Nobody seems to care about DBSK’s performance at their 2nd Asia concert. Instead, upset fans are venting about SM’s disrespectful behavior towards them. Although SM is trying to do everything they can, such as allowing fans to enter the concert with all their possessions and offering taxi fare up to 100,000 won (US$100) to fans who waited until 4 am, fans are still upset and they are organizing to teach SM a lesson. It’s going to be interesting to see how this plays out, but this is the real reason why SM is being so obnoxious to their fans.
Since 2002, SM has been losing money and lots of it. In 2002, they reported a 2.1 billion won (US$2.1 million) loss, 2.7 billion won in 2003, 9 billion won in 2004 and 1.3 billion won in 2006. They made 1.2 billion won in 2005, but that wasn’t enough to cover up the losses incurred previously. So, in their desperate attempt to generate more revenue, SM sold DBSK concert’s exclusive license rights to several content providers and that was why fans weren’t allowed to bring their camera-phones and digital cameras inside the concert.
From the looks of their financial statement, it looks like SM’s inconsiderate behavior towards the fans will continue as they try to make their company profitable. Who would’ve guessed that the creator of Korea’s top pop groups such as HOT, SES, Shinhwa, BoA, SuperJunior and DBSK is in such financial trouble?
That’s really interesting. I can’t imagine SM as being poor but I guess they are.
Ha! Radix malorum est Cupiditas. I rest my case.
Karen >> SM is poor because they invest in a lot of groups and many turn out to be mediocre such as Milk, The Grace (tszx), etc…
Abadi>> that’s so true
I think they loose money since they make bogus statements about everyone is going to be “the new BoA” I personally hate it when people compare 2 artists because you’re disrespecting both of them.
They invest a whole bunch of money in the people that they havent even seen if they are capable of being flavourable to the crowd because of their own non-existant beliefs. They even announce it so that people can get psyched. -_-; ugh.
can’t be helped….
Why did they lose so much money? If they didnt publish a lot of stuff, why would they lose so much? &9 billion won in 2004, that is crazy. That was the year Dongbang came out and I`m pretty sure SM made a big profit then. I have so many questions in my head >.
I find it no surprise that SM Entertainment began losing money around 2002 after the disbandment of their highly successful groups—H.O.T. (in 2001) and S.E.S. in the following year thereafter. The huge spike in loss in 2004 is probably reflected with the exodus of Shinhwa, Fly to the Sky, Moon Hee Jun, all around that given time (2003-2004). The major loss in talent pool is probably driving SM to heavily invest in discovering and training new talents to fill up the void…to replenish the talent pool, if you will…and these talents won’t be making a profit until a couple of years after they debut, like DBSK if they’re lucky and Black Beat if they’re not. Profit margins are definitely lower these days than years before due to skyrocketing costs of investing and “packaging” new talents, not to mention higher costs of promoting them as well. And with the decline of worldwide album sales due to widespread online music downloading in recent years, it’s no wonder SM Entertainment or other music labels are going thru turbulent times in making profits and also, in no wonder, are trying to expand their consumer base into other markets, such as throughout Asia.
However, that being said, SM Entertainment shouldn’t be into too much trouble at the moment if they can afford to invest 1.6 billion won (US $1.7 million) in DBSK’s recent 2nd Asia Tour Concert in Seoul, as they foresee the return to be worthy of their investment. That should tell us that SM’s financials are in better shape than we think they are.
kpop >> thanks for the in-depth analysis of SM’s financial health..
yeah, basically they have high revenues but really bad return on investment, which is responsible for all their losses, but like you said, they’ll be fine~
wow….i have no idea SM is having such a big financial problem…but i guess it would grow back, considering that they kept on producing CDs almost like every 2 months and make their artist work like 24/7 …and like what kpop says, they are investing a huge sum of money on dbsk to make up for their lost~
Ok, as much as I hate Lee Soo Man, I still hope that SM is doing well. If they are not, that will affect a lot of people. Hope they won’t put a more tightly schedule on DBSK (to make more profits for their own).
argg…why did BoA extended contract with SM Entertainment until 2012…she should have gone to mnet entertainment or others…
wow!! i had no clue. hopefully something good comes up especially with DBSK’s tour for their new jpop cd.fell reaaly bad for DBSK, Su ju, and others in sm.
forgot, it shouldn’t be brought as a terrible thing to Dbsk’ performance because sm made a stupid decisions to the fans.
SM Entertainment should act more polite and respectful to the fans. If they dont, i guess it’s because they think theyr’e so popular so they can act like rich and treat people the way they want. Thts not cool at all. If they do that, they can become poor because people will not buy their CD’s and all the stuff.
i didnt noe they were poor
coz they’re really working hard
we need to buy more and more of their stuff and suppor them
cLuElEss!!! i hOpe thaT thEre descision wiLL leAd thEm to thEre suCess….. to reGain poWEr n hElp DBSk…
O_O Unbelieveable…. who would have thought?
well probabbly cause they spend a lot of money on concerts like tvxq’s…
i heard it cause millions… well i think wat dey did was fine… and tvxq did their best to satisfy their fans right? so dat isn’t a big deal i think…. it’s quite reasonable…
=_= i think that SM entertainment will be gone sooner or later because like… main singers such as dbsk and suju wouldnt their contracts eventualy end and wat if they dont want to join back?… -_- wouldnt good enertainment be the next best one?… cause like shinhwa is in it and Battle and i think F.T. island? >_< so if suju + dbsk joined then they would be hardout earning billions!!!… just my suggestion
Wow. Who would have though the company who created Shinhwa, BoA, DBSK and SuJu was in financial difficulties.
really late reply but just found this interesting/ disturbing. i mean most of the suju/dbsk fandom [i guess more from the nuna fans who actually earn money] complain that SM comes out with like five versions of teh albums and a ridiculous amount of merchandise [w/c we buy anyway wtfh >.<], and turns out they really need to turn in a profit. gah. that was enlightening, to say the least. i think thier 2007 financials will be ok though. suju, inasmuch as they topped your tools and fools list, must have turned out to be moneymakers for them too, not as much as cash cow tvxq. god, no wonder he works those boys so hard T_T