, and in 2008 China was to comply with swimsuit with the launch of the boy band Tremendous Junior-M, a Mandarin-speaking sub-group of the Korean group Tremendous Junior, who made their debut look on the Chinese language Music Awards in April 2008, performing the music “U” from their debut album “Me”.[4] This established Chinese language-language Okay-pop in China and paved the way in which for additional productions.

This idea of splitting a supergroup into Korean- and Chinese language-speaking sub-groups was additionally utilized in 2012 to the 12-member boy band EXO, which was positioned as EXO-Okay (Okay stands for Korean) and EXO-M (M stands for Mandarin) on the Korean and Chinese language markets, respectively, and have been promoted individually.[5] This progressive advertising idea, developed by SM founder Lee Soo-man, was additionally an enormous industrial success and was copied by different Okay-pop firms.[6]

In 2016, SM Leisure broke new floor with the creation of the boy band NCT, an acronym for Neo Tradition Know-how. The fundamental thought was to create a super-group with an infinite variety of members, which may very well be divided into sub-groups as required and tailored to the wants of various markets. Particularly, NCT U[7] was launched to the general public in April, NCT 127[8] in July, and NCT Dream[9] in August, every with their respective debut releases. The goal of this new technique was to tailor the completely different boy bands to market situations and thus higher attain followers. SM Leisure founder Lee Soo-man developed this new technique himself and offered it to the general public in January 2016 throughout a presentation in Seoul entitled “SMTOWN: New Tradition Know-how 2016”.[10]

New technique and energy struggles behind the scenes

This mirrored SM Leisure’s new strategic route. The corporate was to be energetic not solely in Okay-pop manufacturing, but in addition in all areas of worth creation surrounding the popular culture phenomenon. On 3 February 2023, a video entitled “SM 3.0: Producing Technique Multi ‘Manufacturing Centre/Label’ System” was revealed on YouTube, through which the 2 new CEOs, Lee Sung-soo and Tak Younger-jun, dressed correctly in fits and ties and seated at a desk in entrance of an uncovered brick wall, introduced with a bow that the earlier music manufacturing system, which had been totally tailor-made to SM founder Lee Soo-man, was to get replaced by a brand new system that includes numerous manufacturing groups, some working in-house and others introduced in from exterior.[11] Nonetheless, this multi-production centre, which the 2 CEOs offered, was only one cornerstone of the brand new technique. As well as, additional in-house labels have been to be established and collaboration with exterior labels strengthened internationally. Central to the plan, nevertheless, was the institution of the corporate’s personal music publishing arm, which was meant to bundle music rights extra successfully and monetise them extra efficiently.[12]

Nonetheless, SM Leisure’s strategic reorientation will also be interpreted as a direct assault on Lee Soo-man, who, regardless of stepping down from the board, sought to retain inventive management inside the group in his function as government producer. Though the 2 CEOs highlighted the SM founder’s achievements within the video, the brand new “SM 3.0” technique subtly sidelined him from the inventive manufacturing processes and in the end from the corporate itself.

Lee Soo-man‘s response got here rapidly. On 6 February 2023, simply 5 days after the YouTube video was launched, it was introduced that Hybe Company, SM Leisure’s foremost rival, had acquired a 14.8 per cent stake within the firm for the equal of US $334 million.[13] This primary step in the direction of a hostile takeover had solely been attainable as a result of Lee Soo-man had bought a big portion of his stake in SM to Hybe.[14] Nonetheless, two days earlier, in settlement with SM, South Korea’s largest leisure group, Kakao, had acquired a 9.04 per cent stake in SM for US $172.8 million, thereby turning into the corporate’s second-largest shareholder.[15] Simply someday later, Lee Soo-man filed an injunction in opposition to SM Leisure over the difficulty of latest shares and convertible bonds in favour of Kakao, stating that the deal had been concluded with out his consent as the most important shareholder and was due to this fact “unlawful”.[16]

