Chinese Investors Are Pumping Billions into K-Pop

Can Canada’s music industry find a way to be a part of the next Big Thing?

Chinese investors have injected 3 trillion won (US$2.5 billion) over the past five years into South Korean games, movies and entertainment, according to the South Korean government.

Deals are shifting from memorandums of understanding into more direct investments. Last year, for example, FNC Entertainment, which houses popular K-pop groups like CNBLUE and AOA, issued millions of dollars’ worth of new shares to Chinese firm Suning Universal Media Co.

The influx of investments from Chinese companies can be seen as a boom as it helps South Korean agencies break into the world's most populous country, Kim Gwang Soo, CEO of MBK Entertainment, which manages popular girl group T-ARA, reportedly said.

 "Joining hands with companies in China allows us to find our niche more easily. Just like many South Korean artists debuted in Japan with the help of local talent agencies, T-ARA is doing the same in China," Kim was quoted as saying.

But some industry analysts believe that too much Chinese investment could backfire, especially when South Korean agencies begin sharing their trade secrets to their overseas investors. There is also the danger of South Korean content becoming influenced by Chinese investors, and changing the quality of K-pop entertainment that has brought the industry success in the first place.

"Chinese capital is a boom to K-pop's expansion in the short term," a marketing official from a South Korean music label said, who chose to remain anonymous, reportedly warned. "In the long run, though, it would give Chinese investors the authority to do whatever they want with Korean content."

The Signal Entertainment Group Corp. is the latest case in point. The South Korean agency recently issued 21.45 billion won (US$17.89 million) worth of shares to Spearhead Integrated Marketing Communication Co., according to its regulatory filing. The Chinese marketing company will soon become the largest shareholder of the agency, which manages actresses Kim Hyun-joo and Lee Mi-yeon.

The trend of Chinese firms taking over South Korean ones started much earlier. In 2014, Juna International Ltd., a Chinese entertainment company, took over Chorokbaem Media, which produced South Korean soap opera hits like "The Producers," "All In" and "Jumong" over the past decades.

Earlier this month, the Yedang Company signed a memorandum of understanding with Banana Project, owned by the son of Chinese business magnate Wang Jialin, to launch a joint venture managing young artists. These examples demonstrate just how lucrative South Korean entertainment is considered to be in the world's most populous country.




- Pictured above, K-Pop stars JYJ



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