1989–2000: Creation and first-generation artists After graduating from
California State University, Northridge in the United States,
Lee Soo-man returned to Korea and in 1989 established what was then known as "SM Studio" in the
Apgujeong neighborhood of
Gangnam,
Seoul and signed
hip hop singer
Hyun Jin-young. While Hyun's music was well received, he was later arrested on charges of
marijuana and
methamphetamine use, from which his career never fully recovered. SM lost more money when the company that distributed Hyun's albums went bankrupt. Lee subsequently decided to focus on debuting
Japanese-style idols, ensuring that his artists, nurtured by a training system, had a clean image, in addition to singing and dancing skills. In February 1995, the company changed its name to SM Entertainment and set up its capital fund. SM developed an in-house system that looked after all aspects of its artists' careers. SM launched a string of successful artists, girl group
S.E.S. in 1997, boy band
Shinhwa in 1998, R&B duo
Fly to the Sky in 1999, and soloist
BoA in 2000. Jung Hae-ik was
CEO during this period, and was succeeded by Kim Kyung-wook in 1998.
2000–2005: Affiliations and second-generation artists at KCON in 2015. In 2000, SM became the first entertainment company to be listed on
KOSDAQ, and established an affiliate company called Fandango Korea to operate its online business. The early 2000s saw the disbandment of both H.O.T (in 2001) and S.E.S (in 2002). Shinhwa departed to a new agency, and new acts like the girl group
M.I.L.K. and the boy band
Black Beat failed to attain the popularity of previous SM artists. In January 2001, the company founded an overseas division,
SM Entertainment Japan, in collaboration with Japanese record label
Avex Trax and television production company
Yoshimoto Kogyo, to promote BoA in the Japanese market. In 2003, SM became affiliated with Starlight Academy System, a private academy that trained aspiring singers and actors. That same year, the company debuted five-member boy group
TVXQ. The following years saw the debuts of artists such as
TRAX (2004),
The Grace (2005), and
Super Junior (2005).
2005–2010: Expansion and international artists In 2005, Kim Young-min became the company's third CEO, under whom several artists debuted with a view to promoting outside of South Korea. Artists produced by SM during this period included Chinese-born soloist
Zhang Liyin (2006), Japanese-language soloist
J-Min (2007),
Girls' Generation (2007),
Shinee (2008), and
f(x) (2009). In April 2008, SM debuted a Mandarin-language sub-unit of Super Junior, named
Super Junior-M. In September 2008, SM announced plans for BoA's debut in the American market, under a newly formed subsidiary label named SM Entertainment USA. In May 2008, the
SM Art Company opened under co-CEO Pyo In-bong, with a focus on producing theatrical works. The company's first venture was a production of the American musical comedy
Xanadu, starring Super Junior members
Heechul and
Kangin.
2010–2012: Joint and further ventures In February 2010, after two decades on SM's board of directors, founder Lee Soo-man resigned from his position in order to "focus more energy on SM's overseas business, new business management, and artist development." In March of the same year,
KMP Holdings was established as a joint venture between SM,
YG Entertainment,
JYP Entertainment,
Star Empire, Medialine, CAN Entertainment, and Music Factory. The firm's first release from SM was Super Junior's fifth studio album,
Mr. Simple, which marked the end of SM's self-distribution. In April 2011, SM, YG, JYP,
KeyEast, AMENT, and Star J Entertainment came together to form United Asia Management, a joint investment agency geared towards advancing Asian music worldwide. That August, SM joined with Thai media company
TrueVisions to create an international joint venture,
SM True. in June 2016 In 2012, SM debuted the large-scale boy group
Exo, split into two units in order to promote in Korea and China simultaneously. In February, SM acquired Hawaiian travel firm Happy Hawaii and launched SMTown Travel, a new business initiative specializing in travel and tourism under Kang Jung-hyun. Later that year, SMTown Travel offered package deals for overseas fans attending Super Junior's
Super Show 4 Tour encore concerts in Seoul. In March, 47 of SM's recording artists became stockholders of the company. Kangta, BoA, and most members of Super Junior and Girls' Generation received 680 shares each (with a value of approximately US$27,200 per person), while members of more recent groups like Shinee and f(x) received 340 shares each (with a value of around US$13,600 per person). In August, SM held an art exhibition at the
COEX Convention & Exhibition Center, and collaborated with Visa and KB Kookmin Card to begin printing SM artist cards. That same month, Korean TV personalities
Kang Ho-dong and
Shin Dong-yup announced that they had signed exclusive contracts with SM's new broadcasting subsidiary,
SM Culture & Contents (SM C&C), marking SM's expansion into television. The next month, in September, SM C&C merged with AM Entertainment (which then represented top actors such as
Jang Dong-gun,
Kim Ha-neul, and
Han Ji-min), and two other TV personalities,
Lee Su-geun and
Kim Byung-man, announced that they had also signed with SM. In November, KMP Holdings was acquired by
KT Music, and in June 2013, KT Music absorbed KMP's distribution network.
