SM Entertainment’s future plans to expand their enterprise

[miuratenshi.livejournal.com]

Hallyu’s leading enterprise SM Entertainment will be aiming to add value to their company by not only producing albums, but distributing them all over Asia. They will be officially making their breakthrough in China with their new Chinese boy group EXO-M. And although most artists make most of their overseas profit from the Japanese market, SM plans to break free from the mold and attempt to be successful in China with the release of EXO-M.

MK recently held an interview with representative Kim Young Min from SM Entertainment who said, “I guess you can say that we have constructed the market conditions so that now, we can create a music format to break into the Asian market. Our goal this year is to launch into the Asian market, collaborating with corporations in China and Japan. We are keeping all of our options open, and reviewing them over carefully.”


SM Entertainment is looking to grow their profits through the distribution of music. “We will only be distributing digital music, and not physical CD’s. There will be more opportunities for business after launching our musical library.”

Although 90% of the profits made overseas are solely from sales in Japan, SM Entertainment is looking to change that this year with their new boy group, EXO.

There will be two halves to EXO, EXO-K, and EXO-M. EXO-K will be mostly Korean, while the members of EXO-M will be mostly of Chinese descent. Both teams will be making their debut at the same time. This is the first time that SM Entertainment will be releasing a brand new rookie group in China. Previously, they had added two Chinese members added to Super Junior, creating Super Junior-M to promote in China.

“The image of the SM Entertainment brand has grown to a point where we are acknowledged enough to release a rookie group in China,” Kim continued. The Chinese market has a high profitability rate for things like advertisement and management. If advertising rates in Japan are $100, it would be $120 or $130 in Korea, while China would be the highest at around $200. With China allowing more free streaming and downloads, profits from digital music is increasingly growing.

Kim continued, “Compared to America and Europe, Asia is still the best market that yields the most efficient results,” and that’s where SM plans to work on a lot of side projects. ”The US market is still a bit risky, and if it was a market that yielded the best results compared to what we invested, we would have jumped into it without thinking twice.”

But it doesn’t mean they will stop promoting in the US or Europe. K-pop is becoming a hot trend in both the US and Europe, and even just looking at the iTunes charts, anyone can see that Korean music is readily growing more and more popular. SM Entertainment does have plans to further reach out to the American and European demographic and distribute digital music overseas to garner more profit. “20% of our Facebook visitors are foreigners,” he said, optimistic about future growth.

SM Entertainment artists will also be taking part in drama series and musicals. “We want to get more of our artists to focus on acting this year,” he added. He also believes that SM Entertainment will have a fruitful year advancing into new business territories.

“We will continue to do business without the need of any loans, and once the funds are secured, we will work to continue to expand our enterprise,” he said in closing.


Sources & Image : allkpop and MK News

Distributing only digital music sounds like a bad idea, SM.

Comments

[baka-tenshi.livejournal.com]

i just want sm to stop with the repackages - not the physical cds, jfc.

[ideservestars.livejournal.com]

agreed, stop repackages and recycling songs (throw in their lazy mvs). maybe then they'd see better sales.

[harukazepanda.livejournal.com]

SM just can't stop doing stupid things...

[jaejoong.livejournal.com]

SM CD packaging is always a bit boring anyways, so no real loss imo

Though they have always been bigger in physical sales, so I don't see how this can be a smart move for them...

[kyuhyunss.livejournal.com]

SM should also be more ethical with how they promote their stars, and better yet... how they treat em! (NO MORE 13 YEAR SLAVE CONTRACTS ON THE KPOP STARS THEY MANAGE OKAY?)

[cairistiona.livejournal.com]

They don't have any tho? Their contracts were changed already years ago.

[caribgirl98.livejournal.com]

They changed the contracts last year after the FCC told them to make changes.

[wigglybob.livejournal.com]

This

[brooke.livejournal.com]

[scubajr.livejournal.com]

Why would they stop selling physical CDs?
Ohh SM......

[frantastic.livejournal.com]

I thought SM's boybands did horribly in digital sales? Why would they do that :|
Fans love to collect stuff anyways

[stesabsea.livejournal.com]

Their strong point is physical sales though. SME won't just turn their back on the fans that throw their wallets at the company in return for objects they can hold and collect.

[miki-831.livejournal.com]

yeah out of the big 3 sment does the best in physical sales. I am not understanding their thought process.

[erbalurbal.livejournal.com]

I'm pretty sure there is a translation error there. I think he's saying that they are going to focus more on digital releases outside of Korea/Japan. Honestly it seems more cost efficient than shipping physical albums that won't sell. SM isn't dumb enough to transition their entire company to a digital format when they have most of the top physical album sellers.

[bulleusekat.livejournal.com]

That's what I've also understood.

[hangingover.livejournal.com]

that's what i took from it as well

[underthepines.livejournal.com]

That's a pretty shitty translation error to make, since it's a direct quote and sort of really important and everything >_____< akp fail.

