Naver Invests in SM Entertainment
[#TewsdayNewsday]
Naver, South Korea’s biggest portal site, is about to become the second-largest shareholder of SM Entertainment, one of the “big three” entertainment agencies, after its CEO, Lee SooMan.
Back in April, the two companies signed a Memorandum of Understanding (MOU) to collaborate in global promotions. Although both firms are currently in talks about this acquisition, it is estimated that Naver plans on investing approximately 100 billion Won (nearly $83.5 million), the same amount invested in YG Entertainment back in 2017.
The investment is only another move in the game of expanding Hallyu, or “Korean Wave,” to global markets, a move that has been in the works since the mid-1990s. In addition, it hopes to host more virtual K-Pop concerts and other live streaming during the ongoing pandemic.
The IT giant hosted its first online concert series in April, “Beyond Live,” in collaboration with SM Entertainment which featured a different group each Sunday. Boy group SuperM, the first concert in the series, drew 75,000 worldwide viewers, while the last show, Super Junior’s, garnered 123,000 views. Their ticket sales increased from 2.5 billion to 4 billion KRW. However, compared to BTS’ 756,000 streams on their YouTube concert, which totalled to 22 billion KRW in revenue, Naver knows they have a long way to catch up.
BTS previously has used Naver’s V Live platform to stream performances. Having lost them to YouTube was a hard hit, which could have contributed to the decision of investing in SM Entertainment.
Established in 1995, SM Entertainment, home to Red Velvet and EXO, is one of the “big three” entertainment agencies in South Korea, with the other two being YG Entertainment and JYP Entertainment. BTS’ label, Big Hit Entertainment, is not part of the “big three,” but they sure house the most successful K-Pop act to date.
With the aim of expanding the global presence of K-Pop, collaborations between online platforms and entertainment companies have become more prevalent in recent years. In 2016, Kakao, South Korea’s biggest mobile messaging app operator, Kakao, acquired Loen Entertainment back in 2016, now known as KakaoM. Loen was home of IU and operated Melon, the largest streaming music service in the country.
Later this year, Kakao expects to release a video platform through its app, KakaoTalk, offering content owned by KakaoM and its subsidiaries.
The COVID19 pandemic has halted all tour activities for artists and performers around the world, causing entertainment companies to restructure and find new ways to generate revenue and provide fans with content.