Hybe’s acquisition triggered a bidding battle that might decide the destiny of SM Leisure. Initially, SM and Kakao have been at a drawback as a result of, on 3 March 2023, a court docket had issued an injunction in opposition to the deal between Kakao and SM.[17] Kakao then went on the offensive and made a proposal to shareholders to buy 35 per cent of the corporate’s shares for US $966 million, thereby rising its stake to 39.87 per cent.[18] Surprisingly, on 24 March 2023, Hybe withdrew from the bidding battle, arguing that it didn’t wish to harm shareholder worth, and introduced its intention to promote its stake in SM to Kakao.[19] On 28 March 2023, Kakao fulfilled its announcement and bought 35 per cent of SM’s shares. Hybe then bought half of its stake in SM to Kakao, retaining an 8.81 per cent stake within the firm,[20] which have been ultimately bought to the Chinese language leisure group Tencent on 30 Might 2025 for round US $180 million.[21] This made Tencent the second influential co-owner of the Okay-pop group, following the e-commerce large Alibaba, which had already acquired a 4 per cent minority stake in SM Leisure in February 2016.[22]

The reason for why Hybe withdrew from the bidding battle is straightforward: by means of this manoeuvre, SM founder Lee Soo-man had secured his reinstatement as head of the A&R division at SM Leisure, thereby regaining inventive management over the manufacturing course of.[23] The 2 younger CEOs who had staged the revolt, nevertheless, have been changed by the chief monetary officer, Jang Cheol-hyuk,[24] which was now tasked with implementing the “SM 3.0” technique. As a primary step, Kreation Music Rights was established in August 2023 as an in-house music publishing division.[25] The day earlier than, a brand new abroad department – SMKEA – was additionally established within the US in collaboration with Kakao.[26] The Okay-pop group thus continued the worldwide growth it had been pursuing for years, which, along with branches in Japan, China and Singapore, now additionally included a department in North America.

The enterprise efficiency of SM Leisure

An evaluation of SM Leisure’s organisational construction reveals that the group will not be a conventional main music label primarily based on the Western mannequin, however reasonably an built-in leisure conglomerate that developed from a Okay-pop artist company. The 2021 annual report signifies that SM Leisure had 37 affiliated firms, six of which have been listed on the inventory alternate. As well as, SM Leisure held shares in an extra 19 firms,[27] numerous content material manufacturing firms (TV, radio, theatre, software program, print, digital actuality, and many others.), in addition to branding and promoting companies, an architectural agency and a property developer, and a enterprise capital agency; it even operates a sequence of comfort shops to monetise the manufacturers of the Okay-pop stars beneath contract. SM Leisure thus recognised the worth of built-in advertising of all sorts of rights at an early stage and can also be represented internationally with branches in Japan, South-East Asia, the USA and Sweden.

Determine 1: Income, value and revenue traits at SM Leisure Group, 2014-2024

Supply: After SM Leisure Enterprise Stories 2019-2021 (translated with DeepL) and SM Leisure quarterly stories 2021-2024 (in English)

SM Leisure’s progress in recent times can also be mirrored within the group’s income efficiency. As proven in fig. 1, there was a pointy rise in income in 2018, primarily because of the acquisition of stakes in several firms, which subsequently led to the formation of the SM Life Design Group. The combination of SM Tradition & Content material Co. Ltd. into the group’s constructions, which was accomplished on the finish of 2017, has additionally boosted turnover.[28] The non permanent decline in gross sales in 2020 was because of the impression of the COVID-19 pandemic, which precipitated revenues from the live performance section specifically to plummet. This made the following rise in gross sales all of the extra dramatic. The live performance enterprise recovered in 2022, however contributed solely KRW 23 billion to whole income of KRW 851 billion. It was not till 2023 and 2024 that the live performance division regained momentum, with income of KRW 77 billion and KRW 123 billion respectively. A pointy improve of 155 per cent between 2021 and 2024 was recorded within the merchandising and licensing enterprise, which in 2024 contributed KRW 169 billion extra to whole income than the live performance section.

Nonetheless, speedy progress and diversification into different sectors have additionally led to a rise in expenditure (see fig. 5.4). Between 2017 and 2024, whole expenditure grew by 155 per cent from KRW 354 billion to KRW 902 billion, primarily as a result of rising value of gross sales, which in 2024 have been 174 per cent larger than in 2021. Advertising and marketing and overhead prices have additionally doubled throughout this era. The primary value drivers listed here are personnel bills. Between 2019 and 2024 alone, the variety of staff in full-time equivalents rose from 493 to 723.[29]

