SM Entertainment founder Lee Soo-man talks the metaverse and his ‘Future Vision of K-Pop’ – Music Business Worldwide

Lee Soo-man, founder and Chief Producer of K-Pop giant SM Entertainment, delivered a speech at Stanford University on Friday (May 20) at a conference celebrating the 20th anniversary of Stanford University’s Korea Program.

SM Entertainment artists include the likes of aespa, as well as NCT, Red Velvet, SUPER JUNIOR and EXO, who’s member Suho also gave a speech at the event.

Other attendees at the conference included former UN Secretary-General Ban Ki-moon, former UN Ambassador Kim Sook, and former EU Ambassador Park Joon-woo. 

Lee’s speech centered on the “Future Vision of K-Pop,” in which he broke down the concepts of what he calls the “Play2Create (P2C)” ecosystem, in which he encourages fans, or ‘prosumers’, to create content using SM-related intellectual property (IP) to generate revenue.

He says that, within this blockchain-based ecosystem, which he says forms part of a “new” creator economy, “anyone can use the original content IPs to enjoy and create new [content] again through recreation, and generate revenue”.

Added SM’s founder: “Original content will be transformed back into Recreatable Contents [sic] that prosumers can newly create, and will become the foundation for many future artists, creators, and prosumers who strive to achieve their dreams of innovation and creation.”

He also elaborated on the ‘SM Culture Universe’ (SMCU).

SMCU is a character-led universe that resembles cinematic universes like those created by comic giants Marvel or D.C.

Back in June 2021, SM Entertainment CEO Sung Su Lee explained that it “can be thought of as SM’s metaverse, inviting K-pop fans around the world to appreciate our music and stories via various platforms”.

Elsewhere in the speech, Lee recounted his roots as “the first mover” in the K-pop sector, and how the music expanded globally. He also shared his predictions for the genre, and Korean popular culture as a whole, as it continues to grow in popularity around the world. He refers to K-Pop’s globalization as “Hallyu”.

SM’s founder told the audience that, “from the start, the goal of K-Pop was globalization” and that he established SM Entertainment in 1989, “with the belief that the past history of ‘Economy First, Culture Following Next’ can instead become ‘Culture First, Economy Next’. 

He explained that he then developed what he calls a “systematic [production] and management system” for Sm Entertainment artists.

“If you dream alone, it’s just a dream but if we dream the same dream together, it’s the beginning of a new future. That’s how we began to expand overseas.”

Lee said that he then “discovered and produced global stars from individuals with potential and created content called SM Pop, known today as K-Pop, and told our SM employees in 1997 that, ‘Now, we’re going abroad’.”

Added Lee: “If you dream alone, it’s just a dream, but if we dream the same dream together, it’s the beginning of a new future. That’s how we began to expand overseas.

“In the process of expanding the spectrum of activities and territories from Asia to Europe to the United States, I focused on making Hallyu not just a simple form of export but a continuous, global movement that can accumulate national wealth. I worked to become the first mover.”

MBW listened to his entire speech. Here are a few things that stood out…

Lee Soo-man says that “Culture Technology” – a term he coined – is “the growth engine” of K-Pop…

Lee Soo-man elaborated on, what he says is, SM’s “systematic [production] and management system”.

He says that he coined the term ‘CT’ to describe this system. It stands for ‘Culture Technology’ and he says that it allows his organization “to move in a systematic way”.

Lee explains further that he “decided to codify the entire process of producing culture into a form of technology by creating a formula and manualizing it, while continuously recording its development process along with the knowledge and skills involved”.

“SM’s [production method] has become a model for producing K-Pop.”

Lee added that he organized the system into four stages, of casting, training, content production, and marketing. “With this, I developed my own [production method] called Culture Technology, which systemized the management system,” he said.

He explained further that this so-called ‘CT’ system is the “growth engine of K-Pop” and is also “SM Entertainment’s fundamental operating system”. Through the process he developed, he claims that “K-Pop has become a multi-disciplinary form of art content that’s global”.

Added Lee: “Now, not only Korea’s artists and contents, but its [production] system has also been receiving high levels of attention globally.

“SM’s [production method] has become a model for producing K-Pop, and SM’s CT will expand to become [the] CT of the world. The Future of Culture Technology is the fundamental vision [of] SM Entertainment. And now, I am building a new cultural ecosystem by evolving CT from a culture-making technology to a cultural ecosystem-making technology.”

SM’s founder says that, “by combining blockchain and metaverse technology,” the company’s content will “surpass time and space”…

In October, we wrote about how the SM Culture Universe (SMCU), a character-led universe akin to cinematic multiverses like those created by comic giants Marvel or D.C., is at the centre of SM’s content strategy.

In his speech last week, Lee commented further on his vision for SMCU.  He explained that within SM’s Culture Universe, “all the ‘worldviews’ of SM artists will combine”.

He added that this “worldview, vision, and blueprint” is one that SM has been preparing for, for a long time, “with the hopes that K-Pop and Hallyu will not just be a craze of one generation, but content that’s loved forever”.

“By combining blockchain and metaverse technology, SM’s contents will expand into content for everyone, and surpass time and space to bring to life this future entertainment era that’ll connect through culture.”

Lee claimed that he coined another term, ‘Metaversal Origin Story’ and has “been preparing the Origin Stories and worldviews of [SM’s] artists for quite a while”.

Added Lee: “All the worldviews of our SM artists will come together in a large-scale virtual worldview called ‘Metaversal Origin Story’.

“By combining blockchain and metaverse technology, SM’s contents will expand into content for everyone, and surpass time and space to bring to life this future entertainment era that’ll connect through culture.”

He believes that the so-called ‘Play2Earn’ and ‘Play2Create’ business models will form part of a new Creator Economy, where fans can generate revenue using IP provided by SM

Lee spoke of what he calls the “Play2Create era” and the “Play2Earn” model. SM’s founder wants fans to create their own content inspired by SM content, and generate revenue in the process.

He said during his speech that “we are living in a metaverse where prosumers can voluntarily re-create and spread content” and argued that, “through the Recreation of [content] by these prosumers, who participate and create as creators, the value of [the] original content increases”.

“Just like how culture began and evolved as we shifted from an agricultural society to a more stable economy, play activities will soon become creative activities in a P2C era.”

In February, SM Brand Marketing (SMBM), a subsidiary of SM Entertainment, signed a Memorandum of Understanding with cryptocurrency exchange Binance to build a “comprehensive partnership” to establish, what they call, a global Play2Create (P2C) ecosystem.

The partnership will begin in the NFT sector, allowing fans to “recreate content and products in the forms of games, music, dance, and goods,” by using “the tools and IP provided within the e-commerce and metaverse platforms”.

SM explained in February that this will allow “users to earn profits while also gaining recognition for their [own] originality”.

In his speech at Stanford, Lee said: “The Play2Earn model – playing games and earning money – more common in blockchain, is a model that is only the beginning stages of the web and metaverse”.

He added: “Just like how culture began and evolved as we shifted from an agricultural society to a more stable economy, play activities will soon become creative activities in a P2C era.”Music Business Worldwide