Chinese companies are reportedly investing billions of Korean won (KRW) into K-pop agencies, a trend that is enabling the latter group to penetrate the lucrative Mainland China market. But some insiders worry this may hurt the industry in the long-term, according to an in-depth report from Yonhap News.
Deals are shifting from memoranda of understanding into more direct investments. Last year, for example, FNC Entertainment, which houses popular K-pop groups like CNBLUE and AOA, issued millions of dollars worth of new shares to Chinese firm Suning Universal Media Co.
The influx of investments from Chinese companies can be seen as a boom as it helps South Korean agencies break into the world's most populous country, Kim Gwang Soo, CEO of MBK Entertainment, which manages popular girl group T-ARA, reportedly said.
"Joining hands with companies in China allows us to find our niche more easily. Just like many South Korean artists debuted in Japan with the help of local talent agencies, T-ARA is doing the same in China," Kim was quoted as saying.
But some industry analysts believe that too much Chinese investment could backfire, especially when South Korean agencies begin sharing their top trade secrets to their overseas investors. There is also the danger of South Korean content becoming influence by Chinese investors, and changing the quality of K-pop entertainment that has brought the industry success in the first place.
"Chinese capital is a boom to K-pop's expansion in the short term," a marketing official from a South Korean music label said, who chose to remain anonymous, reportedly warned. "In the long run, though, it would give Chinese investors the authority to do whatever they want with Korean content."
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Mickey is a writer and digital content creator based in Manila. He is a co-founder of ZAVI App. He has also been bitten by the K-Pop fashion bug - follow him on Instagram @mickjami.
