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NewJeans and its 'copycat': Did HYBE's multilabel system stab itself in the back?

Girl group NewJeans, left, and ILLIT [ADOR, BELIFT LAB]


The walls are starting to crack in HYBE’s multilabel fortress with Min Hee-jin — head of its subsidiary ADOR, the agency behind NewJeans — calling the company a “copycat” just a month before the girl group releases new music on May 24.

The conglomerate behind BTS started buying smaller K-pop agencies in 2019 in an effort to go public. It has since hailed its self-proclaimed “multi-label system” as the secret to becoming a K-pop conglomerate with 65 subsidiaries under its wing.

But five years have passed, and relations between the 11 groups — not counting soon-to-debut girl group Katseye — are far from harmonious: NewJeans' producer referred to sister group ILLIT as a “fake NewJeans,” and the parent company is threatening to fire the CEO gone rogue.

Has the multi-label system failed, or is this the moment where HYBE’s diversified portfolio truly comes to prove itself as the sturdy foundation that raised it up?

ADOR CEO Min Hee-jin, left, and girl group NewJeans, managed by HYBE subsidiary ADOR [ADOR]


“Copycat” vs. “Usurper”

Long story short: Min claims that HYBE stole ideas she created for NewJeans and repurposed them for the debut of girl group ILLIT. HYBE accused Min of plotting to hijack ADOR’s control from HYBE.

News broke on Monday that HYBE, the K-pop powerhouse that owns 80 percent of ADOR, had initiated a probe into executives of its subsidiary, including CEO Min, for allegedly leaking company data and seeking outside consultation in order to seize control of ADOR behind the parent company's back.

Min controls 18 percent of ADOR, and ADOR executives own the remaining 2 percent. Min bought her stake from HYBE for 1.1 billion won ($802,000) last year.

HYBE’s audit team visited ADOR's offices to retrieve data on Monday morning and began efforts to obtain related statements while also demanding that ADOR's executives issue a formal explanation for their actions and that its board of directors hold a shareholders' meeting. HYBE threatened legal measures should those higher-ups fail to respond by Tuesday.

Min retaliated on Monday evening, calling HYBE and ILLIT a “NewJeans copycat.”

Girl group ILLIT debuted on March 25 with its EP ″Super Real Me″ [BELIFT LAB]


ILLIT is a five-member girl group that debuted on March 25 with “Super Real Me” under Belift Lab, which HYBE co-established with CJ ENM in 2019 and fully acquired last August. ILLIT has been topping music charts with its track “Magnetic” but has also been accused of bearing an apparent resemblance to NewJeans in both its visuals and its songs.

“ILLIT has been copying NewJeans in all areas of activities including hair, makeup, costumes, choreography, photos, videos and event appearances,” Min said in an official statement on Monday evening.

“ADOR made an official complaint to HYBE and Belift Lab on the string of events that has been taking place against NewJeans. But rather than admitting to their wrongs, they have only been making excuses and stalling to give a detailed answer [….] It seems that HYBE, Belift and [HYBE] chairman Bang Si-hyuk believe that they can end the situation by kicking Min Hee-jin out.”

HYBE CEO Park Ji-won responded with an email to company employees, dubbing the situation “an apparent aim to seize control over the company.”

“The people who are responsible for the situation are refusing to properly respond to the audit,” read the message. “We have found that the issue at hand began without any relevance to the debut of ILLIT. We are planning on taking our next steps after a thorough audit of the situation.”

Boy band BTS [BIGHIT MUSIC]
[PLEDIS ENTERTAINMENT]


A foretold misfortune?

The industry stands divided over who’s at fault, especially with such limited information other than the story of the to-and-fro between the two companies — or company, singular.

But one thing is clear: This is the defining opportunity for HYBE to demonstrate whether its multilabel system can survive an internal dispute without shattering.

ADOR, established in 2021, was the first independent label wholly formed under HYBE, which was working to expand its artist lineup under the multilabel setup at the time. Before that, HYBE had co-established Belift Lab with CJ ENM in September 2018 and acquired existing K-pop agencies including GFriend’s agency Source Music in July 2019, Seventeen agency Pledis Entertainment in May 2020 and Zico’s agency, Koz Entertainment, in November 2020.

HYBE has 65 subsidiaries under its wing as of April, including companies in the United States, China, Japan and Singapore. It’s the 50th largest company in Korea, based on the market cap, a feat achieved just four years after going public on the Kospi.

A “family” began broiling the very day that Big Hit Entertainment began buying other companies.

MBC entertainment show “Hangout with Yoo,” which aired a teaser for its upcoming episode on April 20, came under fire for describing HYBE’s headquarters as “the foundations laid out BTS and built up by Seventeen,” top, and changed the subtitles two days later, above. [SCREEN CAPTURE]


BTS fans blamed the company for “wasting the money that BTS made” by buying other companies and caring for other artists, while devotees of artists whose companies HYBE acquired have argued tirelessly that those artists' achievements are theirs and theirs alone, rather than products of HYBE's capital.

