S.M. Entertainment (Hangul: SM엔터테인먼트) is a South Korean entertainment company established in 1995 by Lee Soo-man. It is currently one of the largest entertainment companies in South Korea. The company operates as a record label, talent agency, music production company, event management and concert production company, and music publishing house.
The label is home to prominent K-pop artists such as BoA, S.E.S., TVXQ, TRAX, The Grace, Super Junior, Girls’ Generation, SHINee, f(x), EXO, Red Velvet, NCT, and formerly to pioneering groups H.O.T., Fly to the Sky, and Shinhwa. It also manages a number of actors, including Kim Min-jong and Lee Yeon-hee. In Japan, S.M. Entertainment co-publishes Avex Trax releases for artists including Ayumi Hamasaki, Namie Amuro, and Koda Kumi, as well as Johnny’s Entertainment artists such as Arashi and KAT-TUN.
In 2015, S.M. Entertainment had reported revenues of KR₩325 billion (approximately US$287 million) and a net income of KR₩21.7 billion (US$19 million).
In 2016, Alibaba Group acquired a 4% controlling stake in S.M. Entertainment.
1989–2000: Creation and first generation artists
After graduating from California State University, Northridge in the United States, Lee Soo-man returned to Korea and established ‘SM Studio’ in Apgujeong-dong, Gangnam, Seoul in 1989. The business changed its name to S.M. Entertainment and set up its capital fund in February 1995 with Jung Hae-ik as CEO. The agency developed an ‘in-house’ production system and produced a string of successful artists including boy group H.O.T. in 1996, girl group S.E.S. in 1997, Shinhwa in 1998, and R&B duo Fly to the Sky in 1999. Kim Kyung-wook became CEO of the company in 1998.
2000–2005: Affiliations and second generation artists
The early 2000s saw the disbandment of both H.O.T (in 2001) and S.E.S (in 2002), as well as the departure of Shinhwa to a new agency, and in the following years, new groups such as duo Isak N Jiyeon and boy group Black Beat failed to attain the popularity of previous S.M. artists. In December 2000, S.M. became affiliated with Fandago Korea. In January 2001, the company founded an overseas division, S.M. Entertainment Japan. Around the same time, the company was approved for listing on KOSDAQ, and an affiliation was established between S.M. and Avex Trax. The subsidiaries BM Entertainment and Cid. K Entertainment (under which the girl groups M.I.L.K. and Shinvi were signed respectively) were also formed, but later became defunct as the groups disbanded.
April 2002 saw shares increase by 1,341,180, and in June, an additional 61,048 as a result of third-party capital. In late 2002, S.M. was awarded the Grand Prix of Ministry of Culture and Tourism for the Culture Contents for Export Award in music.
In 2003, S.M. became affiliated with Starlight Corporation Ltd. and C-Cube Entertainment Corporation. The same year, the company debuted five-member boy group TVXQ. The following years saw the debuts of artists such as TRAX (2004), The Grace (2005), and Super Junior (2005).
2005–2010: Expansion and international artists
In 2005, Kim Young-min became the company’s third CEO, under whom several artists debuted with a view to promoting outside of South Korea. Artists debuting under S.M. at this time were solo singer of Chinese descent Zhang Liyin (2006), Japanese-language soloist J-Min (2007), Girls’ Generation (2007), SHINee (2008), and f(x) (2009). In April 2008, a Mandarin-language subunit of Super Junior was formed, Super Junior-M. In October 2008, S.M. announced plans for a debut in the United States for BoA under subsidiary label SM Entertainment USA.
In May 2008 the SM Art Company was formed with Pyo In-bong as co-CEO, aiming to produce musical and theatre works. Its first production was of Xanadu, which starred Super Junior members Heechul and Kangin.
2010–2012: Joint and further ventures
In February 2010, after two decades on the board of directors, founder Lee Soo-man resigned from his position in order to “focus more energy on SM’s overseas business, new business management and artist development”. In March, KMP Holdings was established as a joint venture between S.M. Entertainment, YG Entertainment, JYP Entertainment, Star Empire, Medialine, CAN Entertainment and Music Factory. The firm’s first release from S.M. was Super Junior’s fifth studio album, Mr. Simple, which marked the end of S.M.’s self-distribution. In May, S.M. announced its highest ever first quarter operating profits, at KR₩10.4 billion, up 471% from the same period the previous year. Gross revenue was reported at KR₩22.7 billion, a 58% increase on the previous year.
In April 2011, S.M. Entertainment, YG Entertainment, JYP Entertainment, KeyEast, AMENT, and Star J Entertainment joined to create ‘United Asia Management’. In August, S.M. joined with Thai media company TrueVisions Group to create ‘SM True’.
