What the Heck is Going On at SM Entertainment?


NCT? STATION? ScreaM? If you’ve been following Kpop news, you’ve likely come to the realization that something major is going on over at SM Entertainment. With so many press releases, stories, and rumors coming down the wire, it’s necessary that we take a step back and try to sort through this. There’s got to be some good news in here, right?

New Group - NCT


NCT, or NEO Culture Technology (neo from the Greek, “neos,” meaning “new”), should debut in Spring of 2016. Putting aside the awkwardness of NCT’s name, the real awkwardness comes from calling NCT a “group” at all. NCT is not so much a group as a way of doing business. It’s a (potential) model for the future of Kpop that would change the way we think about individual membership in groups. The best description for NCT is that the group “will have no limits on the number of members, nor limits in nationality, and they will take the stage all around the globe” (source). There’s three pieces of information there, and if it helps, imagine Lee Soo Man giving a PowerPoint presentation on stage going through each bullet point, because that’s basically what happened.

First bullet point: no limit on members. This is where the traditional Kpop model starts to bend. And there’s more to this comment than meets the eye. Even though there were 40 masked members on stage during Lee Soo Man’s presentation, SM Entertainment isn’t trying to create just another mega-group; they are trying to introduce the concept of fluid group membership. We’re used to our groups having set lineups. Disaster seems imminent any time membership changes are made. But SM obviously believes this is the old way. Just like many of us were dragged into the streaming era of music kicking, screaming, and clutching our compact discs, SM here is asking us to let go of this obsession with static group membership. There will be many NCT groups, and SM seems to be asking us not to think about them as subgroups either. With many opportunities for collaboration between the groups, SM will allow for “movement of members” (source). Those potentially exciting collaborations and member changes seem to be the big selling point here, but will something be lost in all the changes? If we had to guess, we’d expect this new model will focus fan attention much more closely on individual performers. After all, if there’s no set NCT group, then fans will need to find their favorite members to latch onto.

Second bullet point: no limit on nationality. This is where the traditional Kpop model starts to break. Even though we’ve gone to great pains to suggest that Kpop is a genre of music above all else, there is no escaping the fact that Kpop has a racial element. Up until now, there has been an unwritten rule that Kpop artists must be Korean, and if not Korean, then Southeast Asian (Rania’s Alex may have been the first indication that this rule was on the way out). The majority of artists being of Korean descent makes a certain sort of sense so long as the market for Kpop rests in Korea and Southeast Asia. It makes much less sense if the market is global. Which brings us to the third bullet point.

Third bullet point: members will take the stage all around the globe. Let’s get one thing straight here: Lee Soo Man is not talking about a random, once-off tour organized by fan votes. SM Entertainment is suggesting that members of NCT will perform across the globe as a matter of course. The first NCT group will focus on Korea and Japan, with the second group in China. But Latin America was called out as a future target as well. The market for NCT will not be Korea, but the entire planet. A lofty goal, to be sure, and one that could easily be emblazoned on the masthead of any Kpop entertainment company. But there’s an actual plan here, and to get into it, we need to move to slide two of Lee Soo Man’s presentation (transition: dissolve).


In slide two, Lee Soo Man gives us his three-step system to “truly localize Hallyu.” Put a pin in that word localize for now so we can focus on the program more generally.

Step 1: advance Korean stars into the international market

Step 2: collaborate with local companies to bring international stars into the domestic Kpop market

Step 3: collaborate with local companies to enable Korean groups to debut in the local market (source)

This, if you’re an accountant, is the most interesting part of SM’s plan, because here we see the framework of a business model for the whole NCT venture. TL;DR: SM plans on making money, accountants rejoice! But the details might not be transparent to you yet, so let’s try and break this down further. SM Entertainment is creating NCT as a loose collection of individual artists. Those artists can then be grouped and portioned out to various markets across the globe based on their talents and, presumably, language skills. Much like Exo before them, NCT will sing one song in many different languages (source). But this goes much further than Exo ever did, because Exo was based on the old model: identify a market and try to corner it. NCT will have the flexibility to target any market their sponsor wishes. Wait, what?

Exo, and every other Kpop group out there, exists mainly to sell music under the direction of SM Entertainment. Everything else (advertising deals, product placement, etc.) is cream off the top. NCT will create great music as well (and I plan on buying the hell out of their best stuff), but NCT, and how do I put this kindly, will exist to earn sponsorship deals. As an example, if a Brazilian company wants to sell their new sports drink, a NCT group may pop up in Brazil. Make no mistake, this scenario is only possible with the creation of a new kind of Kpop group with fluid, international membership. NCT will perform their music, sure, but they’ll also be there to sell. And it might not be so insidious as it sounds. Maybe they’ll produce a few episodes of a reality show where they play a lot of shirtless volleyball on the beach (OMG, abs.), and who wouldn’t appreciate that? There will just happen to be a lot of a certain brand of sports drink in the episode.


