Kwangya fans fear HYBE takeover

March 13, 2023

“What’s happening now is really worrying for us fans who stan artists under SM kasi if K-pop gets monopolized, pwedeng nang iset yung prices ng merchandises and concert tickets higher [than it is now]. And that is bad news, especially that the audience they have is mostly comprised of students,” Shane Vinluan, 18, an NCT fan and a student from Arellano University said.

South Korea’s tech giant Kakao emerged victorious as HYBE Entertainment backed down on March 12 after a month-long takeover battle of K-pop’s powerhouse music agency, SM Entertainment. Fans clamored amid the rising tension in the business side of K-pop as the fiasco coaxed negative implications for artists under SM Entertainment. In Manila, where K-pop has made it into the mainstream, the magnitude of the debacle was strongly felt as fans expressed grief.

The fate of the much-loved SM groups remained hanging on by a thread before it all snapped from the heightening tension of the ordeal.

Lee Soo-man, who founded SM Entertainment, is considered a pioneer in the K-pop scene after masterminding various artists since the early 2000s. The music agency was one of South Korea’s top three K-pop agencies, with globally popular K-pop acts like EXO, Red Velvet, and NCT, in its roster. And his move of selling a fraction of his shares to HYBE after being estranged from SM Entertainment caused an uproar.

And in Kwangya, the parallel world of the SM Culture Universe created by SM Entertainment, residents panic as they witness the battle unfold.

KWANGYA TEMPORARILY CLOSED

With HYBE hypothetically acquiring SM Entertainment on top of its latest acquisitions Source Music, Pledis Entertainment, and KOZ Entertainment, it sparked concerns of monopoly in the K-pop market.

“We will never know what will happen to our ult[imate] groups, if madidisband sila or what, so nagwoworry talaga kami,” De La Salle University student Sophia Cimatu, 21, and a Red Velvet fan said.

Among the most worried are the fans of Aespa, a girl group under SM Entertainment, due to a supposed release of new music on Feb. 20 being pushed back indefinitely as fans take it to Twitter to express their dismay.

Tensions simmer among these artists, and such is the case when Seulgi, a member of the group Red Velvet, declined fans' request to dance to “Hybe Boy” at a recent fan event. “Hype Boy” is a popular song by NewJeans, who happens to be a group under HYBE.

TITANS’ TUSSLE

9th of February is when the turmoil unfolded after HYBE, a South Korean multinational entertainment company established in 2005 that houses K-pop acts such as BTS, Seventeen, and Le Sserafim bought 3,523,420 common stocks of SM Entertainment owned by Lee Soo-man. Before the deal, Lee Soo-man was the largest shareholder of SM Entertainment and possessed an 18.46% stake in the company.

Through the purchase, it catapulted HYBE to be the largest shareholder of the company.

“Actually, I was bothered kasi there’s an ongoing fandom fight na talaga between HYBE stans and SM stans, so this happening made SM artists a target among HYBE stans to further bash and throw hate towards them,” Rosvie Perez, 22, and a CFAD student from the University of Santo Tomas said.

“The company is going through a lot right now," were SHINee’s Key’s words to fans, expressing his distress of wanting to conduct concerts but not sure of who he could confide with as SM Entertainment and its employees were in a state of disorder.

Perez is also a fan of SHINee. He also said that Key’s words only confirmed the impact of the fiasco on the artists.

The current CEO of SM Entertainment, Lee Sung-soo, also Lee Soo-man’s nephew, wanted to work more closely with Kakao, a ubiquitous presence in South Korea known for its famed messaging service Kakao Talk, and Korea’s largest streaming platform, Melon.

Indeed, it was Goliath versus Goliath as these business giants battled it out for a much-coveted reward.

HYBE’s decisions after acquiring other labels confused fans. On the one hand, they disbanded GFriend after taking over Source Music which earned the ire of fans yet gained praise for debuting another girl group Le Sserafim, who had a huge fan base even before the official debut because two of its members had huge fanbases.

To Bea Sesperes, 21, a GFriend fan, the sudden decision to disband the girl group shook her. “We all thought kasi at first na ang acquisition ng HYBE sa Source Music ay para maka-help maggrow ng yung company by promoting the group well, since nasa malaking company na sila. Pero since this is still business, it turns out na yung pag-acquire nila with Source Music along with other companies ay para mabawasan sila ng competitor. Kasi these groups have the potential to outstand yung groups na dine-debut nila,” she said.

“It wouldn’t be correct to say that we’re trying to take over the whole industry,” HYBE’s chairman Bang Si-hyuk said in an interview with CNN, denying the monopoly accusations.

Despite this, some fans remained unsure and doubtful as such a statement may change over time or, in their own lingo, will “not age well.”

VICTOR

The battle among giants continued to broil, and with minority shareholders possessing a 63.55% stake in SM Entertainment as of last year, triumph can only be determined by their choices.

As spectators of the highly-publicized takeover battle await the fateful day of March 31st, when the annual general meeting will take place, an unexpected final blow shocked them when, on March 12, HYBE waved the white flag and backed down from its conquest to acquire SM Entertainment after reaching a deal with Kakao.

The deal is still undisclosed to the public.

“We are actually relieved kasi this stopped from monopolizing K-Pop. SM is a big company in fact kasama sya sa BIG 3 wala pa HYBE nandyan na SM, and losing such a big company would mean losing a part of our lives,” Sesperes said.

Kakao, hailed as the victor, guaranteed SM Entertainment’s autonomy and independent operations, citing the reason that the K-pop agency’s “strongest assets and driving force are its employees, artists, and fandoms.”

SM Entertainment also released a statement thanking its shareholders, fans, employees, and artists who rooted for the triumph of the company until the end despite the confusion that transpired.