In 2012, S.M. debuted boy group EXO in two units to promote in both Korea and China. In February, S.M. acquired Hawaiian travel firm Happy Hawaii and launched a new business initiative specialising in travel and tourism, SMTown Travel, with Kang Jung-hyun as CEO. SMTown Travel offered concert packages for overseas fans attending Super Junior’s Super Show 4 Tour encore concerts in Seoul. In March, 47 of S.M.’s artists including Kangta, BoA, TVXQ, CSJH The Grace, Super Junior, Zhang Li Yin, Girls’ Generation, SHINee, f(x), Go Ara, Isak, and Lee Yeon Hee became stockholders of S.M. Entertainment. Kangta, BoA, and most of the Super Junior and Girls’ Generation members received 680 shares each (with a value of around US$27,200 for each person), while SHINee and f(x) members received 340 shares each (value of around US$13,600 for each person). In August, S.M. held the S.M.ART EXHIBITION at the COEX Convention & Exhibition Center and signed contracts with Visa and KB Card to begin printing S.M. artist cards. Korean TV personalities Kang Ho-dong and Shin Dong-yup announced that they had signed exclusive contracts with S.M.’s broadcast sector, SM Culture & Contents (SM C&C), seen as a move by S.M. to expand into television. In September, SM C&C merged with AM Entertainment (which represents actors such as Jang Dong-gun, Kim Ha-neul, and Han Ji-min) and two other TV personalities, Lee Su-geun and Kim Byung-man, announced that they had also signed with S.M. In November, KMP Holdings was acquired by KT Music, and in June 2013, KT Music absorbed KMP’s distribution network.
2013–present: Third generation artists and International K-pop academy
In 2013, SM C&C acquired Hoon Media (a production company led by Lee Hoon-hee, responsible for KBS serials 1 vs 100, Heroines 6, Qualifications of Men, and Music Bank) and Woollim Entertainment, a record label responsible for artists such as Infinite. In January 2014, the seven talent agencies behind KMP Holdings formed a collective bond partnership and bought 13.48% of KT Music‘s stocks, leaving parent KT Corporation with 49.99%. In February, S.M. acquired a share in Baljunso, an indie record label founded in 1991 by Kang Byung-yong. On August 1, S.M. debuted Red Velvet, its first girl group since f(x) four years prior.
In August 2015, S.M. partnered with sports marketing company IB Worldwide to create Galaxia SM, responsible for golfer Park In-bee, gymnast Son Yeon-jae, and Choo Shin-soo, right fielder for the Texas Rangers. On November 6, the 10th anniversary of Super Junior‘s debut, S.M. announced the creation of the group’s own sub-label, Label SJ. The company also set up a series of stores selling branded foods under the name ‘SUM Market’ and opened the restaurant SMT Seoul.
In January 2016, Lee Soo-man held a conference at the SM Coex Artium, speaking about plans for a new boy group, NCT (“Neo Culture Technology”), with “unlimited members”. The first unit of this group, NCT U, released its first singles in April 2016. On May 5, S.M. released the first single under their newly established EDM label ScreaM Records, “Wave”, featuring f(x) members Amber and Luna and produced by Xavi & Gi and E-mart’s Electro Mart. ScreaM Records is part of S.M.’s New Culture Technology 2016 project, under which the company has also begun the digital music channel SM Station and a number of mobile apps. In late 2016, S.M. began organizing a League of Legends tournament called “2016 S.M. Super Celeb League”, where their representatives Heechul and Baekhyun participate in matches with both professional players and fans from South Korea and China.
On February 16, 2017, a source from the task force in charge of the international K-pop academy has plans to open this upcoming September. The Gangnam-based academy is a collaborative venture with the private Jongro Sky Academy. Plans for the school to be certified as an alternative program for domestic Korean middle and high school education, as well as US secondary school education, are also underway.
SM Entertainment’s YouTube channel, SMTOWN, has 10 million subscribers. It’s the most number of subscribers for a music label from all of Asia.
In late July 2009, three of the members of S.M. Entertainment boy group TVXQ– Kim Jaejoong, Park Yoochun, and Kim Junsu– applied to the Seoul Central District Court to investigate the validity of their contract with S.M., as they felt the thirteen-year contract was excessively long and that earnings were not fairly distributed to the members; but leaving the group would lead to an early termination penalty of over KR₩11 billion (around US$9.2 million). The news of this dispute caused S.M. Entertainment’s KOSPI stock price to drop by 10.06%. In addition, 120,000 fans of TVXQ filed a petition against S.M.’s long-term contracts to the Seoul Central District Court, also filing for compensation for an SMTown Live Concert that was canceled a week before its scheduled date.