That’s where this whole idea of localizing Hallyu comes back into play. When Kpop companies talk about being international, they’re talking about convincing people across the globe to buy a product that is designed for someone else (Koreans). To localize Hallyu means to develop a product specifically for those various regions. NCT will “produce content especially tailored for their particular markets,” and they are expected to engage in “joint ventures” with local companies (source). According to Lee Soo Man, "this is the last stage of the Korean wave.” Indeed.

With so much focus on the economics of NCT, it’s important to take a step back and recognize that all pop music is designed to sell something. If you’re a proponent of capitalism, there’s nothing wrong with that. And if you’re still drooling over the thought of NCT members playing volleyball in swim trunks, you’re probably just wondering how to get an oppa based in your city, ASAP. But if NCT works, and if it takes the world by storm, we could be witnessing the start of a truly globalized music with a completely centralized command structure. For a fatalist, this might suggest a possible future in which all culture is determined by a handful of “taste-makers.” Do I sense the plot of the next great dystopian novel?

All doom and gloom aside, the first NCT group with debut in Spring of 2016 with a team centered in Korea and Japan. A Chinese group will debut in late 2016 with more locations and groups to come. NCT is about to burst onto the scene, ladies and gentlemen, so hold onto your butts!

STATION Project

In that very same presentation on January 27, Lee Soo Man also released information about STATION, a digital music channel where SM will release a new single once per week, for 52 weeks. Next to NCT, this announcement is not nearly so groundbreaking. There’s plenty to get excited about, yes, but Lee Soo Man’s description of STATION as “overcoming the existing system of singles…[to] create a new ecosystem of digital songs” is a bit of an overstatement. (source)

One aspect of STATION that a lot of fans are making a big deal about is the information that each of the 52 singles will be released on a specific day of the week (so far there are only rumors about which day). This isn’t new or surprising, though. To be eligible for weekly music shows, Kpop music release dates were already constrained. Worldwide, there have always been recommendations for which day of the week new music should be released (in America, music Tuesday recently changed to Friday to increase sales). Releasing music on the same day each week is...very normal. In fact, it’s the only way to ensure an accurate system to chart the most popular music (something Korea has long struggled with). Likewise, the promise of 52 weeks of new music is...surprisingly specific, but also not that exciting. Will STATION disappear exactly one year after it starts? Probably not. 52 is just a number.

Taeyeon - “Rain” Teaser

What should get you excited about STATION is the focus on solo releases and collaborations. SM Entertainment is overflowing with talented artists, and more music is definitely something to get excited about! The first to release new music on STATION will be, duh!, Taeyeon, with her new single, “Rain.” It’s hard to imagine a better ambassador for a new product or one with such seemingly assured success. Based on previous reports, we can guess at some other STATION releases. SM previously reported new solo releases by Super Junior’s Ryeowook (source) and f(x)’s Amber (source), so those seem like easy bets. Hints of solo activities from SHINee and EXO have also made the rounds. I’m sure we’ll hear more from SM in the near future about which artists and collaborations we can expect on STATION.

ScreaM Records

Finally, and almost as an afterthought to the major news above, SM is creating an EDM record label that will house DJs and producers. As a news item from an entertainment company, this isn’t big news. It’s a way to organize company assets to ensure focus on a specific division. Yes, expect more EDM from SM in the future! End of press release?

As a way to make this very pedestrian announcement sexy, Lee Soo Man let it slip that they would be working with Skrillex to create some collaborations with SM artists. If that gets you going, cool. If not, no big deal. Nothing life-changing here.

4 comments:

  1. NCT and Boys 24 just sound like Korea has recognized AKB48s success in Japan and wants to take the model, expand it and spread it everywhere they can. But things that works in Japan don't always work elsewhere...

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  2. Ok, so SM hired a bunch of consultants and decided to go BIG! And I appreciate this isn't just one idea but a holistic business plan.

    Having NCT as a brandname, rather than a 'group' is clever. It means no star is bigger than NCT and departing members no longer pose a threat. Besides the foreign partnerships, this concept is actually key to managing a number of overseas artistes; experience has it that foreign talent seems harder to keep. I'm just curious as to SM's timeline for introducing the NCT's 'girl equivalent'. And does this mean that Red Velvet is SM's last 'conventional' group?

    The STATION project keeps SM in the public eye all year round. And an international chain of cafes/restaurants is a great move in related diversification and promotes name recognition.

    All this sounds wonderful, but the scale and execution will be a nightmare. Respect to SM! Going global is very ambitious and incredibly tough, but I'd like to see them try!

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  3. Great description "NCT is not so much a group as a way of doing business". Just realised that this concept allows SM to remove weak members and likewise, slot trainees into NCT without any fuss.

    Without needing to create new groups, SM can now debut individual trainees anytime and how it pleases. Now that's powerful!

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  4. Really interesting and ambitious plan. Will be watching to see how SM Entertainment implements this.

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