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Lee Soo-man, the founder and former executive producer of SM Entertainment (courtesy of SM entertainment)

BTS’ label Hybe is competing to acquire its rival, SM Entertainment, in a move that is drawing both hopeful expectations and concerns. Some predict that Hybe’s acquisition of SM will create a synergy effect and increase its competitiveness in the global market, but others worry that the acquisition will threaten the diversity of K-pop.

There is concern that if a company with a market cap of 11 trillion won (US$8.58 billion) monopolizes Korea’s entertainment industry, there won’t be enough space for smaller agencies, which will lead to bigger companies continuing to exert their influence while small agencies will not be given the same opportunities.

Until now, the K-pop industry has grown steadily amid healthy competition between Hybe, SM, JYP, and YG — four entertainment companies that each have their own color and style. However, if Hybe acquires SM, which has pioneered the K-pop industry for the past 28 years, Hybe’s influence in the music industry will, inevitably, increase.

“The direction the agency wants to plan their projects determines the music and overall style of their musicians, so if a large number of influential K-pop musicians all belong to one agency, it goes without saying that diversity will decrease,” commented a music industry insider, who preferred to remain anonymous.

“Having one mega-company basically monopolize the industry, instead of having several companies competing against one another, will not do much to help the overall development of K-pop,” they added.

Another source remarked that it’s already difficult for those who don’t belong to famous labels to break their way into the industry and debut. “If this ‘Big 4’ structure is broken and Hybe becomes bigger, it gives basically no space for the smaller agencies and the independent music scene to settle, which will get rid of diversity altogether,” they added.

Some predict that the appearance of a larger agency will make it difficult for fledgling agencies that could be the Hybe or SM of tomorrow to stake their place in the industry.

On the other hand, some have analyzed that the K-pop market has passed the stage of being dominated by any one specific company or group, so the acquisition will have a limited effect on the industry at large.

“Up to this point, Hybe has acquired Source Music and Pledis Entertainment, along with other companies, but the groups in those agencies have managed to retain their unique styles,” said a current employee at a major entertainment agency. “Given the global growth of K-pop, if Hybe does acquire SM entertainment, it will give them enough strength to be a formidable competitor in worldwide entertainment.”

Meanwhile, the prospect of Korean Wave-trailblazer SM being acquired by latecomer Hybe, is reportedly stirring up confusion within the agency itself. Founded in 2005, Hybe was a late arrival to the existing “Big 3” agencies established in the 1990s, but the success of BTS changed the landscape of the domestic and global music industry.

“It’s sad to see the era of SM, the forerunner of K-pop, apparently coming to an end,” said one industry insider. “There seems to be disagreement within SM with some considering major shareholder and executive producer Lee Soo-man’s decision to hand over his shares to Hybe as one that only considers his personal interests, while others say that it’s better for a K-pop company to become the No. 1 shareholder of SM.”

By Nam Ji-eun, staff reporter

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