Your translation/reading makes much more sense (business/logic-wise--I don't know Korean so I can't judge on that)--they want to increase digital sales because they're weak and its an important market (plus, it'll help their artists get more wins on more music charts, probably?), but they're also aware that their hard copy sales are extremely important because, well, fans will be fans, and fans like pretty shiny special things.

[funkaliciousss.livejournal.com]

oh but korean albums sells heaps here in Singapore.

[stillwaiting.livejournal.com]

Not selling physical albums will fuck over SuJu so bad since they make their career off selling their physical albums. They suck when it comes to digital sales unfortunately.

[say-o-kay.livejournal.com]

No, I want my cards. :(((

[coffee-ika.livejournal.com]

omg mte ;;

[dorkiilove.livejournal.com]

HE LOOKS LIKE VANESS WU IN THAT PICTURE.

[hitsujiga.livejournal.com]

this will be bad for groups like shinee who are weak in digital sales...no? but they'd save a lot of production costs i guess :/

[lee-chikin.livejournal.com]

“20% of our Facebook visitors are foreigners,”
I highly doubt only 20% of FB are non-korean. Do they think "foreigner" means "non-asian" or was this a translation error?

SM, I thought we all agreed that kpop isn't about music, give us physical merchandise.

[raviolikenshin.livejournal.com]

Yeah I thought "foreigner" fans made up 100% of visitors lol

[funkaliciousss.livejournal.com]

lol yea the only reason i bought the mr taxi repackage was because of the photos (and someone was giving me a ridiculous discount)

[drfaith101.livejournal.com]

lol

[taylorniw.livejournal.com]

Considering how the market is becoming more and more digital, and how album sales aren't that great in Korea in the first place, going all digital doesn't seem like a bad idea. It's definitely where the market is heading.


plsno to more SM acting though

[riddlemedoo.livejournal.com]

Haven't they break through China already with Super Junior - M?

[nissy-angel.livejournal.com]

Not really, alot chinese still don't give a fuck about SJM.

[donutism.livejournal.com]

They hate sm after hangeng left

[shineesbright.livejournal.com]

Tangible albums that i can ~ hold, caress & place in bubble wrap bags afterwards prz or no monies!

[asnindie.livejournal.com]

SM HDU!!!

YOU'RE JUST GOING DIGITAL SO YOU CAN DESTROY EVERYONE'S OPPAS SUPER JUNIOR. YOUR PLAN TO RUIN SUJU WON'T WORK!!! ELF TRANSFORM IN TO THE MEGAZORD!!!

But seriously they must not be making money from Digital, I think the fans will be fine, they'll just start bulk buying digital singles, infact it'll cost them less.

[metafictionally]

LMAO SM WHAT

I honestly hadn't even realized there were industries that SME hadn't already expanded into.

[keeleym.livejournal.com]

I think what this means is that they're still gonna sell physical albums, they just aren't distributing them themselves anymore. SM used to distribute their own CDs but now KMP Holdings does it.

As for digital sales, I think I remember reading something about them creating their own version of iTunes. That's what Genie is, I think.

http://www.korea.net/news.do?mode=detail&guid=60484

[quietreveries.livejournal.com]

yeah i'm pretty sure this is what they mean. lol like they would stop producing CDs

[yellyell.livejournal.com]

Well if they want to do that I can't stop them. I don't buy anything digital though and will just take it instead of purchasing it like I do with physical releases. So if they want to release just digital music whether it be in the US, China, Japan, or Korea they will lose my money and another company will gain it.

[modernabsurdity.livejournal.com]

I thought I was the last person standing who hadn't gone digital! I love my physical copies too much. :(

[funkaliciousss.livejournal.com]

mte. and i buy the physical copies cause i love being able to hold it in my hand. hahaha.

[suzieeq-luv.livejournal.com]

“We want to get more of our artists to focus on acting this year,”

Mmmmm. No thanks.
Unless its Sulli.

[aaalove.livejournal.com]

bad idea all around sm. take risks come to America.

[yekaste.livejournal.com]

Me wants photocards and posters... And why should I bother downloading digitally when I can just illegally download it or it is share online somewhere..

But I guess I can buy xxxxxx number of singles digitally compare to a single cd with shipping fee

[miki-831.livejournal.com]

I like buying physical cd's better than digital downloads. I feel like I am getting more for my money.

[vizallati.livejournal.com]

nuuu. i like collecting the physical cd's even tho i basically just take out the cd once to import it and never again. i like looking at the photos inside the case too if i'm bored /o\

[funkaliciousss.livejournal.com]

YAS TO MORE ACTING! I WANT A SM TOWN VERSION OF GLEE WITH KANGTA AS MR SCHUE.

[earenya-beryl.livejournal.com]

What? no big ass album for me to hug when I go to sleep?
I paid what I paid (and waited for everything to be shipped from freaking Korea) so that I can hold it in my hands. I want physical albums~!