Industry Eyes Music Label’s Expansion

SG Wannabe, last year’s number one-selling male vocal group (40,000 albums), together with pop music groups Vibe, Yoon Gun, and MtoM, are feeling the love from their fans thanks to their singing ability.

They are all represented by the same entertainment management company, Poibos.

The company produces their recordings and has various affiliates, like GM Entertainment and IstarCinema, that represent star entertainers, including Kwon Sang-woo, Song Seung-heon, Lee Dong-gun, and Han Eun-jung.

Poibos produced MBC’s Sad Sonata and SBS’s Princess Lulu, which Japan and Hong Kong signed contracts for broadcast rights last year. It also merged Culturecap Media, which produced the hit movie, “My Little Bride,” as well as Max Mp3, an online music site, Game Mall, and InfoWeb. It is also the second largest shareholder of CJ Media, whose holdings include the cable music channels “M.net” and “KMTV.”

The entertainment industry has shown a keen interest in Poibos’s aggressive business diversification strategy.

Poibos began as the record label “Daeyoung A&V” in 1993 and was listed on the KOSDAQ in 2000. It is among the top 10 companies in the industry in terms of revenues. But it is a rare example since it has its affiliates in a wide range of areas, including broadcasting, movies, music, and games.

Only the Strong Will Survive-

Poibos CEO Lim Sung-geun (46) says, “Only sound and strong companies will survive in the entertainment industry, and it is time to grow together, making efforts to keep our business transparent and refrain from any irregularities.”

Lim remembers the day when he drank alcohol with people in the same industry at a bar in Gangnam, Seoul, in 2003, the year he joined the company as CEO.

A president of a record label asked a president of a record distributor for an advance of 500 million won since he was in the process of producing a master album. He got five one-hundred-million won checks on the spot.

This is a widespread practice in the music industry. There was no receipt for the borrowed money. And when he ordered his secretary to write down how much he owed, that became the only document that showed that a deal was made.

“Just a few years ago, without a professional marketing system, personal ties were all that mattered.” Lim said. “The convergence of broadcasting and communication, and what is known as the Korean Wave, were the main forces that brought the industry a step forward.”

When asked whether the diversification strategy of Poibos was out of control, Lim said, “Content should be distributed and should evolve through various channels.”

Lim plans to form Poibos Japan together with the company Oriental Land, that owns the Tokyo Disney Resort, next month. The company will make a movie and TV series with Tokyo Disneyland as its backdrop. Oriental Land will receive the rights to produce and sell character merchandise of the popular Korean stars that Poibos represents.

Lim is discussing plans to launch a drama manufacturing company with star producer Pyo Min-soo, who worked at a network TV station, and famous music video maker Cha Eun-taek. “Companies equipped with sound business models will compete in terms of content,” predicted Lim.

Sun-Mi Kim kimsunmi@donga.com