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Kakao Entertainment

Gamma., Kakao Entertainment and SM Entertainment have formed a strategic global alliance to launch British boy band dearALICE, the companies jointly announced on Tuesday (Nov. 26). The pact will include global distribution in the U.S., U.K. and Korea/APAC, along with label services across A&R, production, marketing, promotion, brand sponsorships and global business development.
dearALICE’s formation was documented in the six-part BBC One series Made in Korea: The K-Pop Experience, which was produced by Kakao, SM and British production company Moon&Back Media (The X Factor, Britain’s Got Talent). The show followed the group’s five U.K. members — Blaise Noon, Dexter Greenwood, James Sharp, Oliver (Olly) Quinn and Reese Carter — as they embarked on a 100-day K-pop-style training regimen at SM. An original soundtrack album from the show was also released.

The parties came together in L.A. to finalize the agreement. Those in attendance included Larry Jackson, co-founder/CEO at gamma.; Joseph Chang, co-CEO at Kakao Entertainment and CEO at SM & Kakao Entertainment America; Jung Min Choi, chief growth officer at SM Entertainment; Kevin Nishimura, COO at SM & Kakao Entertainment; Ben Cook, president of UK & Europe at gamma.; Russ Lindsay, co-founder at Moon&Back Media; and all five dearALICE members.

Trending on Billboard

dearALICE is slated to release its official debut single by the end of this year.

“I have found that it is a superpower in life to embrace the truth of ‘I know what I don’t know.’ I have always been intrigued by the music and culture coming out of South Korea, and to now partner with Kakao Entertainment and SM Entertainment on dearALICE affords gamma. an opportunity to learn from THE BEST in that culture,” said Jackson in a statement. “We are already finding a special creative kinship with Joseph, Kevin and their teams. Our ideations are very much aligned albeit informed by different life experiences, from disparate corners of the globe.”

Jackson continued, “The cleverness of creating this show, it premiering on the BBC in the U.K., and bringing this extremely talented group to the world by way of it, was their idea, and we are thrilled to be a part of it. Kakao Entertainment and SM have always been purveyors of true, patient artist development in Korea, and I have deeply respected their approach from afar. Expect to hear a lot from dearALICE in 2025.”

“Our partnership with gamma. represents an exciting step in our ongoing strategy for the successful launch of dearALICE,” said Chang. “Collaborating with a label of gamma.’s stature, known for its deep industry expertise and innovative approach, allows us to accelerate our efforts in bringing forward dearALICE to audiences worldwide. dearALICE stands out as a truly distinctive project for our company, blending British roots with the global reach and creative influences of Kakao Entertainment and SM Entertainment. We believe this collaboration will unlock new opportunities for the group to thrive internationally, while also showcasing their groundbreaking artistry to music fans across the globe.”

Added Lindsay, “What an amazing twelve months it’s been for the boys! From being cast in December last year, to experiencing a unique and unforgettable 100 days of K-pop training with SM Entertainment in Korea, then premiering a 6-part Saturday night BBC One TV series in the summer, followed by the Made in Korea: The K-Pop Experience Original TV Soundtrack EP release and a superb live performance on the UK’s highest-rated entertainment show, BBC One’s Strictly Come Dancing! It’s a testament to their incredible hard work and passion that sees them sign a major global recording and distribution deal with gamma., joining a stable with some of the world’s most talented artists and music executives.”

K-pop giant HYBE sold a portion of its stake in rival South Korean music group SM Entertainment worth $50 million, or roughly 3% of the company, according to a filing made public on Tuesday (May 28). Though it sold roughly 755,500 shares worth 68.4 billion Korean won, HYBE still owns some 2.2 million shares comprising […]

K-pop giant HYBE purchased 868,948 shares of SM Entertainment, the company behind such acts as aespa and NCT 127, for approximately 104.3 billion won ($78 million) after SM founder Lee Soo-man exercised an option to sell the shares, HYBE announced in a Feb. 28 regulatory filing. The purchase concludes a transaction that briefly created a […]

Kakao Entertainment nominated two executives to serve as co-CEOs on Friday (Jan. 19): Kisu Kweon, who is currently chief operations officer, and Joseph Chang, global strategy officer. 
The South Korean tech conglomerate Kakao is influential in the music industry. Its subsidiary, Kakao Entertainment, merged with Melon, the country’s top streaming platform, in 2021, and it also owns Starship Entertainment, which has developed internationally successful K-pop groups like Monsta X and Ive. But in 2023, Bae Jae-hyun, Kakao’s chief investment officer, was indicted for allegedly manipulating stock price during a corporate battle with HYBE for a controlling stake in K-pop company SM Entertainment.

