K-Pop Shakeup: SM Hunts for Its Lost Sound with New Strategy

• SM is trying to resolve its identity crisis by recentering its creative control.
• The exit of key figures has weakened SM’s signature sound and spread its talent to competitors.
• SM’s reset highlights a widening split in K-pop, where legacy-driven reinvention now competes with globally structured rivals, like Bang Si-Hyuk's HYBE and SM founder Lee Soo-man's new agency, A2O.

SM Entertainment announced a broad strategic reset this week as it approaches its 30th anniversary. The agency is reforming after high-profile exits have seemingly weakened the creative foundation of its global pop identity. With the ongoing changes, SM is striving to seek a balance between legacy and innovation, while industry peers like HYBE have been focusing on global frameworks combining local markets with tech-driven fan engagement.

SM Next 3.0 Puts Creatives at the Center

SM's Next 3.0 roadmap shifts from a traditional multi-production team structure to a "multi-creative" approach. According to the company, the strategy will involve assigning creators to projects based on evolving artistic vision rather than predefined internal teams. The goal of this method involves giving artists and creative professionals, a greater control over concept, sound, and output. SM Entertainment has further confirmed the introduction of a new boy group in 2026 through a reality series titled Reply High School. Notably, the soon-to-debut group is currently named SMTR25.

According to industry publications from South Korea, the strategy "is not a departure from what the company stands for, but an evolution," emphasizing objectives to accelerate sustainable growth and strengthen global positioning ahead of its anniversary. Key pillars of the plan include partnership expansion, such as collaborations with Tencent Music in China and True in Thailand, as well as the use of artificial intelligence (AI) to give tailored music suggestions.

SM’s Identity Gap Widens as Legacy Figures Depart

The announcement comes at a time when many in the Korean industry believe the label, SM, is at a crossroads in its identity. Foundational figures like BoA, SM's signature soloist and executive producer for the rookie group NCT Wish, have left after dedicating more than a decade to the agency. 

Notably, Nam So-young, former CEO of SM, recently took the lead at WakeOne, which manages rising K-pop groups like ZEROBASEONE, izna, and ALPHA DRIVE ONE. Reportedly, ALPHA DRIVE ONE's debut hit, Freak Alarm, as well as B-side tracks such as Raw Flame and Cinnamon Shake, were created by composers and writers who have previously worked with SM idol groups like NCT 127 and Riize.

Apart from these exits, critics and fans have expressed worry about the departures of founder and chief producer Lee Soo-man and longstanding hitmaker Yoo Young-jin. Many are wondering if the distinct "SM sound," which is famed for its polished vocals, myth-heavy lore, and genre-bending originality, would survive without them.

Nevertheless, Lim Hee-yun, a music critic, told the regional press that SM's legacy "didn't just ride trends; it invented them." However, experts believe that SM Entertainment should clarify what its distinct creative DNA means in today's multi-label K-pop landscape. This is especially crucial as companies like HYBE are going "glocal," i.e., globalizing and localizing their operations at the same time. Seemingly enough, the company is now trying to walk on a parallel path.

Quite interestingly, Lee Soo-man, the founder of SM Entertainment, sold his 14.8% interest to HYBE for ₩ 422.8 billion (~ $286.1 million USD). The deal also included a three-year non-compete clause, but Lee rapidly developed A2O Entertainment, headquartered in Singapore, and has operations in the United States and Asia. Despite not producing music domestically in Korea, the agency launched their Chinese girl group A2O May in 2024, earning U.S. chart acclaim and international honors.

Lee intends to start a Korea-focused boy band, tentatively titled A2O Soul, in late 2026, perhaps with assistance from former SM associates, including BoA. The move received notice after BoA quit SM, ending their 20-year association. Notably, Lee's niece, Sunny from Girls' Generation, joined A2O Entertainment in April to promote trainee development and mental-health initiatives.

HYBE vs. SM vs. A2O

SM, HYBE, and A2O offer different perspectives towards a maturing global K-pop market. SM is implementing a new global approach which is AI-driven, akin to HYBE, stressing broad market penetration while attempting to reclaim creative control and maintain its trademark personality. SM’s search for freshness to keep its characteristics thriving puts its legacy-driven artistry to the test.

In contrast, A2O is now embracing a more Korea-centric approach. A2O's strategy differs slightly from the usual K-pop model, which targets several markets while basing operations in South Korea. Built outside of the country's traditional framework, the company is more adaptable in global marketplaces.

HYBE, on the other hand, will now use platform ecosystems and scarcity-based monetization to combine global reach with localized audience engagement. Together, these approaches suggest that the next chapter of K-pop will be determined less by expansion and more by which companies can persuasively redefine scale, value, and originality in a climate of growing rivalry within a post-globalization market.