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HomeHeadlines Published September 09, 2012 09:41 PM EDT

Is YG Entertainment Becoming Close to Taking SM's First Place?

It is time to look at the two dinosaurs of the music industry: SM Entertainment and YG Entertainment.
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Is YG Entertainment Becoming Close to Taking SM's First Place?
SM vs. YG (Photo : SM YG)

"SM=Samsung, YG=Google." It is time to look at the two dinosaurs of the music industry, SM Entertainment and YG Entertainment. As the leading agency of K-Pop, SM Entertainment is famous for their dignified perfection. YG on the other hand is known for their emphasis on unique individuality. Professionals are speaking about the possibility of YG jumping over SM sometime in the near future.

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Either entertainment agencies dislike these types of comparisons. Both feels uncomfortable being compared to different entertainment agencies in every aspect because they believe that each agency has a unique characteristic of their own. A representative commented, "Please compare us to global companies from now on." Both YG and SM have bigger things in mind.

SM "Culture first, Economy Next"

It wouldn't be an exaggeration to say that SM Entertainment became the guiding example of the Korean entertainment agencies. Current systems within each entertainment agency in Korea were created based on the system created by SM Entertainment. SM artists are all trained systematically for a specific field with their "Incubating System."

President Lee Soo Man of SM Entertainment was the first to emphasize CT (Culture Technology) in order to spread the awareness of K-Pop worldwide. YG Entertainment has grown significantly in the last few years and it is difficult to say that they did not follow the footsteps of SM Entertainment.

Lee Soo Man is emphasizing "Culture first, Economy next" as their catch phrase. This aspect of Lee Soo Man's business mind is very apparent in the way he is expanding SM Entertainment.

SM Entertainment is the agency of big stars like BoA, TVXQ, Girls' Generation, Super Junior, SHINee and more. SM Entertainment will have an incredible amount of influential power in music programs, dramas as well as variety shows with the mix of MCs to actors to idol stars.

The stars of SM began a project that makes the stars look like an actual "idol." Last August, "SMTOWN Live World Tour 3" was opened at the Seoul Olympic Gymnasium and handed out a passport to every single international fan that was present at the location.

It wasn't just another concert. It was a stage where all of the passions and ambitions of SM Entertainment could be witnessed. It was a plan created by SM Entertainment to tie all the international fans together as one. Another purpose of the concert was to create an image of all the artists as a big family, which will heighten the devotion of the fans for SM brand artists.

Although there may be unexpected side effects of grouping all the SM celebrities, the synergy effect in the business aspect is expected to grow significantly. KB Kookmin Card and Visa Card, as well as others have all approached SM Entertainment first.

Kim Eun Ah, chief of the marketing group in SM Entertainment stated that they are not trying to do everything all at once in order to widen their perspective. She also added that there are a lot of positive aspects to making business plans that will provide stable financial means to continue providing the cultural aspect for the increase in the size of the company.

SM Entertainment is currently focusing mostly on China. Kim Young Min, a representative of SM stated, "Regardless of the sales in Japan, going into China is necessary" and mentioned that China will soon become the biggest music market.

Lucky YG? "Decision and Focus"

As opposed to SM Entertainment, YG Entertainment has their eyes set on the United States. YG singer Psy has revealed on September 4 that he has signed a contract with Universal Music Group. Justin Bieber's manager Scooter Brown's SB Project will manage Psy's promotional activities in the United States.

Big Bang and 2NE1 let their name known through their world tours, Psy's explosive popularity rooted from the music video of "Gangnam Style." Psy left Korea to the United States in order to officially begin his project in the United States. Prior to Psy, Rain, Wonder Girls, and Girls' Generation have all spent years without significant success but Psy headed straight to the top with just one song, "Gangnam Style."

It is still currently too difficult to predict his every move. However, his profits are estimated to be unbelievably large. If Psy's promotional activities in the United States are met with success, YG Entertainment as well as Big Bang, 2NE1 and Epik High will all have a high chance of debuting in the United States successfully. The industry that was unbreakable even after countless years of effort put in by JYP and SM, Psy completely broke the barrier with just one song. People even say things like, "I wonder if he's just lucky or simply talented."

Yang Hyun Suk, the president of YG Entertainment stated that it is only the beginning. YG Entertainment is planning to make more improvements in the business aspects of the company. There are rumors that YG is planning to create a vacation package as SM does with travel agencies. First, YG will work with Cheil Industries and jump into the global fashion market. Together, they are planning to launch a fashion brand by Spring 2013 targeting people in their teens and their 20s. It won't be hard for the fashion brand to succeed, seeing as how fashionable and trendy the SM artists are.

On August 21, an online shopping mall in Germany began to sell T-shirts with "Gangnam Style" motifs on them. Each T-shirt is being sold at approximately $17 USD.

A representative from YG Entertainment stated, "I think there will be an overflow of great new ideas with the two companies working together. We want to reach out to people in Asia as well as the world."

YG focuses on the outer appearances as much as the internal stability of each artist. Big Bang and 2NE1 are traveling all over the world right now to perform for their world tour. Each group will be traveling to 25 different countries with internationally famous staff members including music director Gil Smith and Laurieann Gibson, both of whom have prior experience working with global pop stars like Lady Gaga, Beyoncé and Michael Jackson.

YG is expected to have the most number of sales in 2012 with Big Bang and 2NE1 on the road and Psy's explosive international stardom. Although YG Entertainment is still in second place, it is becoming a close race with YG threatening to take SM's place in number 1.

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