K-pop’s dilemma profit pressures work against originality

With its assets exceeding 5 trillion won ($3.7 billion) last year, Hybe, formerly known as Big Hit Entertainment since 2005, is aiming to achieve “large-firm” status.

In 2019, Hybe acquired its first subsidiary label, Source Music, with aspirations of becoming a global multi-label entertainment company. Presently, Hybe oversees 11 subsidiaries within itsdivision, including Big Hit Music, home to the internationally acclaimed K-pop sensation BTS; Pledis Entertainment, representing the globally renowned Seventeen; and Ador, housing NewJeans.

K-pop’s dilemma profit pressures work against originality

Despite Hybe’s ambition to rival leading record labels like Universal Music Group, Sony Music Entertainment, and Warner Music Group with its multi-label strategy, there have been criticisms regarding the originality of its products.

Multi-Label System Under Scrutiny

In the K-pop industry, the multi-label system is utilized to rapidly replicate successful models with slight variations, rather than preserving each label’s distinct musical color and identity.

According to music critic Lim Hee-yoon, “A multi-label system should resemble a palette of diverse colors, not only to mitigate business risks but also to expand opportunities. The recent dispute between Hybe and Ador, which raised concerns about originality, indicates that Hybe’s multi-label approach is akin to a conveyor belt churning out successful models.”

Professor Lee Dong-yeun from the Korea National University of Arts explains, “K-pop agencies nowadays focus on reproducing similar IPs that the public favors. This limits the scope of K-pop music, following a proven formula for stardom in terms of music, choreography, and visual concepts.”

One advantage of the multi-label system is the continuous flow of new album releases, which serve as major revenue sources. For instance, Hybe has released albums this year from Le Sserafim (Source Music), TXT (Big Hit Music), and BoyNextDoor (KOZ Entertainment). Additionally, it introduced Illit (a girl group under Belift Lab) and TWS (a boy group under Pledis Entertainment).

However, this fast-paced environment makes it challenging for subsidiary labels to establish their unique identities. Music critic Kim Do-heon notes, “Music producers and artists in the K-pop industry are constantly under pressure due to tight deadlines, often facing plagiarism allegations as a result of rushed creativity. They feel compelled to follow successful IPs, hindering the industry’s ability to innovate.”

This approach contrasts with how K-pop agencies operated in the early 2020s, where major labels like SM, JYP, and YG were guided by chief producers who helped establish distinctive music styles for each agency.

This is why Babymonster, a new girl group under YG, doesn’t face criticism for conceptual similarities to Blackpink, another highly acclaimed K-pop girl group also under YG.

Lim commented, “The sub-label that introduced Illit is Belift Lab, which is home to the successful K-pop boy group Enhypen. Yet, Illit was marketed as the ‘youngest daughter of Hybe’ before its debut. If Hybe aimed to help Belift Lab establish its unique musical identity as a record label, Illit should have been promoted as the ‘sister group of Enhypen’ instead.” Lim emphasized, “Parent companies should trust their sublabels and allow them to explore their musical direction.”


Future Of Multi-Label System

It’s interesting how, at a time when Hybe’s multi-label system is facing challenges, SM Entertainment is launching a business initiative focused on establishing its own multi-label system known as “SM 3.0.”

In fact, SM Entertainment announced on Tuesday the launch of a new label, Krucialize, dedicated to creating contemporary R&B music to broaden the spectrum of K-pop.

According to Kang Hye-won, a visiting professor at Sungkyunkwan University, “SM is also restructuring its business model to emphasize IP revenue through timely production. However, their sub-labels are primarily focused on bolstering infrastructure and resources for creating albums by SM artists rather than developing diverse artists under each sub-label.”

Industry insiders support the notion that each label’s uniqueness should be respected, with the parent company acting as a coordinator to equally support different sub-labels.

Lee emphasized, “Now is the time for K-pop labels to prioritize originality and creativity to ensure the sustainability of K-pop. They must identify areas for improvement and commit to fostering such an environment.”