In December, Kakao’s founder and chairman said the company would “reset our expansion-centered management strategy,” “focus on core businesses,” as part of an effort to “change the company culture,” according to The Korea Economic Daily.

The promotion announcement at Kakao Entertainment emphasized “the need for leadership with a new perspective.” “We feel a great responsibility as we take on leadership during these pivotal times,” Kweon and Chang said in a joint statement. 

“Our priority is to contribute to and meet the expectations of society going forward,” they added. “At the same time, we are dedicated to proving Kakao Entertainment’s full potential in the global market. We are excited to accelerate the innovation of our expansive content business to grow as a truly global entertainment player.”

The announcement of the co-CEO nominees indicated that they would each have slightly different purviews. Kweon “plans to focus on stabilizing the business while emphasizing innovation,” according to the press release, while Chang — a former Sony Music executive — will prioritize “strengthening [Kakao Entertainment’s] competitiveness in IP planning, production, and distribution.”

Now that Kweon and Chang are nominated as co-CEOs, the announcement noted that they “will undergo a formal appointment process through the board of directors and general shareholders’ meetings.”

South Korean companies SM Entertainment and Kakao Entertainment have launched what they are calling a “local integrated corporation” in North American as part of previously hinted-at efforts to accelerate their joint stateside operations and build upon the successes of their K-pop artists in the world’s largest music market. The companies said on Tuesday (Aug. 1) […]

On April 3, Billboard broke the news that Jimin’s track “Like Crazy” reached No. 1 on the Billboard Hot 100 — a first for a solo Korean artist — while his album, FACE, debuted at No. 2 on the Billboard 200. Released by Big Hit Music, one of the labels under Korean entertainment company HYBE, “Like Crazy” currently marks the best performance by a member of K-pop supergroup BTS, whose hiatus announcement last year presented a significant challenge to HYBE’s ability to forge another chart success in the United States. “Like Crazy” reached only No. 11 in South Korea, although FACE topped album charts in South Korea and Japan.

Investors took note of Jimin’s U.S. accomplishments. The following day, HYBE’s share price on Korea Exchange rose as much as 11.4% to 212,500 won ($161) before ending the day at 205,000 won ($155), up 7.5% from the previous day (as of April 17, it had risen 40%). That was the highest closing price since June 10 of last year — three trading days before BTS confirmed it would take a hiatus, worrying investors and sending HYBE’s share price down 28% in a single day. For a company with grand ambitions to build off of the success of BTS, “Like Crazy” was an important validation.

The music industry should take note, too. HYBE did with Jimin what all South Korean music companies are attempting with increasing urgency: ride the wave of K-pop’s global success by expanding outside of Korea and build up operations in the United States, the world’s largest music market. “All the shareholders want to see the ability for them to diversify [their] portfolios,” says Sung Cho, CEO of Chartmetric and newly appointed board member of the pioneering K-pop agency SM Entertainment.

Exporting is what South Korea does best. “After the Korean War, the only way to survive was to export things,” says Cho. Over the last three decades, the success of companies such as Samsung, LG and Hyundai has turned the country of 52 million into a top 10 exporter, according to the World Bank. But in recent years, South Korea has become known not just for its exports of high-tech products and manufactured goods, but as a global entertainment dynamo as well. South Korea’s music business built its economic success into a trade surplus of about $3.1 billion for intellectual property of music and images in 2021, up from $800 million in 2020, according to the country’s Ministry of Culture, Sports and Tourism. The South Korean film Parasite won a 2020 Academy Award for best picture. A year later, Squid Game became the most watched series in Netflix history, a worldwide phenomenon that racked up 1.7 billion viewing hours in its first month.

South Korean music companies have become international powerhouses by drawing on hip-hop, R&B and pop music and selling the K-pop blend of these genres back to fervent fans in the United States, Japan and Europe. But to compete globally with larger companies, the South Korea approach to the music business, and not necessarily the music itself, could be the deciding factor. “We’re seeing not only the export of K-pop bands — the boy bands, the girl bands — we’re starting to see the export of the K-pop business model,” says Bernie Cho, president of DFSB Kollective, a Seoul-based artist and label services agency. SM Entertainment founder Lee Soo-man coined the term “cultural technology” in the ’90s for his system of producing K-pop and promoting it worldwide. Other K-pop companies have adopted a similarly disciplined, systematic approach to finding, developing and promoting musicians.

