Amidst a shareholder battle and a falling stock price, SM Entertainment – one of Korea’s top-three talent agencies – has announced plans for building its own blockchain platform with a native cryptocurrency with goal to power business growth.
According to a report from local media outlet Chosun Ilbo, Joo Sang-sik, director of the company’s technology arm – CT-AI Labs, made the announcement at the Upbit Developer Conference in Incheon on September 4th.
Founded in 1995 by Lee Soo-man, the company is home to some of the biggest names in K-pop – including groups EXO, NCT, Super Junior, Red Velvet and Girls Generation. Last year, SM raked in $518 million in revenues.
SM Entertainment is currently listed on the Korean stock exchange and has a market capitalization of roughly $600 million. The firm has recently gone through a management reshuffle, as shareholders raised concerns about its finances and some of its business decisions. Its stock price has dropped 43% since last November.
According to Joo, the entertainment business currently uses an inefficient payment and settlement systems, therefore he believes blockchain to be the solution that could help address those issues.
Joo stated that the company is aiming to “launch its own blockchain-powered mainnet” and has no plans to use an existing platform. He further explained that the blockchain network would allow fans to be more engaged with the entertainment ecosystem by investing in artists’ work through digital currencies.
SM said it intended to pursue private and public blockchain initiatives and said that it is also currently talking to a number of potential partners regarding the construction of its forthcoming blockchain business.
The report further noted that Joo responded positively to questions about the possibility of launching an SM token, however declined to give a definite answer on the matter. The company strongly believes that a token economy built using cryptocurrency would allow artists to create higher-quality content, powered by fan contributions.
According to the report, the entertainment company sees blockchain as a long-term plan, and that fans could expect to see it develop in stages, according to priority.
As previously reported, several smaller South Korean companies have attempted to link the increasingly lucrative world of K-pop to cryptocurrencies with decidedly mixed results. Last year, a platform called Ko-fun was launched with the objective to allow K-pop-related crypto transactions on a blockchain network. For reference, the platform planned to create coins for individual acts such as a BTS Coin.
However, SM would become the first major South Korean entertainment company to try and move into the cryptoverse in earnest. Prior to this, the company had showed interest in pursuing blockhain, and earlier this year joined Sony and several South Korean entertainment providers on an initiative named snowM.
The joint partnership aims to build and develop a blockchain-powered fan community, and will make use of Dunamu’s Lambda256 blockchain platform.