This additionally had an impression on revenue efficiency (see fig. 1). Though revenue from working actions rose to KRW 114 billion in 2023 following a decline within the coronavirus yr of 2020, however in 2024 there was a 23 per cent decline in earnings, which pushed internet revenue all the way down to virtually zero, primarily as a result of losses at related firms, notably at SM Tradition & Content material Co.[30]

This highlights the vulnerability of SM Leisure, which has grown quickly in recent times and is struggling to combine the acquired firms and investments into the group construction. The “SM 3.0” technique talked about earlier is meant to assist with this, with all enterprise divisions being oriented in the direction of the creation of cultural values. The goal is to create a unifying framework for the very various enterprise divisions. As advantageous as SM Leisure’s broad vary of choices is, integrating them is equally troublesome. The corporate’s future success will due to this fact rely closely on whether or not it succeeds in higher integrating the varied elements of the enterprise and focusing them on a standard aim.

Endnotes

[1] Yang, Hong-mo. 2000. Garosu.com and 4 different firms start buying and selling on KOSDAQ on the 27th. Naver Information, 25 April. https://n.information.naver.com/mnews/article/015/0000210471?sid=101. Translated with DeepL. Accessed 28 Jan 2026

[2] Gil, Deok. 2001. SM Leisure “Concentrating on the World Music Album and Music Video Market”. Naver Information, 7 March. https://n.information.naver.com/mnews/article/015/0000345241?sid=102. Translated with DeepL. Accessed 28 Jan 2026

[3] See for instance Atkin. Okay-Pop. p 28

[4] Garcia, Cathy Rose A. 2008. Tremendous Junior-M Debuts in China. The Korea Occasions, 8 April. https://www.koreatimes.co.kr/way of life/people-events/20080408/super-junior-m-debuts-in-china. Accessed 28 Jan 2026

[5] Seabrook, John. 2012. Manufacturing unit Ladies. The New Yorker, 1 October. https://www.newyorker.com/journal/2012/10/08/factory-girls-2. Accessed 28 Jan 2026

[6] Ibid.

[7] Bahk, Eun-ji. 2016. SM’s new Okay-pop band NCT U to debut this week. The Korea Occasions, 4 April. https://www.koreatimes.co.kr/leisure/shows-dramas/20160404/sms-new-k-pop-band-nct-u-to-debut-this-week. Accessed 28 Jan 2026

[8] Ang, Estee. 2016. (UPDATE) #NCT127: SM Leisure Unveils Members Of New NCT Sub-Unit. Hybe, 4 July. https://hype.my/nct127-sm-entertainment-unveils-members-of-new-nct-sub-unit/. Accessed 28 Jan 2026

[9] Moon Wan-sik. 2016. NCT DREAM to debut their first single “Chewing Gum” on “M Countdown” on the 25th. Star Information, 19 August. https://m.entertain.naver.com/now/article/108/0002548916. Translated with DeepL. Accessed 28 Jan 2026

[10] Jung, Min-kyung. 2016. SM Leisure’s subsequent boy band to have ‘limitless’ members. The Korea Herald, 27 January. https://www.kpopherald.com/article/834265. Accessed 28 Jan 2026

[11] SMTown. 2023. SM 3.0: Producing Technique – Multi ‘Manufacturing Middle/Label’ System. YouTube, 3 February. https://www.youtube.com/watch?v=n4WSs3ebprw&checklist=PL_ndMPzmGNt3v3RUs1K20LOyG8oec472d. Accessed 30 Jan 2026

[12] Ibid.

[13] Stassen, Murray. 2023. HYBE has now spent $600m+ in a single week, because it buys 14.8% stake in Okay-Pop rival SM Leisure for $334m. Music Enterprise Worldwide, 10 February. https://www.musicbusinessworldwide.com/hybe-acquires-14-8-stake-in-k-pop-rival-sm-entertainment-for-334m1/. Accessed 30 Jan 2026

[14] Ibid.

