"SM Success Rate is 90%"... The Reason Behind aespa's Confidence

Interview with Lee Seong-su and Tak Young-jun, SM Co-CEOs
Virtual Nation Declared for 10 Years, Realized through the 'Metaverse'

HOT, BoA, Girls' Generation, TVXQ, and Other Superstar Makers
Record High Performance with Over 10 Million NCT Album Sales Last Year

"aespa is the Key Keyword to Amplify SM's Future Value"

Sungsoo Lee and Youngjun Tak, co-CEOs of SM Entertainment, are being interviewed by Asia Economy on the 9th. / Photo by Honam Moon munonam@

[Asia Economy Reporter Ji Yeon-jin] "We declare the birth of the nation of SM Town."

On August 18, 2012, the opening of the ‘SM Town Live World Tour 3 in Seoul’ concert echoed through the Seoul Jamsil Olympic Main Stadium. The concert featured all the artists under SM Entertainment, including BoA and Kangta, the pioneers of Hallyu (Korean Wave), as well as Super Junior and Girls' Generation. Pink passports called ‘SM Passports’ were also distributed to attendees. It was considered a cheesy pun. However, ten years later, the ‘virtual nation’ declared by SM at that time has actually unfolded before our eyes. It is the ‘Metaverse’ that has captivated the world since last year.

Lee Sung-soo, co-CEO of SM Entertainment, emphasized in an interview with Asia Economy at the company’s headquarters in Seongsu-dong, Seoul, on the 9th, "Fans who received the SM Passport in 2012 collected stamps at every concert, but now, with technological advancements, it has evolved into a ‘Meta Passport,’ a non-fungible token (NFT). SM is expanding its business into the Web 3.0 digital realm through ‘Gwangya,’ which encompasses the metaverse."

This year, SM launched Studio Gwangya, a metaverse content company, and is developing it as the brand overseeing its metaverse business. Lee Soo-man, SM’s chief producer, introduced Gwangya as "a world of content where infinite events happen beyond time and space" during the SM Town Live concert broadcast worldwide for free via YouTube in January. SM plans to leverage NFT goods (merchandise for passionate fans) trading through the MetaForce platform ‘Club Gwangya’ and offline stores named ‘Gwangya’ as core growth drivers, starting with the NFT work on the SM Passport.

SM has produced superstar idols from the first generation such as HOT, SES, BoA, and Shinhwa in the 1990s to TVXQ, Girls' Generation, Super Junior, EXO, SHINee, Red Velvet, NCT, and aespa. CEO Lee stated, "SM’s success rate is 90%. There is no history of so many superstars coming from one company. Producing technology based on cultural technology has enabled us to create excellent IP (intellectual property) and commercialize it," emphasizing the point.

Lee Sung-soo, co-CEO of SM Entertainment, is being interviewed by Asia Economy on the 9th. / Photo by Moon Ho-nam munonam@

Since March 2020, CEO Lee has been leading SM together with Chief Operating Officer (COO) Tak Young-joon. Last year, SM surpassed 700 billion KRW in sales, achieving its highest performance since its founding. This remarkable result was achieved despite all concerts being halted due to the COVID-19 pandemic. Co-CEO Tak explained, "After becoming CEO, the first thing we did was to reduce businesses far from the core that were running deficits," adding, "We grew with the existing artists’ intellectual property (IP), and thanks to NCT entering its prime." NCT is a multinational boy group consisting of 23 members, having sold over 10 million albums last year.

While NCT drove last year’s performance, aespa’s activities are expected to shine this year. Aespa is a metaverse-based girl group that debuted in November 2020. It consists of four members from Korea, China, and Japan, plus four avatars, totaling eight members. Last month, aespa’s second mini-album, Girls, surpassed 1.4 million copies in initial sales, marking the first time a girl group exceeded one million sales. This far surpasses the previous record of 680,000 copies held by BLACKPINK. CEO Lee said, "Aespa is a key keyword that can amplify SM’s future value," adding, "Typically, artists incur deficits during their debut and active periods after long-term investment, but aespa has set an unprecedented record among K-pop girl groups."

This year, SM paid a cash dividend of 200 KRW per common share, marking the first dividend since listing. CEO Tak said, "We implemented dividends following last year’s record performance and will continue to do so," adding, "The board has approved the acquisition of 10 billion KRW worth of treasury stock, which is being considered for internal compensation and shareholder benefits."