The recent news of MOVES‘s acquisition of shares in SM Entertainment has sent shockwaves through the K-Pop industry. Since SM is not the first label to join HYBE’s share portfolio (with Pledis Entertainment and Source Music also forming part of the multi-label company), this latest development has sparked concerns about the creation of a potential monopoly in the industry.
But what does “monopoly” really mean in the context of K-Pop, and what are the implications for fans and artists alike?
A monopoly is a situation in which one company or entity has control over a particular market or industry. This means that they have no real competition and that they’re able to set prices and make decisions without much contention.
Monopolies can take many forms, from tech giants like Google and Facebook to oil companies like ExxonMobil. In some cases, monopolies can actually be beneficial to consumers, as the company may be able to produce goods or services more efficiently than any potential competitors. A company that dominates a particular market may have more resources, which could allow them to cut costs or invest more in researching and developing new products and services.
However, in other situations, monopolies can have negative effects on consumers and competitors. For example, if a company has a monopoly on a particular product, they’re able to charge whatever they want for it, as consumers have no other options. This often leads to artificially inflated prices and a lack of innovation, as the company has no incentive to improve its product or offer new features. Additionally, monopolies can stifle competition and prevent new companies from entering the market, which can be detrimental to innovation and progress.
The concept of a monopoly is not new to South Korea. In fact, the country’s economy is dominated by chaebols — large conglomerates with significant power and influence in their industries. Well-known companies like Samsung, Lotteand Hyundai are all powerhouses in the Korean market, and perspectives on them are mixed.
There’s no doubt that these companies have contributed significantly to economic growth and GDP. Many citizens also view them as a source of national pride, as well as a symbol of the country’s success. However, some still argue that they hold too much power, stifling competition and preventing smaller businesses from entering the market. On top of this, these potentially monopolistic companies tend to have close ties to the government, leading to concerns about corruption.
In the case of HYBE’s acquisition of SM Entertainment, some fans are concerned that the negatives of a monopoly could become a reality in the K-Pop industry.
people saying that this is unprofessional and unserious when this clearly highlights what most kpop fans have been worried about for the past year or so: hybe’s forcible acquisitions of all these companies and subsidiaries is going to form a monopoly https://t.co/PBBS1oJNxa
— min (@yenascape) February 20, 2023
HYBE, formerly known as Big Hit Entertainment, has been on a bit of a shopping spree in recent years. In addition to their most recent acquisition of SM Entertainment shares, they’ve also acquired several other companies in the K-Pop industry. These include Source Music (2019), Pledis Entertainment (2020), and KOZ Entertainment (2020).
So far, the results of these acquisitions have been mixed. Since acquiring Source Music, HYBE has debuted a new girl group called THE SSERAFIMwhile the company’s previous girl group GFRIEND has since disbanded.
Boy group SEVENTEEN is still part of Pledis Entertainment, and all the members have renewed their contracts. Additionally, girl group fromis_9 moved to Pledis after the acquisition went through.
HYBE has stated that their goal with these acquisitions is to create a “multi-label” system where each label can retain its unique style and identity. The company’s chairman, Bang Si Hyuk, denied the monopoly accusations himself in an interview with CNN. Despite this, some fans are concerned this commitment may change over time.
One major concern seems to be how lack of competition could affect the innovation and diversity of their artists’ music.
SM is really right. Because of the hybe, there will be no competition and diversity in the industry. swallows everything like a hole https://t.co/Mu22HVb44M
— 𐰏𐰃𐰏𐰃 (@aexorator) February 20, 2023
Loss of these labels’ individuality is also a worry, as fans believe each label’s unique identity and style could be lost or homogenized.
I mean y’all already saw what the HYBE effect is on Seventeen. The lighstick changes, the merch changes without knowing their artists, the concert ticket pricing, etc.
If that happens to SM artists after they get acquired by HYBE what then??? https://t.co/VaEUIBlZED
— JP | Crazy about scoops (@mingyubuns) February 20, 2023
Interestingly, fans may not be the only ones concerned. In a recent news piece, one K-Pop industry insider suggested that several artists from SM Entertainment may be thinking of leaving the company following HYBE’s share acquisition.
Employees seem to share similar sentiments, with 85% of surveyed SM Entertainment staff stating that they disapprove of the merger. Last month, 208 employees made a collective statement expressing their support for SM’s current leadership, which opposes what they’re calling HYBE’s “hostile takeover”.
Why SM opposes Hive’s hostile takeover https://t.co/fIDPaPJbti
The reason why SM is against HYBE’s hostile takeover https://t.co/FrrYdV7xln #SMTOWN #SMentertainment
— SMTOWN (@SMTOWNGLOBAL) February 20, 2023
At the same time, there are fans who feel excited about the potential benefits these acquisitions may introduce to the industry. One of them could be the increased resources that the artists under these labels could receive. Another positive in the eyes of K-Pop fans is the possibility of more collaborations between the labels, giving rise to more artistry and content.
Now I need Red Velvet, Fromis 9, Aespa, Le Sserafim, New Jeans collab https://t.co/jcTrBXJnVu
— •~• (@giinngger) February 10, 2023
Plus, a full merger between HYBE and SM Entertainment would, in a way, revert K-Pop to its roots. For several generations, the industry was dominated by what’s known as the “Big 3”: SM Entertainment, YG Entertainmentand JYP Entertainment. These three agencies have produced some of the most popular acts in history, from Shinhwa to BLACKPINK to ITZY. Following the success of BTSHYBE then rose from a little-known agency to a major player in its own right.
Few fans were opposed to this three-point structure, and it hasn’t stopped artists from other agencies (for example, acts like IVE and MAMMOO) from seeing success. If HYBE were to fully acquire SM Entertainment, K-Pop would likely return to a “Big 3” format, with HYBE in SM’s place.
proof that mamamoo don’t need to be on that big 3 companies to be successful TALENT is enough. https://t.co/o08s8XPyqE
— Mary (@FEARLESSHWASA) January 31, 2023
Either way, with so many major labels now under HYBE’s umbrella, it’s only natural to wonder what this could mean for the future of K-Pop. Will styles and sounds really become homogenized, or will we see a new era of K-Pop more innovative than before? Only time will tell.