There has been an article in circulation declaring the financial stance of SM Entertainment and it goes something like this:
SM Entertainment in Deficit for the Past Two Years
Friday, March 13, 2009 Korea
In the morning of March 13th, South Korean media reported that the past two-year deficits for Korea's SM Entertainment company reached around to 1.62 billion won for the year 2008.
According to reports, SM's profits from TVXQ, Super Junior and Girls' Generation net grossed 43.4 billion won. Despite this, there is still a deficit of 1.6 billion for the year.
However, profits for SM in 2008 has grown 30% compared to 2007, but because of BoA's entry into the American market, and because most of SM artists are groups, each event required much more travel/transportation fees and personal management fees than usual. Therefore, despite there was a higher revenue in 2008, SM still reported a deficit year-end.
SM has full confidence in pulling out of deficit at the end of 2009. With BoA's first album in the American market, and the Korean activities for Super Juniors and Girls' Generation, SM's financial situation must improve.
That article has been a source of a lot of discussions and from a word from our wonderful staff I found out that some have even declared that "SM is lucky to have the Gee craze". I guess the article and those comments have driven me in to writing a semi-expose in regards to them.
In response, I think it's best to state that "SNSD are superbly lucky to have the SM dirty tactics team on their side".
This "Gee craze" has been the biggest self orchestrated "craze" to ever have graced our humble planet. Everything about it was so "text book" and predictable, their marketing team knows what to do yet unfortunately, probably due to pressure, their timing is their downfall.
What happened with Jang JaYun was a supreme tragedy, yet it should have at least opened the eyes to some, of the dirty, disgusting and downright despicable world of show business. Not everyone is lucky enough to be under a large label that doesn’t have to send out their stars to get gigs, but it also doesn’t mean that the reason they have to do that is not obvious. The simple fact that the small rate companies force their talents to meet with execs is because some companies have such "pull" that it's hard to get a chance to break in, however talented a talent truly is.
It’s unfair; the sordidness of their actions is unforgivable, but that only cracks the door open in to the world of showbiz. What I’m getting at is, a company such as SM, big name label, with big name stars under its belt, should not be in the red for such a long time. Logically, it doesn’t make sense.
SM is a public limited company; they have shareholders, a board of directors to answer to and a lot of artists that bring in money. Just looking at the market without looking at the details, SM should be raking it in. The SK market is tiny compared to others, but a lot of the stars take a large share of the wealth that goes in to that industry. So doesn’t it make sense, that since SM is a Korean company, a part of the Stock Market, that if they have such a large share of the industry, why aren’t they getting any profit?
It's been going wrong for years, but SM has been keeping afloat for a few talents... namely, Super Junior, DBSK and BoA. Those artists have been in demand ever since they had their rise to fame. Super Junior has been split up in to plenty of sub groups, done a lot of solo work and sent abroad, but the point is, that nearly all of them have had steady jobs and large opportunities through out. The Yen has always been stronger than the Won to some extent, and DBSK and BoA make a lot of money in Japan, yet they are under contract with Avex. So, a percentage goes to Avex naturally, BoAs Avex contract probably means that SM do get to keep more than they used to, since BoA has been in Japan for a long time and guarantees a hit, DBSK is just starting to pay back what they owe to Avex per se. What that basically means is, although DBSK and BoA make a lot of money in Japan, the majority does not make its way back to Korea, not forgetting how long it took the boys to make it in Japan.
I know I’m taking a while to explain things, but y'all need to have the facts straight in order to get to the real point. With their biggest acts out of the country or subsequently out of "action", they needed someone to pull some weight in the industry and keep the SM name alive and kicking. And that was, dun dun dun, SNSD. SNSD was doing well in the beginning and getting them their money from their market audience, even pulling in from different target audiences with their well hidden pedo-bait theme but with a "girl power" song to start with. You can really see the downfall pretty much after 2 months of their debut. I must admit, SM had a good idea where they were going, but they were sloppy with their training and picking out the "right" members. They pretty much missed what they were so successful with with Super Junior. I don’t know if you guys remember way back when, but when Super Junior first debuted there were a lot of things said similar to "why do they have 12 members, what are they trying to hide? They must all have little talent...” or along the lines of. Yet Suju went on to prove their worth as individuals and as a group. When they first came out, I was actually really impressed, yes the number was ridiculous, and the debuting of such a large group was bold, but they offered something some groups couldn’t... An opportunity for most young girls in their target audience to find a guy to their liking, be it one or all 12 (later 13), it was a genius marketing strategy, developing a group to suit most tastes with different images for all.
Anyhow, in essence, SNSD were meant to be a female version of Super Junior, yeah SM do that a lot, but that was their idea from the get go, but somewhere down the line, SM realised that their target audience was simply not gonna cut it. They found that they were attracting a clientele that was going to not simply buy their merchandise from time to time, but do it as obsessively as the fanboys. The FanAjoushis.
Now, I’m not saying that they didn’t plan to bank on them form the beginning, far from it, they were bound to get a percentage from that target audience seeing their choreography and image. But not to the extent that they had found out, SM discovered that the over 30s market was willing to not only spend some money on their girls, but a heck of a lot. So you can say, that SHINee was a direct result of that discovery too, it's all in the debut song. And it explains their sudden introduction to the music scene.
