SM Entertainment Unveils Majors Plans With ‘SM NEXT 3.0’ Strategy

In the wake of their 30th anniversary, SM Entertainment has unveiled its new growth blueprint: “SM NEXT 3.0.”

The South Korean entertainment company, home to popular K-pop acts like SHINee, EXO, NCT, aespa, and RIIZE, outlined several major plans, including changes to its structure systems, expanded global IP strategy, AI integration, and the introduction of a new boy group, in two video presentations released online this past Tuesday.

SM Entertainment Co-CEOs Daniel Jang and Dmitry YJ Tak, and Chief A&R Officer (CAO) Chris Lee revealed their plans to evolve their established “SM 3.0” system, which has been successfully implemented over the past three years, into a “Multi-Creative” structure that “places people and artists at the core of its creative ecosystem.”

“SM 3.0” established operations in the company’s infrastructure, focusing on multi-production, content creation, expanding its IP system, and global distribution. Their new system provides their artists with more opportunities to participate in the creative process.

“By placing artists at the center and flexibly assigning the most optimal creative teams, we aim to achieve growth and transformation simultaneously,” said Tak. “As each artist’s universe evolves, it calls for new artistic languages. Rather than operating within a fixed production hierarchy, we will build flexible, project-optimized creative lineups that allow every artist’s transformation to be realized with the highest level of precision and quality.”

The company officially confirmed a new boy group will debut this year and will be introduced progressively through their variety program, Reply High School, set to air early in the year. The potential candidates will include SMTR25 trainees.

With its global, localized IP strategy, the company will work with China’s Tencent Music Entertainment, Thailand’s True Corporation, and several partners in Japan to strengthen SM’s presence while maintaining its “creative identity.”

SM also plans to strengthen its global A&R infrastructure by collaborating with its music publishing subsidiary, KMR (Kreation Music Rights). KMR has maintained several exclusive and sub-publishing agreements with more than 370 composers worldwide, with a “core K-pop catalog of over 7,000 songs,” and recently expanded from Korea and Europe into the U.S. last year.

Lee stated, “Through KMR, our goal within the next five years is to build Asia’s largest and most respected publishing company, and on that foundation, to grow further as a hub for intellectual property (IP) and a leader shaping the future of the music market.”

The company will also upgrade its A&R systems by integrating AI features to analyze songs and recommend them to each artist. Jang addressed the use of AI in their company, revealing their “distinct advantage” of leveraging AI capabilities through their parent company, Kakao.

He comments, “ We see strong potential for meaningful synergy at the intersection of a rapidly evolving K-pop landscape and AI. We will pursue M&A opportunities within music and related industries more actively than in the past three years, and increase capital investment to accelerate growth.”

Addressing its ongoing efforts to protect its artists, SM plans to continue its reporting service, KWANGYA 119, which has received approximately 300,000 reports and a reported 99.8% response rate. This year, they will provide quarterly updates to fans about their legal actions to protect their artists from false rumors and malicious attacks.

In the ever-changing K-pop industry, SM will expand fan experiences across concerts, merchandise, and communications “as a medium for fans to experience an artist’s universe.” They noted that DearU, the company behind fan communication platform Bubble, is now an affiliated subsidiary, which would strengthen their collaboration with global platforms to deliver K-content experiences to fans worldwide.

Jang and Tak concluded the presentation by emphasizing “SM NEXT 3.0″ represents the continued expansion of K-pop, stating, “Through disciplined, sustainable growth alongside bold, forward-looking investments, we will continue to shape the future of the global entertainment market.”