[Opinion] Chairman Bang's Multi-label Strategy and its Bankruptcy?

Author: JUNG Hojai | K-pop Columnist

Date : 2024.April.26

I want to preface this article with a disclaimer: My first review on Facebook, written two months after NewJeans' debut, openly expressed my admiration and support for producer Min Hee-jin. Therefore, it's important to acknowledge that this piece may be perceived as advocating for Min Hee-jin, regardless of the arguments presented.

My fascination with the captivating new girl group, NewJeans, in the early summer of 2022 stemmed not solely from their association with Hive, but rather from their unmistakable connection to K-pop's esteemed SM Entertainment. It's about authenticity, tracing back to an aesthetic lineage. SM laid the groundwork for K-pop, and as with any pioneering endeavor, it involved immense trial and error. While some may hastily dismiss S.E.S. as mere imitators of J-pop, every aspect, from songwriting to performances, involves countless deliberate decisions. It's a skill honed through extensive trial and error.

The success stories of groups like S.E.S., followed by The Grace, Girls' Generation, f(x), Red Velvet, and AESPA, essentially encapsulate the history of K-pop girl groups, with only 2NE1, BlackPink, and TWICE as comparable contenders. Indeed, SM has become the definitive benchmark for the generation of K-pop girl groups, with Min Hee-jin, born in 1979 and a 20-year veteran of the company, emerging as a successor to the K-pop King, Lee Soo-man.

1. The Peculiarity of Girl Group

Previously, there was a notion that girl groups represented a unique cultural product originating from Asia, perhaps tinged with a sense of Orientalism. Indeed, the market has long operated on the principle of "popularity for girl groups and fandom for boy groups." While it's acknowledged that generating substantial revenue with girl groups can be challenging, the value of "popularity" as a commodity is invaluable and arduous to attain in the market. Given their significant recognition and popularity, girl groups hold considerable importance in the K-entertainment industry.

Korean girl groups have evolved into iconic symbols of their respective eras. Notably, the post-1997 decade of Korean pop culture is epitomized by groups like S.E.S. and Finkle, whose influence transcends generations, albeit not solely in terms of sales or profitability, but in terms of their symbolic impact. The second generation of K-pop, represented by Girls' Generation and 2NE1, laid the groundwork for the overseas expansion of K-pop, while the third generation, including TWICE and BLACKPINK, ascended to global stardom.

Unlike British pop history, which was largely dominated by male bands like The Beatles, Queen, and Oasis, the globalization of K-pop has been spearheaded by remarkably girl-centric groups. This is underscored by the rarity of male groups achieving the level of success attained by BTS. Apart from BTS, few people in Korea can recall the names of members from other boy groups. The level of recognition beyond their fan base is notably low, with only a minority able to name more than three members of top-selling groups like Seventeen, including myself."

2. Hard to make successful

In the K-pop market, there was a prevailing belief or strong anticipation that girl groups would find success overseas more easily than boy groups. The assumption was rooted in the idea that "who can resist a pretty girl from Asia?" This is why Bang Si Hyuk, often regarded as the king of K-pop, had a plan for a girl group from the outset, even before BTS. Despite his repertoire spanning from ballads to hip-hop, Bang Si Hyuk had already staked his company's reputation on girl groups prior to BTS. The challenge and subsequent failure of Glam serves as a typical example of the previous paradigms.

Bang Si-hyuk's inclination towards girl groups stemmed from the belief that they represented a cultural code synonymous with "popularity," yet there was another obstacle to overcome. Established companies like SM, YG, and JYP had already set the archetype for K-pop girl groups, making it incredibly challenging for newcomers to break through, even with the backing of a heavyweight like Bang Si Hyuk. While Hybe, with its foundation as a global company, managed to introduce strong female idols like G-Friend from a smaller company, and saw significant success with Lesserafim and ILLIT, their true prowess in the K-girl group market has always been more nuanced.

Beyond the BTS-centric label 'BigHit,' Hybe's ascent to a conglomerate worth over 10 trillion won became feasible with the debut of 'Newjeans' in 2022. It's undeniable that the driving force behind this success was none other than Min Hee-jin, a 20-year veteran girl group craftsman with roots in K-pop's cornerstone, SM Entertainment. The recruitment of Min Hee-jin represented HYBE's "key solution" to their monumental success. Following the massive triumph of Newjeans in the girl group sector, the company swiftly evolved into a global music and entertainment powerhouse, boasting a multi-label lineup of idols spanning various genres, including BTS, Newjeans, Seventeen, and T.X.T, among others."

