So apparently there’s been some interest in a post made recently on a Korean forum.
One of the claims made in that post is that SM Entertainment are planning to debut or introduce two more acts in the coming year (or next).


This is actually not brand new information. There are always rumours about these things of course, but I’ve personally seen solid evidence from their side back in January.



Many are interpreting it as it being two new idol groups, since that’s what the forum post says.

That seems a little odd. SM have taken twelve of their finest males out of the academy and are investing a lot of money and effort to promote them in both domestic and international market, so another new boy group seems a little premature. If they do, it would be at best, ill-advised from a marketing and product quality point of view.

As much as some people like to deride SM Entertainment idols for a “lack of talent”, there is a significant amount of investment required for a group of kids to be able to perform at an acceptable level. Given the huge amount of money spent on the debut hype of a group to maximise exposure and chance of success (the endless teasers and promotional material from EXO should be pretty vivid in everyone’s minds even now), backing a group of unprepared trainees with that volume of capital would be like playing Russian Roulette by yourself.

The possibility remains that one of the projects could be a new female idol group, since the last time they had a debut was with f(x) and that was several years ago. That would seem to make more sense in the marketing and product quality point of view.

Another new boy group would be ill-advised from a marketing and product quality point of view.

The fact that EXO have a dedicated Chinese unit from debut and are releasing songs at a similar rate as their Korean counterparts, combined with SM’s continued belief that China is the next big market, all point towards the “mainstream male idol group” slot in the SM roster not being available for any more new faces. A duo or trio catering to a slightly different target market, maybe, but nothing that overlaps with their current active artists.

The re-emergence(?) of Henry and getting him more stage experience is even more indication that SM have China on their minds, as well as them returning to existing talent to create new IPs. Going forward, that means sub-units and solo activity. We’ve already had tentative confirmation from Tiffany that TaeTiSeo will be making a comeback. All of this points towards a certain policy direction within SM management.

The two new acts to debut? Well, I’ve had some people commenting that perhaps Henry was the first of the two. He would fit in with the profile of a new “act”, certainly, and his solo debut came after much of the more credible rumours began. However, the new evidence claims that the two new acts will be a group of rookies.

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How likely that is, I’m not sure. I certainly haven’t seen any information from my side to say that those two new IPs will be groups of rookies.

Political squabbles and territorial disputes between Korea and Japan pose problems for K-Pop companies.

Taking it back to the more general outlook, SM is continuing to be very profitable but expectations are high.

There has been concern over the state of the Japanese market, with the weakening Yen and the relative lack of concerts there tightening up revenue streams. Some analysts are saying that Japan’s economy is set to improve however, so there are tentative higher hopes than earlier this year on a solid income.

Still some concerns exist, due to political squabbles over revisionist teachings and territorial disputes being likely to have some negative impact among those with the most disposable income. I’m not going to take sides on who is right or wrong here, but the financial results for businesses reliant on fickle consumers will be pretty black and white when it comes to counting up the losses and gains.

They have also spent quite a significant amount on investment in SM Entertainment Japan, and SM C&C’s video content production investments. And as was discussed and pored over at length by fans, their acquisition of Woollim, which was rumoured to be in financial trouble, will hit short-term margins pretty hard.

But it should be noted that in the first eight months of 2013, Japanese concert attendance will be over 1.5 million. That’s compared to 900,000 in the whole year of 2012. That is a lot of money.

Not only that, the proportion of this concert attendance being in Domes/Stadia has risen by 37.9 percentage points, where payout/royalties are higher than regular concert halls per fan. This means that there are twice as many bums on seats, and with those seats earning more money per bum.

That is a lot of expensive bums.

Some of the many owners of said expensive bums.


Concerts revenue in general is looking to be up. We’re already double last year’s number, without including the Girls’ Generation, Super Junior and SM Town concert activities outside of Japan.

As I’ve been saying over and over again, SM is focusing heavily on China as a future growth market with YG half-heartedly hot on their heels. Expect some more heavy investment here in the second half of the year.

With all of that in mind, SM are expected to have their strongest quarter in Q4.


And finally, unless someone has already done it in my absence, I can also exclusively reveal that last year, the composer Andy Love of Girls’ Generation ballad “Time Machine” fame, has sold a song called “Sit Down” for use by SHINee in Japan. Something that I hinted at earlier but couldn’t really talk about at the time.

Later, I’ll write a bit more about what just happened with SM C&C since that story deserves a piece on its own.


As always, take with a pinch of salt. I’m just another guy, writing his opinions, based on things he’s heard and seen. I won’t take responsibility if you foolishly decide to act on any material that I communicate and lose financially or otherwise. However, in the unlikely case that you do gain a lot financially, I would like a pat on the back. And an ice cream.




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