Ok, I swear Imma get to it all now, the biggest reason why SNSD have been pushed on to us so much, and that all goes back to Dream Concert. Often I have to detach my fan bias to see things in the business sense, and once I do, I can tell why SNSD are being shoved down our throats more now. Actually, my fan bias has nothing to do with my business mind... :p Now, Businesses rely a lot on their public image to make money; they rely on the favor of the public in order to keep making a profit. You've heard it a lot no? That the fans make the idol, the public favor makes the President, the customer is always right? So, when something as large as Dream Concert happens where your "talent", is silenced by the majority of the crowd, something doesn’t bode well, does it? I'm not going in to the reasons behind DC, cos that's been done to death, but I'm going to show you the SM Entertainments side to DC.
Simply put, it was an utter disaster, similar to the proverbial walls crashing down around you when you come under crisis. People started asking "why", and a lot of things came to question in regards to SNSD. "Why" indeed. SM prides itself in being one of those that are large contributors to the Hallyu wave, they fly in Harvard Business School students for private lectures with old Lee SooMan himself, and MIT, and just recently they claimed that Harvard Law School students were coming to learn the "Gee" dance from SNSD. Since when did Harvard Law have anything to do with SM, or better yet SNSD? I can only draw up one conclusion; SNSD may be their future clients.
Kidding aside, if you try so hard to impress the public and make out as if you are the best, why are you being protested against, in such an unforgiving manner? Dream Concert is the most publicised event in the Kpop calendar; it's free and for a good cause. So why did the youth involved pick for it to be staged at that event, why did the youth involved bother to organise such a large event, such a large cry of disgust and injustice? Those questions were thrown towards SM, the media asked them, the public asked them, and what followed was some shaky responses and twisted propaganda from SM through use of an Mnet "documentary".
Now within the walls of SM, what were they saying? The Board of Directors would have obviously not been happy. After all, SNSD is under the care and management of SM, no one else is responsible for letting things get so out of control, what’s even worse, is that those that protested consisted, in their majority of fans of fellow SM artists. SM were forced to prove themselves, hence the long absence of SNSD afterwards. Prove themselves perhaps to not only the rest of the country, (they’re still a public limited company after all), but to the unbearable pressure of the Board of Directors and other key shareholders.
SM has had failures before, but they have tried immensely hard after the debut of Super Junior to never go down that road again, and have by record succeeded. After all, no one since then has disbanded as of yet, have they? ;) To those that pride themselves on winning, to those that have made a name for themselves as the 'best', they needed to show the world that SNSD were 'forgiven', that those that protested against them were simply acting on petty thought and jealousy. And which they have done, just look at the SMTownLive cover-ups, all of them happened so quickly and with precision, to defend their name and to make themselves look more favorable to those that mattered the most, their investors.
What I’m getting at is, SM does not see SNSD as something so awe-inspiring, something so talented to keep them afloat. SM has started to see SNSD as the company that they desperately want the world to see as successful and thriving. It's a simple psychological insight, the desperation they seem to have with making SNSD look like such a great group, insisting they are the top dogs in the industry, waiting for their key competitors to leave the scene as to strike. It's actually all quite clear when you take the time out to look at it from an objective stance. After all, SM may find it hard to admit, but clearly JYP and YG have grown to such an extent that they stand on the same levels now, as opposed to SM being the top of the hierarchy in the idol business. I guess that’s also translated in to SNSDs inferiority complex to the Wonder Girls.
Yes, SM does sell more CDs, but the other companies make more on digital sales. Key difference, SM pay more on each individual CD made, what with all the gifts sent out with them and the numerous versions. But, the truth still stands; SM is the one that's being documented of being in debt.
SM can only go down that road for so long, concentrating on the progress of one group and clearing their name has only made their problems worse. As their efforts to make themselves still be seen as "the company to beat", they have neglected other artists and fans. Something that they failed to realise is perhaps one of the most vital reasons of the SNSD boycott and as a result the public shaming of SM Entertainment themselves. It pains me to admit that the DBSK and Super Junior comeback are an indication of that neglect. One can argue till the cows come home that DBSK had sold the most CDs last year and have commendably sold a lot, yet to those that follow the market and spending habits of those in that target audience, they hadn’t sold what they could have. Simply put, whatever number DBSK would have sold, you have to split that up to the versions they released, and that would be 3. Because in essence, the typical fan of the idol market would buy all versions of CDs for sake of support for their artists, for bragging sake or for their collections. So for a true market analyst, they would realise that the demand has declined, now the reasons for this in detail demand more time and attention to do it justice and I'll set that aside for now. In Super Juniors case, it would have to be said that the sign that they didn’t achieve the number one spot immediately, it shows that something is going wrong. After all, aren’t idols meant to take charts by storm every comeback? Isn’t that how you show the true impact of an idol?
My point I guess in this article is to show you guys just what a gesture like Dream Concert can really have, and to not always trust simply the media representation and publicity stunts that are thrown around. As a PLC, a company in the Kosdaq, SM need to try and seem like they’re always getting the most attention, that their stars are making the biggest impact in the industry. Lately, when you notice them overcompensating with SNSD, and orchestrating with media propaganda the "Gee craze", that is a clear indication that they’re making up for something that was so damaging.
Every little moment and action of defiance counts. ;) And SM is paying for it and failing to see the right answer to all their problems, as simple as it is, their fans should be their number one priority. If they continue down this path, they will be dragging down what took years to build, and self-ruin is nothing to brag about.
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Thanks to queenbee for bringing to my attention, the endless idiocy and lack of sense of the InS♥nes. Not that I didnt know that in the first place. :3
Last edited by __acidandr0id on Sun 22 Mar 2009, 6:27 pm; edited 3 times in total (Reason for editing : typos are the devil :3)
Wonderful work! 
i ♥ you Bento :]
STUPID INS<3NES
) - so that they'll be able to lure in other potential investors. Yeahhhh right...
