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A K-Pop Monopoly?
Kakao, SM Entertainment, Hybe and BTS. Drama!
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South Korea is the land of chaebol and cartels, so the note below doesn’t surprise me.
BIG reader S.K. sent in this note.
There's currently an attempt to establish a Kpop monopoly. The short version is that Hybe (the label which represents BTS) is trying to become the largest shareholder in SM Entertainment, the largest legacy Kpop label. Both Hybe and SM are 'Big 4' Kpop labels.
This is part of an internal power struggle in SM Entertainment. I haven't followed all the details, but many people say it's like watching a kdrama. SM Entertainment was about to form a partnership with Kakao, one of the biggest internet companies in South Korea. Part of the deal was that Kakao would become the largest shareholder in SM (though they'd still be a minority owner under the deal). Lee Sooman, the founder of SM Entertainment ('SM' is short for 'Soo Man'), who was also the biggest shareholder, saw this as a threat to his power, so he made a deal to sell all of his share to Hybe, and Hybe is trying to buy even more shares so they become a majority owner. One of the co-CEOs of SM is Lee Sooman's nephew, and he opposes Hybe's 'hostile takeover' along with the other top management at SM, so on top of everything else, we have a struggle between uncle and nephew. This article has more details.
To get the point of view of SM's current management, watch this video (which has English subtitles). I know people who are fans of artists under both Hybe and SM, and they both complain about how expensive albums and merchandise are, though Hybe has even higher prices than SM. I noticed in the video he calculates market share based on revenue, if it were based on units sold (albums, concert tickets, etc.) Hybe + SM's share of the kpop market would be lower.
Now, another angle is that Kakao is already a monopolist in some fields, and they're also in a position to monopolize kpop as well. They own a few kpop labels which represent some of the most successful kpop artists not at the Big 4, including IU, South Korea's most popular singer-songwriter. To put that in American terms, imagine that Google owned a few pop music labels, and one had an exclusive contract with Taylor Swift. Kakao has already been accused of using its media influence to push good publicity of kpop artists under its own labels and bad publicity of kpop artists under other companies. Kakao is also one of the biggest, if not THE biggest, Kpop distributor, most smaller labels distribute through Kakao. Even though Kakao isn't trying to outright buy SM, developing a strong business alliance with SM is also IMO cartel behavior.
On top of that, one of the other Big 4 Kpop labels, YG Entertainment, might be losing ground. They've already had some of their top Kpop artists leave in the past six months, and the contracts of their most profitable group, Blackpink, expire this year. Other companies with deep pockets are almost certainly trying to persuade Blackpink to join them, and Hybe might be one of those companies. If Blackpink leaves YG Entertainment, YG Entertainment might become the weakest of the Big 4 Kpop labels. And if Hybe picks up any Blackpink members...
I learned most of this from Kpop fans.
I hope this was of interest.