3 Ways HYBE Could Benefit From Its SM Entertainment Share Acquisition

Earlier today, HYBE released a statement on social media announcing that they have officially acquired Lee Soo Man‘s shares in SM Entertainment, thus becoming the company’s largest shareholder.

Alongside explaining how HYBE hopes to support SM’s endeavors — such as allowing SM to work autonomously — the statement (directed at fans, employees, artists, and shareholders alike) also touched on three ways HYBE itself could benefit from the share acquisition.

OPEN LETTER TO FANS, ARTISTS, EMPLOYEES, AND SHAREHOLDERS OF SM ENTERTAINMENT pic.twitter.com/CsxqAmopFy

— HYBE OFFICIAL (@HYBEOFFICIALtwt) February 22, 2023

1. SM’s success in the Asian market

SM Entertainment is known as one of the companies with the biggest success across Asia, including outside of South Korea. Specifically, HYBE recognized the company’s accomplishments in China, Japan, and Southeast Asia.

Artists such as BoA, TVXQ!, SHINee, and Girls’ Generation have seen huge amounts of success in Japan over the years, and some were among the first to do so. Likewise, EXO accumulated an enormous fanbase in China with their EXO-M and EXO-K units.

While Red Velvet has built a strong fanbase in numerous Southeast Asian countries, groups like NCT and aespa are considered the next step in SM’s global trajectory. Through NCT’s multiple units appealing to different demographics and aespa’s innovative metaverse concept, SM has a strong foundation for continued success in the global market.

HYBE, meanwhile, has seen an overwhelmingly successful outcome on the global K-Pop scene — specifically in the United States, South America, and India with acts like BTS, ENHYPEN, Seventeen, and the newest K-Pop sensation NewJeans.

In the statement, penned by the company’s CEO Park Jiwon, HYBE recognizes that combining SM’s success in Asia with HYBE’s own success in other global regions will make both companies “the most innovative game changer in the global music industry.”

2. SM’s creative capabilities

One of the promises HYBE commits itself to in the statement is “collaborative innovation based on mutual corporate philosophy” — the combination of each company’s strengths to pursue a greater goal.

While emphasizing that they will “fully respect the direction laid out in SM 3.0 growth strategy,” HYBE also states that integrating their “creative capabilities” and “content-oriented culture” with SM Entertainment will create a historic innovation in K-Pop globally, further aiding them in their goals for the future.

What Park Jiwon means by “creative capabilities” is open to interpretation, but the phrase likely refers to the companies’ more artistic endeavors. Like HYBE, SM Entertainment is known for its ability to create rich artist IPs, with strong concepts and popular music. In turn, this creativity can form the basis for content that will in turn excite fans and build a stronger following for their artists.

In summation, Park Jiwon suggested that SM Entertainment’s and HYBE’s goals of becoming global companies are closely interconnected. HYBE follows its “we believe in music” motto in its goal to become a leading entertainment lifestyle platform company. Similarly, SM revealed a few weeks ago that they are looking toward becoming a fan- and shareholder-centered entertainment company through their new SM 3.0 plan.

3. SM’s business pipeline capabilities

Other than leveraging the creative capabilities of SM Entertainment and its artists, HYBE is also interested in integrating SM’s business pipeline strengths with its own.

These are the same strengths that have made the creation and success of fandom platforms like HYBE’s Weverse and SM’s DearU Bubble possible. These two platforms are widely known and used by several artists even outside of the two companies. For instance, BLACKPINK joined Weverse back on August 2 of last year, while JYP Entertainment artists TWICE, ITZY, and Stray Kids have been using DearU Bubble since 2020.

HYBE’s statement also mentioned the companies’ capabilities in areas like concert distribution and original story IP: two areas SM Entertainment excels in with Beyond Live, Kwangya, and CAWMAN.

Park Jiwon explains that by combining SM’s capabilities across these fields with their own, both HYBE and SM can bolster their overall business processes — from planning to distribution.

By joining forces with SM Entertainment, HYBE believes that they will stand shoulder-to-shoulder with the world’s major record labels.

K-Pop flourished in an environment where we could challenge ourselves. We should conserve the ground so that we can stand shoulder-toshoulder with the world’s major record labels.

— Park Jiwon