SM Entertainment (SM), led by co-CEOs Jang Cheol-hyuk and Tak Young-jun, unveiled its new blueprint, ‘SM NEXT 3.0’, on the 20th, as it embarks on a new chapter beyond its 30th anniversary.
SM released a total of two videos on its official YouTube channel that day, announcing its vision to evolve its ‘SM 3.0’ system, established over the past three years, into a ‘Multi-Creative’ system focused on people and artists. The company presented key agendas guiding its future, including IP strategy, business and global strategy, and management and investment strategy. Co-CEOs Jang Cheol-hyuk and Tak Young-jun, along with Chief A&R Officer Lee Sung-soo, personally delivered the announcement, explaining the company’s future direction to shareholders and fans.
1. Evolution from ‘Multi-Production’ to ‘Multi-Creative’: Innovation in People and Artist-Centric Creation
SM announced the introduction of a ‘Multi-Creative’ system, an advanced version of its existing 5-unit multi-production framework. CEO Tak Young-jun stated, “We aim to achieve growth and change simultaneously by focusing on artists and deploying optimal creators.” He added, “As artists’ worldviews evolve, new artistic paradigms are required. We will build a creative lineup optimized for each project’s goals to achieve change in the most accomplished way.”
SM also confirmed the debut of a new boy group in 2026. “A boy group will debut in 2026, including members from the male trainee team SMTR25, who will be introduced gradually through the variety show ‘Reply High School’ early this year,” he explained.
SM also detailed a global local IP strategy. CEO Tak stated, “While focusing on SM’s creative capabilities, we will actively collaborate with strong local partners to carry out production and marketing.” He added that “in China, SM will collaborate with Tencent Music Entertainment; in Thailand, with True; and discussions are ongoing with multiple partners in Japan.”
2. Strengthening Global A&R Infrastructure through Synergy with Publishing Subsidiary
SM has established an A&R system optimized for each artist and strengthened its global A&R infrastructure through organic collaboration and synergy with its music publishing subsidiary, ‘KMR (Kreative Music Rights)’.
Lee Sung-soo, CAO, has continuously reinforced SM’s A&R system and network using KMR. He stated, “KMR has expanded from Korea and Europe to the U.S. by 2025, securing a foundation for a global repertoire, and has signed exclusive or sub-publishing contracts with over 370 composers, owning a core K-Pop catalog of over 7,000 songs.” He added, “Through KMR, SM aims to own the largest and best publishing company in Asia within the next five years, growing as a hub of intellectual property (IP).”
SM also mentioned plans to upgrade its A&R system using AI technology, for example, by analyzing tens of thousands of songs accumulated over 30 years to recommend tracks with a high degree of suitability for each artist to fans.
3. Enhancing Artist Protection and Expanding Fan Services
SM also outlined policies to enhance artist protection and increase fan satisfaction. CEO Jang stated, “Since the implementation of KWANGYA 119 about two years ago, approximately 300,000 reports were received, with a 99.8% response rate. From 2026, we are preparing to share the status of lawsuits and reports with fans on a quarterly basis.” He added, “We plan to implement measures that can enhance the fan experience incrementally.”
4. Expanding Performance, MD, and Platform Business while Utilizing Synergy with Kakao AI
SM also detailed its business and investment strategy, designed to respond to changing fandom consumption patterns. CEO Jang stated, “Performances play a crucial role in the evolving K-Pop industry trends, and we are striving to provide optimized performance experiences for fandoms across each region.” He added, “As the secondary business based on artist IP continues to grow, SM is planning merchandise as a medium to experience the artist’s worldview, leading new trends, and plans to expand into the lifestyle merchandise field, anticipating boundary-less collaborations across various industries.”
He also stated, “Not only has affiliate company ‘Dear U,’ which operates the fan communication platform ‘Bubble,’ been incorporated as a connected subsidiary, but through collaboration with global platforms, we also plan to offer diverse K-content experiences to fandoms.”
Particularly regarding the use of AI as a future core driver, CEO Jang stated, “SM benefits from leveraging the technological capabilities of its parent company, Kakao’s AI, and we expect strong synergy at the intersection of rapidly changing K-Pop and AI.” He added, “We will actively seek M&A opportunities within the music and related industries and invest capital to accelerate growth over the next three years.”
Concluding the presentation, co-CEOs Jang and Tak stated, “SM NEXT 3.0 aims to achieve borderless expansion by combining creative innovation centered on music, technology, and platforms with the artistic essence of SM.” They expressed their aspiration to prove their position as a leading global company through substantial growth and investment.