The widespread music-business anxiety about the death of artist development doesn’t apply to South Korea. Western labels fight bidding wars over viral artists with instantaneous popularity or favor proven artists and catalogs, leaving the task of building an audience to artists themselves or independent labels. In contrast, K-pop companies spend years recruiting and rehearsing talent, as well as giving artists instruction in a specific approach to the music business. “Combing through social media platforms like TikTok may give us a chance to sign artists who are technically proficient as music producers or performers, but we demand more from our artists,” says HYBE CEO Jiwon Park in an email to Billboard. That means trainees work with HYBE’s training and development department to “internalize the values of autonomy and responsibility” so they can navigate the expectations put on them.

To learn the U.S. market, South Korean companies have partnered with U.S. labels to distribute, market and promote their music. HYBE has a joint venture with Universal Music Group’s Geffen Records to create a U.S.-based girl pop group. JYP Entertainment has teamed with UMG’s Republic Records to form the global girl group America2Korea, or A2K. Additionally, Kakao Entertainment’s Starship Entertainment subsidiary has partnered with Sony Music Group’s Columbia Records to co-manage marketing and promotion of the six-member female group IVE in North America.

These U.S.-Korean partnerships have also given domestic labels a chance to learn the K-pop method of A&R. To Glenn Mendlinger, president of Imperial Music, a new division of Republic Records, the JYP partnership has provided insight into “what it is to build a fandom and foster it through immersive packaging and increasing the collectability of the products.” Mendlinger is impressed with JYP’s attention to detail and ability to build storylines for their artists. “That’s why they’re so successful,” he says in an email to Billboard. “The level of care is unparalleled and unrivaled in terms of its intimacy and diligence.”

But more and more, South Korean companies have boots on the ground and control of their destinies in the United States. HYBE is the furthest along in building out its stateside operations. In 2021, it acquired Scooter Braun’s Ithaca Holdings for $1.05 billion and named Braun the CEO of HYBE America, a genre-spanning collection of artist management and record labels that includes SB Projects, Nashville-based Big Machine Label Group and Atlanta hip-hop company Quality Control, which was acquired in February for $300 million. Those deals are “just the beginning,” HYBE chairman Bang Si-hyuk said in a speech in March. He believes building in the United States will give HYBE the “strong network and infrastructure” it needs to “minimize the cost of trial and error” and attain stronger bargaining power and distribution rates relative to local companies.

SM Entertainment, the company behind such groups as NCT 127 and aespa, and Kakao Entertainment have created a U.S. joint venture and plan to acquire a U.S.-based company to expand into hip-hop or R&B, according to SM’s road map made available to investors. Kakao now owns a 40% stake in SM Entertainment, having quelled HYBE’s attempt to buy a commanding stake and control its board of directors following a break with SM founder Lee.

South Korean music companies’ do-it-yourself nature extends to tech platforms, too. While most labels depend on the likes of Meta, Twitter and Fortnite to reach fans, HYBE owns its own social network, Weverse, and JYP and SM have a joint venture with tech company Naver called Beyond LIVE that streams live online concerts. SM also owns a social networking app, Bubble, and its artists will begin building fan communities at HYBE’s Weverse in September. It makes sense in one of the world’s most wired and wireless countries, says Cho of DFSB Kollective. In Korea, “youth culture, pop culture and digital culture are one and the same in many ways.”

For HYBE, Weverse not only diversifies its business but allows it to control how its artists communicate with their fans. With the addition of artists from North America and Japan, Weverse “will serve as a gateway to the fandom market in Asia, North America and the world,” says Park. With enhancements and new services, “Weverse will seek boundless expansion beyond K-pop.”

This story originally appeared in the April 22, 2023, issue of Billboard.

Kakao Corp. and its subsidiary, Kakao Entertainment, increased their share of K-pop company SM Entertainment to 39.9% from 4.9% after purchasing 1.66 million shares from HYBE. That left HYBE with 54% of its shares in SM Entertainment, according to a Tuesday (March 28) regulatory filing.

HYBE sold its 1.66 million SM shares for 248.8 billion won ($191.8 million), or 150,000 won ($115.62) per share, leaving it with an 8.8% stake in SM Entertainment. HYBE had planned to sell its entire stake, the company said in a Friday filing, but it did not offload all of its shares during Kakao’s tender offer. Now that the battle for control of SM is over, HYBE’s remaining stake in SM is worth less than its purchase price. With Kakao’s tender having expired on Sunday and SM shareholders no longer able to sell at a premium, SM’s share price dropped 15% to 91,100 ($70.23) won on Monday and improved slightly to 94,300 won ($72.70) on Tuesday.

