SM Entertainment to grant Kakao exclusive rights to distribute albums, music: sources

• Published date: 25 February 2023
• Publication title: The Korea Times

SM Entertainment has agreed to give Kakao Entertainment, a subsidiary of technology firm Kakao Corp., exclusive rights to circulate its albums and music as part of its alliance with the tech giant against rival K-pop company Hybe's takeover bid, music industry sources and investment banks said Thursday.

They said the transfer of rights was included in a contract Kakao signed earlier this month to buy a 9.05 percent stake in SM through a rights offering and convertible shares and become a strategic partner of SM.

Under the deal, SM will grant Kakao Entertainment exclusive rights to distribute Korean albums and music sources and will cooperate to distribute overseas albums and music through the company, according to the sources.

Currently, Dreamus Co., of which SM owns part of the shares, is in charge of distributing albums and music of K-pop artists such as Ive, Monsta X, IU, STAYC.

SM has also reportedly agreed to cooperate to distribute tickets for domestic concerts and meet-and-greet events for fans of SM-managed artists through Kakao Entertainment.

Since the tech giant will operate Seoul Arena, under construction in northern Seoul to become the country's first and largest arena dedicated to staging K-pop performances, it is expected to become a major venue for SM artists' performances if Kakao's acquisition of the stake in SM is made.

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