3. The double-edged sword

The core issue here revolves around the characteristic of girl groups: famouseness and popularity. Unlike boy groups, where multiple bands can coexist and share the market, girl groups face inherent challenges for Entertainment company. It's nearly impossible thing for a K-pop company that to successfully manage more than three or four girl groups simultaneously. The number one group in the girl group sphere tends to dominate across all age groups, making market dominance highly concentrated in different to K-boy groups.

When Newjeans claimed the number one spot since the summer of 2022, it essentially captured nearly half of the market share. Automatically, competitors like SM's "AESPA" and JYP's "ITZY" faced significant setbacks. The relationship between "Newjeans" and "Le Seraphim" became competitive and even more to be cannibalization. Introducing another similarly conceptualized girl group "ILLIT" would have defied Min Hee-jin's logical sense; focusing on Newjeans as the HYBE's flagship was the strategic choice.

This conflict also played out between "Newjeans" and "Le Seraphim," which debuted simultaneously. Bang Si-hyuk notably favored Le Seraphim, sparking an open rivalry with Newjeans. However, market response favored NewJeans. While it might have made sense from HYBE's perspective to diversify with various girl groups, for the mother company, however, for Min Hee-jin the past two years since Newjeans's debut represented a prolonged struggles not to easy to overcome.

4. Money Rules?

The press conference on April 25th shed light on the mindset and mental state of "K-pop queen" Min Hee-jin. It's evident that she lacks CEO experience in pursuing significant financial gains systematically and lacks experience in board management within legal frameworks. While renowned as a "girl group artisan," she's accustomed to old-school, manual production and management methods from the early 2000s, which is remaining closely tied to the management style of the previous SM's Chairman Lee Soo Man.

In contrast, HYBE's CEO Park Ji-won has been in business since 2009, serving as the CEO of Nexon's business division and affiliates. HYBE Chairman Bang Si-hyuk, a Seoul National University graduate and ex-JYP producer, has built a 10 trillion won company with calculated precision. The clash between these two persons and groups represents a collision of vastly different management philosophies and styles for the next K-pop.

Furthermore, the company goals and visions of Min Hee-jin and Bang Si Hyuk diverged significantly. For Min Hee-jin, "Newjeans" was akin to her child and religion, while for Bang Si-hyuk, the success of conglomerate "HYBE" itself represented his ultimate goal. This disparity made the clash seem inevitable and predestined. Throughout the press conference, Min Hee-jin mentioned terms like "stock options," "put options," and "professional embezzlement," indicating a lack of comprehensive understanding. Similarly, her emotional comment, "How can you dream of a rebellion with 18%?" seemed disconnected.

5. Inevitable Battle?

Some perceive this incident as an extension of the "Fifty Fifty" situation, lamenting its negative impact on K-pop. Over the past three days, I've eagerly awaited Min Hee-jin's response, and to some extent, I've found it surprisingly positive.

The history of pop music is rife with internal conflicts. Even within the Beatles, Paul McCartney and John Lennon were known rivals, while manager Epstein clashed with EMI. Eventually, the Beatles broke away, founding their own label, 'Apple Records'. Similarly, within Queen, vocalists and guitarists sparred over money, song selection, artistic direction, and group identity. Yet, from these conflicts emerged iconic songs and historic performances.

HYBE's abrupt decision to part ways with Min Hee-jin by using the suing of breach of trust was shocking. However, their public audit and Min's bold counterattack have sparked nationwide debate. While it may appear contentious, I view it as a necessary and ultimately beneficial step of struggle in K-pop's evolution.

PS.
1. In my 2011 interview with Bang Si-hyuk, he articulated his vision: 'K-pop girl groups are competitive in the global market, so I want to make girl groups more successful than boy groups

2. Whether or not Min Hee Jin's grievances could be deemed as "malfeasance in office" is a matter that could potentially lead to a complex and sensitive legal dispute. Hopefully, both parties can reach an amicable resolution.

3. Ultimately, in my point of view is that Min Hee-jin's concerns can be understood within the framework of the history of girl groups in K-pop over the past 30 years. It appears that HYBE has failed to persuade her of the broader perspective.