[News Inside Companies] 'DearU', the Biggest Beneficiary of SM Management Dispute?

Fandom Platforms Connecting Fans with Stars
SM's 'DearU Bubble', HYBE's 'Weverse'
Expecting Star Integration if HYBE Acquires SM

[Asia Economy Reporter Han Seung-gon] As the management rights dispute at SM Entertainment (SM) intensifies recently, there is an analysis that the fandom platform 'DearU' will benefit from it.

The predecessor of DearU is 'Everysing.' In July 2017, SM established it with 100% investment to launch a mobile karaoke service business. Later, in 2019, it merged with Brainicle, a messenger application (app) development company that developed Dontalk and WeBitalk, and by combining entertainment and IT technology, it launched 'DearU bubble' in February 2020. It is a subscription service that allows fans to receive messages from stars in a 1:1 chat room and reply to the received messages.

At that time, CEO Ahn Jong-oh, who was the CEO of Brainicle, succeeded as the CEO of DearU and led it to go public. SM Studios holds the largest stake with 31.98%, and JYP Entertainment is the second-largest shareholder with an 18.53% stake. On the DearU platform, you can meet stars belonging to both SM and JYP. As of the third quarter of last year, 119 teams and 362 artists are active.

Hive's 'Weverse' (left) and SM's 'Dear U Bubble'. Photo by each company's website

As a competitor, there is HYBE's 'Weverse,' established in June 2019. On Weverse, 77 teams including BTS from HYBE, and Big Bang, Blackpink, Winner from YG are active, and it also has a cooperative relationship with CJ ENM. In terms of competition, it is SM·JYP versus HYBE·YG Entertainment.

However, if HYBE's acquisition of SM is successful, stars such as BTS (HYBE), Twice (JYP), Blackpink (YG) could be integrated under one platform, and HYBE could secure the IP (intellectual property) of first-generation K-pop groups like SM's H·O·T and S·E·S. Some even say this could lead to the birth of a K-pop Avengers. Separately, if SM is sold to Kakao Entertainment, actors and singers affiliated with Kakao could join DearU to secure new subscribers, and by collaborating with Kakao's core platform business, synergy effects could be expected. This is why attention is focused on DearU's corporate value amid the SM management rights dispute.

Jiin Hae, a researcher at Shinhan Investment Corp., said, "The new owner of SM has been narrowed down mainly to Kakao Entertainment, CJ ENM, and HYBE," adding, "Depending on which business operator acquires it and at what price, the stock prices of SM and the acquirer will be highly volatile, but it seems certain that DearU will be the biggest beneficiary."