Their statement read, “(They) have had health problems and finally reached their physical limits, but SM Entertainment continued to send them abroad and plan excessive activities. Thus, the three members have started to hope they will be able to continue their careers as they wish, instead of being used as tools for the agency’s profits.”
The court ruled in the favour of the three members. In response, S.M. held a press conference claiming that the lawsuit was fraudulent, and filed an injunction. In early May 2010, it was announced that the three members, Jaejoong, Yoochun and Junsu, would return to stage as JYJ under a new management agency, C-JeS Entertainment. The injunction was dismissed by the Seoul Central District Court on February 17, 2011, and the final decision on the case was postponed indefinitely for mediation under the justice department.
On November 28, 2012, during a voluntary arbitration at the Seoul Central District Court, S.M. Entertainment and JYJ reached a mutual agreement to terminate all contracts between the two parties and not to interfere with each other’s activities in the future, concluding the lawsuit. S.M. reportedly stated that they had decided to end the litigation “to avoid bringing additional harm to U-Know Yunho and Max Changmin, who are active as TVXQ, and to avoid making any more unneeded issues”.
On December 21, 2009, five months after the three TVXQ members filed their lawsuit and while the dispute was ongoing, Han Geng, the only Chinese member of Super Junior, also filed a lawsuit against S.M. for similar reasons of unfair profit distributions and having signed an unfair thirteen-year contract that contained provisions in S.M.’s favour and that he was not allowed to revise or end. Han Geng’s friend and current manager Sun Le also submitted a statement to Korean courts citing S.M. Entertainment’s violation of Han Geng’s rights, which was later leaked via the internet. The statement argued that S.M. had discriminated against Han Geng financially as well as in terms of management.
On September 27, 2011, Han Geng’s departure from Super Junior was made official when legal representatives of both Han Geng and S.M. released a joint statement saying that “Han Geng and S.M. Entertainment have amicably settled on a mutual agreement, and the lawsuit was able to come to a close after Han Geng submitted his ‘Notice of Withdrawal of Appeal’.”
On May 15, 2014, Kris Wu, a Chinese-Canadian member of EXO, filed a lawsuit to terminate his contract with S.M., as first reported by Chinese news portal Sina. He was represented by Cho Bum-suk, the same lawyer that handled Han Geng ‘s case. Kris, whose real name is Wu Yifan, was quoted as saying, “The company has treated me like a machine part or as an object of control rather than presenting a vision as an entertainer”. He left the group in the same month that the lawsuit was made public, while the rest of the group continued to promote its single ‘Overdose’. On July 21, 2016, Kris, officially parted ways with EXO, however, the contract with SM is valid until 2022.
I was excited about our upcoming fan events only to shockingly be informed by my company and 8 others that as of today, I’m no longer a member. I’m devastated – my priority and love is to serve as a member of GG, but for no justifiable reason, I am being forced out.
On October 10, 2014, Lu Han was the second Chinese member of EXO to file to nullify his contract with S.M. Entertainment and leave the group, just over four months after Kris. His lawsuit included the claim that S.M. had favoured Korean division EXO-K over Chinese division EXO-M. Within 15 minutes of the announcement, company stocks had dropped by 9.41%, from KR₩37,000 to KR₩33,250 per share. The stock’s worth contracted by 15%, hitting the maximum decrease in price KOSDAQ allows for a day, and falling to a more-than-one-year low. On July 21, 2016, Lu Han, officially parted ways with EXO, however, the contract with SM is valid until 2022.
In April 2015, No Min-woo, a former member of TRAX, filed a lawsuit against S.M. for subjecting him to an unlawful seventeen-year contract. No alleged that S.M. had also interfered with his career after he had left the company and sought KR₩100 million in damages. Noh Min-woo lost lawsuit against SM Entertainment on July 21, 2016.
On August 24, 2015, Tao was the third Chinese member of EXO to file against S.M. and leave the group, being represented by the same legal team that represented former members Kris and Lu Han. On the 5th of January 2016, SM entertainment won one of their counter-lawsuits against Tao following the ruling of the Intermediate People’s Court in the Qingdao, Shandong, in China.The agency sued Tao over his failure to repay the company after his departure. They released an official statement saying “SM has ongoing lawsuits against Exo members Wu Yifan (Kris), Luhan, and Tao for violating their exclusive contracts and partaking in illegal promotions in China. Among these lawsuits, SM filed a lawsuit against Tao for failing to repay SM on October 13, 2015. An intermediate court in Qingdao, China made the verdict that Tao is to repay SM Entertainment as well as interest for the delayed payment.”
