SM Entertainment: how a failed hip hop bet built the K-pop idol factory
In 1989 Lee Soo-man opened a small studio in Seoul's Apgujeong and signed a hip hop singer whose career collapsed after a drug arrest. Burned, Lee pivoted to carefully trained idols with spotless images, and the renamed SM Entertainment went on to launch H.O.T., BoA, Girls' Generation and Exo, helping ignite the Korean Wave.
Lee had studied at California State University, Northridge before starting SM Studio and signing Hyun Jin-young. When Hyun's arrest was followed by the bankruptcy of his album distributor, the company lost even more. Borrowing from Japanese idol culture, Lee built an in-house system that handled every stage of a career and aimed squarely at teenagers. The business took its current name in February 1995, then produced H.O.T. in 1996, S.E.S. in 1997, Shinhwa in 1998, Fly to the Sky in 1999 and BoA in 2000.
That year SM became the first entertainment firm on KOSDAQ. The early 2000s were bumpy: H.O.T. split in 2001, S.E.S. in 2002, and Shinhwa left. With the home market slumping, SM looked abroad, forming a Japanese arm with Avex Trax and Yoshimoto Kogyo in January 2001 to break BoA there. TVXQ appeared in 2003 and Super Junior in 2005, and under third CEO Kim Young-min came Girls' Generation, Shinee, f(x) and a Mandarin-language Super Junior-M in April 2008.
Lee stepped off the board in February 2010 to concentrate on overseas business. In 2012 Exo debuted as two units so it could work in Korea and China at once, and SM bought a Hawaiian travel agency to sell concert packages to foreign fans. That March, 47 of its singers became shareholders: veterans such as BoA received 680 shares each, worth about US$27,200, and newer acts 340. Red Velvet followed on August 1, 2014.
In January 2016 Lee unveiled NCT, a group with unlimited members, whose units NCT U, NCT 127 and NCT Dream all debuted that year. On February 11, 2016 Alibaba paid US$30 million for 4% of the company. The China-focused WayV arrived in January 2019, and SuperM, a supergroup built with Capitol Music Group, debuted that October. During the pandemic, SM and Naver launched Beyond Live in April 2020, streaming concerts to viewers in more than 200 countries.
Source: SM Entertainment
