Korea-based Kakao Corp bought a 9.05% stake in K-Pop giant SM Entertainment.
Based on ReutersKakao is buying his stake in SM Entertainment – the company behind stars like NCT, EXO and Aespa – in a deal worth 217.2 billion won (172.8 million USD).
Kakao Investment Director Bae Jae-hyun is quoted by Reuters like saying, “We hope to work together to compete in the fiercely competitive global music and content market through this investment.”
Kakao’s investment in SM Entertainment comes a month after Kakao Corp’s subsidiary Kakao Entertainment guaranteed An investment of 1.2 trillion Korean Won (approximately $966 million) from what they call “leading sovereign wealth funds.”
Today’s news (February 7) also coincides with the announcement that SM Entertainment will be establishing several production centers and trademark systems for the first time since the company was founded in 1995.
The move was revealed by the co-CEOs, Lee Sung Soo and Tak Young Jun, in a video uploaded on Facebook. YouTube on Friday (see below).
in one Presentations published alongside the video, SM said it aims to become a global entertainment company “focused on fans and shareholders” from 2023 onward.
Back in December, the company confirmed plans to establish a Southeast Asia headquarters in Singapore as part of its global expansion.
The company, whose list includes K-Pop stars such as SUPER JUNIOR, Girls’ Generation, SHINee, EXO, Red Velvet, KANGTA, BoA, TVXQ!, NCT and aespa, says it’s focused on global expansion. K-Pop culture from the 2010s and early 2020s.
Under its latest development strategy, dubbed SM 3.0, SM said it will establish five new production centers and a number of domestic and foreign music labels. The plan aims to systematize the production process for artists.
Reuters reports that SM said the money raised through the Kakao deal will fund this new strategy.
Co-CEO Lee Sung-su said, “The biggest changes that will come with the new system are the establishment of multi-production centers, multiple labels and a music publishing subsidiary. quote via Korea Joongang Daily as said in video message.
The latest model will see SM operate through a number of production centers with their own A&R, management, music video, artwork and PR and marketing teams. In this way, SM will be able to expand its musical reach by ensuring creative autonomy, the company said.
“We have realized the limits of intellectual property production and management [IP] meet the needs of the market and fans,” added Lee.
SM says that a multi-manufacturing-centric approach will allow each unit to make independent decisions based on their business performance, while enhancing expertise based on intellectual property and cost-effectiveness. theirs.
Each production center will also manage IP throughout an artist’s career, including planning artist concepts in the pre-debut phase. SM said production centers will plan and manage artists based on their deep understanding of the market and fans.
SM also hopes the new model will maximize intellectual property profits as multi-manufacturing centers will facilitate the transfer of intellectual property to multiple in-house labels.
“Our focus with SM 3.0 is to mark ourselves as a global entertainment company centered on fans and shareholders. We promise to communicate more actively with our fans and shareholders with SM 3.0, starting with our diverse brand and production system,” co-CEO Tak Young-jun is quoted as saying. Joongang Daily like saying.
The SM 3.0 strategy is widely seen as an attempt to reduce the company’s reliance on founder Lee Soo-man, amid tensions between him and the group’s shareholders.
In October 2022, SM severed ties with Like Planning, a private company owned by Lee, over concerns about the company paying billions of Korean won annually to the company.
Lee will decide his fate as SM’s main producer when the company holds its next general meeting in March. ONE documentary about Lee’s life being made at Amazon Main video.
Park Seong-guk, an analyst at Kyobo Securities, said SM 3.0 will likely improve the company’s earnings and increase shareholder confidence, Joongang Daily report.
“Aside from the independence of the board and the normalization of the relationship with the affiliate, the multi-production system is expected to have a positive effect on the company’s earnings in the medium to long term. term,” Park is quoted by Joongang Daily like saying.
For the third quarter of 2023, SM posted a 65.4% increase in revenue year-on-year to 238.1 billion Korean won ($189.9 million), driven by sales of its ‘MD/’ business unit. Licensing’ increased by 76.1%. .
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