2009 MAMA Awards boycott
On November 21, 2009, S.M. Entertainment boycotted the Mnet Asian Music Awards event, claiming reservations regarding the standard of fairness and the criteria used in Mnet‘s selections for award recipients. The company specifically cited Girls’ Generation, who had topped Korean music charts for nine consecutive weeks and had won numerous awards for their newest single “Genie“, but had never won on Mnet’s weekly M! Countdown show, and had only appeared on their charts a month after the album release. S.M. also cited the fact that voters had to pay a fee, saying that they did “not want to see fans suffer any damage from the poll which has commercial intentions.”
Fair Trade Commission scrutiny
In 2010, the Korean Fair Trade Commission (FTC) undertook an investigation into S.M. Entertainment policy, especially regarding their artists’ contract terms, and concluded that they were unfair. Artist contracts were subsequently reduced by a length of three years, and there was a reduction in the penalties for breach-of-contract violations. All the artists signed under S.M. at the time re-contracted with the agency under the new terms.
S.M. was also one of fifteen companies fined and sued by the FTC for price rigging in 2011.
In 2012, S.M. was accused of colluding with music distributors, but was cleared of the charge. On August 16 the Seoul High Court revealed their verdict on the issue: “The FTC (Fair Trade Commission) has canceled all corrective orders against SM Entertainment, and the lawsuit costs will be paid by the defendant.”
Red Velvet music video controversy
In August 2014, after the release of the Red Velvet‘s music video for “Happiness,” Japanese media reported that images referencing the bombing of Hiroshima and Nagasaki, as well as the 9/11 attacks, were seen in the background of the video. S.M. Entertainment responded to the reports, stating that “after questioning the director, we found that he simply used a collage source for the images, and there was no intention behind it.” The representative added, “As S.M. wasn’t able to catch it before, we will remove the material that caused the misunderstanding as soon as possible. We will make sure not to let this kind of thing happen in the future.” S.M. later uploaded a new version of the music video without the controversial images.
All artists under S.M. Entertainment are collectively known as SMTown.
- Zhang Liyin
- Zhou Mi
- The Grace (inactive indefinitely)
- Super Junior
- Girls’ Generation
- Red Velvet
- Super Junior-K.R.Y.
- Super Junior-T
- Super Junior-M
- Super Junior-Happy
- The Grace-Dana & Sunday
- Super Junior-D&E
- Girls’ Generation-TTS
- NCT U
- NCT 127
- NCT DREAM
- Kim Kyung-sik
- Hong Rocky
- Lee Dong-woo
- Kang Ho Dong
- Lee Cheol-woo
- Ki Do-hoon
- Gregory Hwang (Performance Director)
- Shim Jae-won (Performance Director)
- Shin Soo-jung
- Mihawk Back
- Rino Nakasone
- Liu Yuan
- Wang Yajun
- Zhou Weijie
- Lin Xinye
A group of S.M. Entertainment trainees have appeared in various promotional materials and activities under the name “S.M Rookies“. Some former S.M. Rookies have “graduated” to form the groups Red Velvet and NCT. Official trainees under S.M. that have yet to debut include:
- Hansol (born 1994)
- Kun (born 1996)
- Yiyang (born 1997)
- Jungwoo (born 1998)
- Lucas (born 1999)
- Koeun (born 1999)
- Hina (born 2000)
- Herin (born 2002)
- Ningning (born 2002)
- Lami (born 2003)
- Hyun Jin-young (1990–1993)
- Han Dong-joon (1991–1992)
- Kim Kwang-jin (1991–1992)
- Major (Seo Yeon-soo and Im Bum-jun, 1994)
- J&J (Jay Kim and Jay Kang, 1994)
- H.O.T. (1996–2001)
- Shinhwa (1998–2003)
- Fly to the Sky (1999–2004)
- Jang Na-ra (2001–2008)
- M.I.L.K (2001–2003)
- Sugar (2001–2006)
- Black Beat (2002–2007)
- Shinvi (2002–2003)
- Isak ‘N’ Jiyeon (2002–2004)
- Kim Jae-joong (2003–2009)
- Park Yoochun (2003–2009)
- Kim Junsu (2003–2009)
- Kang Jung-woo (2004–2006)
- No Min-woo (2004–2009)
- Han Geng (2005–2009)
- Jessica (2007–2015)
- Kim Kibum (2004–2015)
- Stephanie (2005–2016)
- Kris (2012-2014)
- Luhan (2012-2014)
- Tao (2012-2015)