In fact, MBC entertainment show “Hangout with Yoo,” which aired a teaser for its upcoming episode on April 20, came under fire for describing HYBE’s headquarters as “the foundations laid out BTS and built up by Seventeen.” ARMY, BTS's fans, slammed the program for “belittling” BTS’s credit to HYBE’s legacy, and the MBC show changed its subtitles two days later.

“A multilabel system is actually quite common in other countries, just not in Korea, so the multilabel system itself isn’t the problem,” said pop music critic Hwang Sun-up.

“SM Entertainment and JYP Entertainment also operate different production teams, but they all started out from the same SM or JYP root, which is why artists often collaborated or held events together. But HYBE artists and labels all came from different backgrounds, so it’s natural that they don’t mix and only recognize each other as competition.”

Another Fifty Fifty?

Min’s attempted coup has been likened to that of girl group Fifty Fifty, which made headlines last year when its former members tried to break free from their agency after seeing unexpected success in the global market.

ADOR CEO Min Hee-jin [ADOR]


Min joined HYBE, then Big Hit Entertainment, in 2019 after working at SM Entertainment for 16 years and was appointed to lead ADOR in November 2021. She successfully launched girl group NewJeans the following year, releasing a series of hit songs such as “Attention,” “Ditto” (2022), “Hype Boy” and “OMG” (2023) that put the quintet at the top of the K-pop queendom.

Min was once hailed as the “genius producer” who directed “everything” related to NewJeans — from its music and visuals and to its brand collaborations. And as is often the case with geniuses, Min had an ego that wouldn’t settle for remaining “a” producer within a conglomerate. Critics have pointed to that as the core of the rift.

“The whole issue comes down to Min Hee-jin’s personal ambitions,” music critic Jung Min-jae said.

“Min Hee-jin may have had the final say in NewJeans, but as long as she works under the HYBE umbrella, then it’s the company’s right to use that IP [intellectual property] to create other groups. And the argument of whether NewJeans and ILLIT are similar aside, Min should have tried to fix the issue within the company, not take it outside and get a third party investor involved.”

Even Min herself has taken references from other groups, weakening her plagiarism argument, according to critic Hwang.

“No creation ever comes entirely on its own,” he said. “It’s really egocentric of her to claim ILLIT’s creation for herself and use that as excuse to go behind her parent company’s back. And regardless of whether ILLIT is similar to NewJeans, she really has neglected her duty as a K-pop producer by hurting a young group by publicly calling it out and labeling it ‘fake.’”

Girl group NewJeans [ADOR]


The ultimate test has come

The patched-up company structure may have caused this kerfuffle, but it may also be the very diversified portfolio that will get HYBE through its ordeal, critics and analysts agreed.

Min has stressed time and again that she joined HYBE because the company promised her “absolute independence” as a creator, even saying that “it didn’t have to be HYBE” in a magazine interview last January.

“I have seen so many conflicts arise due to the lack of understanding between those in the creative field and those in management,” she said during the interview.

“A lot of people talk about the ‘HYBE capital,’ but I can’t agree […] I had been offered investments of similar sizes to that of HYBE from other places. I had a lot of choices, and my priorities would always have been the independence of creation and noninterference. It didn’t have to be HYBE.”

Girl group NewJeans during the recent Seoul Fashion Week event on Feb. 1, 2024 [YONHAP]


Still, that does not mean that Min Hee-jin's creations belong to Min Hee-jin alone. NewJeans the girl group and all IP created under the name are ultimately the property of HYBE — meaning that NewJeans can continue without Min Hee-jin, should the situation require it.

“It’s difficult to tell how the conflict arose in the first place only on the information that has been disclosed so far,” said music critic Kim Young-dae. “But this is the first time we've witnessed such a clash in K-pop among affiliates of a multilabel system. This could really serve as a testing bed for what problems a multilabel system could include and how they will be solved.”

Analysts Park Su-young from Hanwha Investment & Securities, Lee Hwa-jeong from NH Investment & Securities and Ahn Do-young from Korea Investment & Securities all agreed that the multilabel system will minimize HYBE's overall risk and bolster its performance in the long run.

“Each label has a strong lineup of artists, such as BTS and Tomorrow X Together at BigHit Music, Seventeen at Pledis Entertainment, Enhypen at Belift Lab and Le Sserafim at Source Music,” Lee said. “HYBE as a whole is decreasing its dependence on a single label, and all labels are efficiently creating new content and groups. The best scenario would be for the conflict to be resolved swiftly and smoothly, but HYBE’s mid-to-long-term growth dynamic won’t be damaged much.”

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]