K-Pop Giant HYBE in Crisis: Internal Struggle Threatens Multi-Label System
South Korea’s most extensive entertainment company, HYBE, founded by Bang Si Hyuk in 2005, is reportedly in internal turmoil.
HYBE, which spotted a subsidiary that discovered the girl group NewJeans attempting to seize control, has confirmed that it has launched an internal investigation. Some point to the multi-label system that HYBE has maintained, which guarantees independence, as the cause of this incident.
HYBE’s management style is being pointed out as the cause of the control seizure incident, and it is expected that they will not be able to avoid organizational restructuring in the future.
On the 22nd, it was reported that HYBE had started auditing the management team of ADOR, including President Min Hee Jin.
This was because they detected signs of ADOR trying to become independent from the headquarters and started collecting related evidence. Along with the audit, HYBE sent a resignation letter to President Min and requested a shareholders’ meeting against the ADOR board of directors.
ADOR, at the center of the controversy, is a HYBE label established by President Min Hee Jin in 2021. Under the influence of ADOR and President Min, NewJeans, which debuted two years ago, has been a hit song after another, raising HYBE’s subsidiary to a leading K-POP girl group.
HYBE is known to have many subsidiaries, like ADOR. The multi-label system has led to its growth.
Since taking office in 2021, HYBE’s President Park Ji Won is known to have put a lot of effort into building a multi-label system.
Thanks to the unique creative system and ideas of the multi-label built by President Park Ji Won, unique hit songs came out for each group, and HYBE, which built a virtuous cycle structure that increases the possibility of creating super IP (intellectual property), was cited as a factor that could grow explosively.
HYBE thoroughly enjoyed the benefits of management through the multi-label system. Last year, HYBE became the first entertainment company to exceed annual sales of 2 trillion won and reported that it achieved the highest operating profit ever.
As the size of the company’s assets exceeded 5 trillion won at the end of last year, the Min Hee Jin incident occurred while the designation of the first large corporation in the domestic entertainment industry was imminent.
ADOR stated that the five-member girl group ILLIT, which debuted in March, imitates NewJeans in many ways. ILLIT was created by Belift Lab, another label under HYBE, and it is claimed that Belift Lab created a girl group that imitates NewJeans.
President Min Hee Jin said, “HYBE is operating a multi-label system to pursue cultural diversity by allowing various labels to create their music independently. ADOR is one of those labels,” and added, “Ironically, the cultural achievements made by ADOR and its artist NewJeans are being most seriously infringed upon by HYBE.”
She continued, “The multi-label system is not a system to give indulgences to other labels to follow the cultural achievements made by one label because it is an affiliate label, but a system to allow them to make the music they want independently.” She strongly argued, “HYBE, Belift Lab, and Chairman Bang Si Hyuk seem to think this matter will end if they drive me out without apologizing or preparing countermeasures for this incident.”
The reason for this incident in the industry is HYBE’s octopus-like management.
Concerns within HYBE have been brewing for some time, and the Min Hee Jin incident is seen as a manifestation of heightened internal competition between labels.
Due to this incident, a precedent has been set for subsidiaries to act independently, so it is speculated that HYBE is likely to change its existing multi-label strategy.
HYBE has 86 subsidiaries and affiliates, including HYBE IM, Weverse Company, Pledis, Source Music, KOZ, HYBE Japan, and HYBE America. There are concerns about the possibility of this incident spreading.
Initially, HYBE was evaluated as having well prepared for the military risk of BTS, a singer belonging to HYBE, as the separation of subsidiaries and affiliates occurred through HYBE’s physical division.
Furthermore, HYBE seemed to have achieved reinforced control by retaining 100% ownership of the new corporation through physical division. Even minority shareholders who opposed the physical division later viewed HYBE’s decision positively.
However, this incident involving ADOR, the label behind the creation of the girl group NewJeans, which played a significant role in HYBE’s success story, highlights the issue of HYBE’s octopus-like management.
Meanwhile, HYBE’s President Park Ji-won said about this incident, “(The conflict between HYBE and ADOR) is another trial and error that can occur because we have executed with sincerity in the direction we pursue,” and “We will continue to think and improve on how to conclude this matter well and what needs to be supplemented for the advancement of the multi-label and what needs to be executed for the growth and development of NewJeans and ILLIT.”
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