SM Entertainment, home to such K-pop acts as NCT-127 and Red Velvet, is partnering with Kakao Corp. and Kakao Entertainment to expand globally as it reorganizes following a split with its founder, Lee Soo-man. Kakao Entertainment owns K-pop group Monsta X’s label, Starship Entertainment, as well as the Korean music streaming platform Melon.

HYBE acquired about 3.5 million SM shares from Lee at 120,000 won per share, according to a Feb. 10 regulatory filing. After flirting with a campaign to take board seats and some operational control in SM, HYBE changed course and conceded to Kakao on March 13. “Proceeding with a higher tender offer [to beat Kakao’s bid] may have in turn caused a negative impact on our shareholders and we also judged it may have further overheated the market,” HYBE said in a statement at the time. The company had hoped to acquire an additional 25% stake in SM at 120,000 won ($92.51) per share, but its tender offer fizzled and increased its stake from 14.8% to just 15.8%.

In the latest episode of the battle of K-pop giants, HYBE, the home of BTS, took some swings at SM Entertainment’s business partnership with tech company Kakao, owner of a popular messaging app, Kakao M, and music streaming service Melon.
On Feb. 6, Kakao announced it would purchase a 9.05% stake in SM Entertainment, whose roster includes NCT 127 and Red Velvet. Three days later, HYBE announced it would acquire a 14.8% stake in SM Entertainment by purchasing the majority of shares of the company’s founder and legendary K-pop producer, Lee Soo Man. Following a campaign by an activist investor for SM Entertainment to reduce Lee’s role, the company canceled his producer contract on Dec. 31, 2022.

SM Entertainment called HYBE’s investment “hostile M&A” and said its partnership with Kakao is “the first step” in its long-term transformation plan. HYBE sees SM Entertainment’s relationship with Kakao as one-sided and bad for shareholders.

“The contract between SM and Kakao, which grants acquisition of convertible bonds, undermines shareholder interest,” HYBE said in a statement Friday (Feb. 24). A clause grants Kakao or Kakao Entertainment the ability to “continuously increase its stake in SM” by allocating stocks issued through a paid-in capital increase to a third party, HYBE stated. “This will dilute the value of stocks owned by all shareholders other than Kakao or Kakao Entertainment.”

HYBE further argued the contract would hurt SM Entertainment’s chance of attracting “new strategic investors” and make it easier for Kakao “to seize control of SM’s management rights.”

HYBE also took issue with the Kakao’s role in managing SM Entertainment artists and distributing their music, arguing the contract gives Kakao an “unexpiring, exclusive” right to distribute SM Entertainment’s recorded music and allow Kakao Entertainment to manage SM Entertainment artists in North and South America.

In turn, SM Entertainment subsidiary SM Life Design will produce the recordings of Kakao Entertainment artists and provide a music video shooting set. “Compared with the important business rights that SM is handing over,” HYBE stated, “the return seems unreasonably small.”

After reviewing the contract’s legal issues, HYBE “will take all necessary legal measures, both civil and criminal,” it stated.

South Korea-based media company Kakao Entertainment, which owns Monsta X‘s K-pop record label Starship Entertainment, said on Thursday (Jan. 12) it raised 1.2 trillion won ($966 million USD) from a group of investors led by sovereign wealth funds.

The move signals strong investor interest in Korean music and media. Kakao Entertainment owns three other record labels in addition to Starship: Antenna, Edam Entertainment and IST Entertainment, the latter of which lists The Boyz on its roster. Kakao Entertainment also owns the leading South Korean music streaming app Melon, the North America-based webtoon company Tapas Entertainment and several media production companies and is a subsidiary of the tech conglomerate Kakao Corp.

The company plans to use the investment to “spearhead growth in K-culture worldwide,” including expanding its record labels’ reach through distribution partners and its artists’ fanbases through touring, according to a company statement.

“It’s significant that we were able to secure funds of this scale at a time when both the Korean and global markets face a lot of uncertainty and investment sentiment is weaker,” said Kakao Corp.’s chief investment officer and executive vp Bae Jae-hyun in the statement. “This is [a] testament to the global competitiveness and future growth potential of Kakao Entertainment’s unique IP value chain, which spans multiple categories in the entertainment industry.”

Singapore’s GIC and Saudi Arabia’s Public Investment Fund (PIF) each invested 600 billion won ($484 million USD) as part of the deal, the Korea Economic Daily reported earlier on Thursday. GIC and PIF did not immediately respond to requests for comment.

Kakao Entertainment will issue new shares through a third-party allotment, it said.