[15] Dalugdug, Mandy, 2023. South Korea’s Kakao buys 9.05% stake in Okay-Pop large SM Leisure value $172.8m. Music Enterprise Worldwide, 7 February. https://www.musicbusinessworldwide.com/south-koreas-kakao-buys-9-05-stake-in-k-pop-giant-sm-entertainment-worth-172-8m/. Accessed 30 Jan 2026

[16] Herold Muse. 2023. Lee Soo-man threatens authorized motion in opposition to SM Leisure: ‘Kakao’s acquisition of SM shares is illegal’ (official assertion). 7 February. https://www.heraldmuse.com/article/3056777. Translated with DeepL. Accessed 30 Jan 2026

[17] Dalugdug, Mandy, 2023. In victory for HYBE, SM Leisure ends Kakao deal as court docket blocks agency from issuing new shares. Music Enterprise Worldwide, 6 March. https://www.musicbusinessworldwide.com/in-victory-for-hybe-sm-entertainment-ends-kakao-deal-as-court-blocks-firm-from-issuing-new-shares/. Accessed 30 Jan 2026

[18] Dalugdug, Mandy. 2023. HYBE’s SM Leisure takeover plan falls quick, Kakao launches $960m provide for controlling stake. Music Enterprise Worldwide, 7 March. https://www.musicbusinessworldwide.com/hybes-sm-entertainment-takeover-plan-falls-short-now-kakao-launches-960m-offer-for-controlling-stake/. Accessed 30 Jan 2026

[19] Ingham, Tim. 2023. HYBE pulls out of bid to accumulate 40% stake in SM Leisure: ‘The market has been exhibiting indicators of overheating as a result of our competitors with Kakao.’ Music Enterprise Worldwide, 7 March. https://www.musicbusinessworldwide.com/hybes-sm-entertainment-takeover-plan-falls-short-now-kakao-launches-960m-offer-for-controlling-stake/. Accessed 30 Jan 2026

[20] Yim, Hyunsu. 2023. Kakao’s stake in Okay-pop company SM climbs to 40%, HYBE retains 8.8%. Reuters, 28 March. https://www.reuters.com/enterprise/media-telecom/kakao-reaches-40-stake-k-pop-agency-sm-hybe-keeps-88-2023-03-28/. Accessed 30 Jan 2026

[21] Stassen, Murray. 2025. HYBE is promoting its complete stake in Okay-Pop rival SM Leisure to Tencent Music for almost $180m. Music Enterprise Worldwide, 27 Might. https://www.musicbusinessworldwide.com/hybe-to-sell-entire-stake-in-k-pop-rival-sm-entertainment-to-tencent-music-for-nearly-180m/. Accessed 30 Jan 2026

[22] Kang, John. 2016. Why Alibaba Purchased $30M Stake In Okay-Pop Large SM Leisure, Residence To EXO And Ladies’ Technology. Forbes, 11 February. https://www.forbes.com/websites/johnkang/2016/02/11/why-alibaba-bought-30m-stake-in-k-pop-giant-sm-entertainment-home-to-exo-and-girls-generation/#7e130efda556. Accessed 30 Jan 2026

[23] Lee, Eun-young. 2023. Former SM CEO Lee Sung-soo, who pledged to step again, returns to C-level place. ChosunBiz, 14 April. https://n.information.naver.com/mnews/article/366/0000893605. Translated with DeepL. Accessed 30 Jan 2026

[24] Kwaak, Jeyrup S. 2023. SM Leisure Appoints New CEO & Board as Okay-Pop Large Seems to be to the Future. Billboard, 31 March. https://www.billboard.com/professional/k-pop-label-sm-entertainment-appoints-new-ceo-board/. Accessed 30 Jan 2026

[25] Dalugdug, Mandy. 2023. SM Leisure to launch music publishing subsidiary, Kreation Music Rights. Music Enterprise Worldwide, 10 August. https://www.musicbusinessworldwide.com/sm-entertainment-to-launch-music-publishing-subsidiary-kreation-music-rights/. Accessed 30 Jan 2026

[26] Schneider, Marc. 2023. SM Leisure and Kakao Launch Joint Division in North America. Billboard, 1 August. https://www.billboard.com/professional/sm-entertainment-kakao-north-america-launch-partnership/. Accessed 30 Jan 2026

[27] SM Leisure. 2022. SM Leisure Enterprise Report 2021. pp 328-332 (translated with DeepL)

[28] SM Leisure. 2022. SM Leisure Enterprise Report 2021., p 14 (translated with DeepL)

[29] SM Leisure. 2022. SM Leisure Sustainability Report 2021. p 52 and SM Leisure. 2025. SM Leisure Sustainability Report 2024. p 90

[30] See quarterly stories of SM Leisure for 2024