2013–2016: Third-generation artists and new music ventures going to a recording of
Music Bank in June 2019 In 2013, SM C&C acquired Hoon Media (a production company led by Lee Hoon-hee, responsible for KBS serials
1 vs 100,
Heroines 6,
Qualifications of Men, and
Music Bank) and
Woollim Entertainment, a record label responsible for artists such as
Infinite. In January 2014, SM and the other six talent agencies behind
KMP Holdings formed a collective bond partnership and bought 13.48% of
KT Music's stocks, leaving parent
KT Corporation with 49.99%. In February, SM acquired a share in
Baljunso, an indie record label founded in 1991 by Kang Byung-yong. On August 1, SM debuted
Red Velvet, its first girl group since f(x) five years prior. In August 2015, SM partnered with sports marketing company IB Worldwide to create Galaxia SM, responsible for golfer
Park In-bee, gymnast
Son Yeon-jae, and
Choo Shin-soo, right fielder for the
Texas Rangers. On November 6, the 10th anniversary of
Super Junior's debut, SM announced the creation of the group's own sub-label,
Label SJ. In late 2015, SM partnered with modeling company ESteem to promote self-owned content and network. The venture later expanded its acting division through the acting debuts of models Ki Do-hoon and Lee Cheol-woo. In 2015, SM had reported revenues of KR₩325 billion (approximately US$287 million) and a net income of KR₩21.7 billion (US$19 million). during a recording of
Music Bank in October 2018 In January 2016, founder Lee Soo-man held a conference at the SM Coex Artium, announcing plans for a new boy group,
NCT, an acronym for Neo Culture Technology, with "unlimited members". Its first sub-unit, NCT U, released two debut singles in April 2016. NCT added two more units that year –
NCT 127 in July 2016 and
NCT Dream in August 2016. At the beginning of 2016, the company opened a restaurant,
SMT Seoul, and also established a series of stores selling branded foods under the name SUM Market. On February 11, 2016, the Chinese e-commerce giant
Alibaba Group acquired a 4% minority stake in SM Entertainment for US$30 million. On May 5, 2016, SM released the first single under its newly established
EDM label
ScreaM Records, "Wave", featuring
f(x) members
Amber and
Luna and produced by Xavi & Gi and E-mart's Electro Mart. ScreaM Records opened as part of SM's New Culture Technology 2016 project, under which SM also initiated the digital music channel
SM Station and a number of mobile apps. In late 2016, SM began organizing a
League of Legends tournament, called SM Super Celeb League, in which SM artists
Heechul and
Baekhyun played against both professional gamers and fans from South Korea and China.
2017–2022: NCT expansion, business expansion and the end of "SM 2.0" era In March 2017, SM acquired the independent record label
Mystic Entertainment, becoming the label's largest shareholder. In March 2018, SM acquired entertainment agency
KeyEast and drama production company FNC Add Culture, a subsidiary of FNC Entertainment. Two months later, FNC Add Culture changed their name to
SM Life Design Group. On October 2, 2018 it was revealed SM had acquired Million Market, home to singer-songwriters, rappers and R&B singers. In October 2018, SM partnered up with
Trans Media of
Indonesia, which was owned by
CT Corp. In February 2019, Trans Media and SM signed their Heads of Joint Venture Agreement together. Later, on the same month, SM opened its Indonesian office in Jakarta. at a press conference in October 2019 In January 2019, SM debuted NCT's China unit, boy group band
WayV, managed by the sub-label Label V. On August 8, 2019, SM and
Capitol Music Group – which earlier signed NCT 127 in April 2019 – announced
SuperM, a
supergroup consisting of
Taemin from Shinee,
Baekhyun and
Kai from Exo, and
Taeyong,
Ten,
Lucas and
Mark from NCT units NCT 127, NCT Dream and WayV, in the 2019 Capitol Congress event in Los Angeles. The group debuted in October 2019. In November 2019, SM signed with
Creative Artists Agency for representation in all areas. In March 2020, SM appointed production head
Lee Sung-soo as the company's CEO, as well as
Tak Young-jun as SM's chief marketing officer (CMO). In April 2020, SM and
Naver signed a
memorandum of understanding (MOU) with the purpose of expanding the global reach of concerts. The joint effort led to the creation of
Beyond Live, a series of online live concerts, which were created in light of the ongoing
COVID-19 pandemic. The concerts were hosted on Naver's
V Live app and made available to audiences from more than 200 countries. On August 3, Naver invested ₩100 billion in SM, intended for their subsidiaries SMEJ Plus and Mystic Story, as well as Beyond Live. SM also integrated its fan club service into V Live's Fanship platform. A day later, SM announced its partnership with
JYP Entertainment to establish Beyond Live Corporation, a joint company for producing Beyond Live concerts. SM Coex Artium closed in June 2020. On June 12, it was announced that SM partnered with the
Seoul Philharmonic Orchestra to release orchestral versions of their artists' most popular songs under the label
SM Classics.
Aespa, SM's first new girl group in six years, debuted with their digital single "
Black Mamba" on November 17. in November 2021 SM partnered with to launch
SM Institute, an educational facility to train local and international aspiring artists; the institute opened in March 2021. On December 27, 2021, SM announced the creation of their rotational all-female supergroup Girls On Top. The group's first lineup,
Got the Beat, consists of
BoA,
Taeyeon and
Hyoyeon from Girls' Generation,
Seulgi and
Wendy from Red Velvet, and
Karina and
Winter from Aespa. The group released their debut single "
Step Back" on January 3, 2022. On October 1, 2022, an amusement park collaboration between SM and
Everland was launched, based on artists and concepts within the
SM Culture Universe (SMCU), called
Ever SM Town. On December 1, SM announced that the company would set up its Southeast Asian headquarters in
Singapore, which would manage joint ventures in Indonesia, Thailand and Vietnam. The company planned to launch retail businesses such as cafes, merchandise stores and pop-up exhibitions in the region. At the end of the year, SM terminated its production contract with founder Lee Soo-man's company Like Planning.
2023–present: Announcing "SM 3.0" era and major adjustments at the 2023 Melon Music Awards On February 3, 2023, SM released a video titled "SM 3.0: Producing Strategy Multi 'Production Center/Label' System" on its official YouTube channel, in which co-CEOs
Lee Sung-soo and
Tak Young-jun revealed that the label was passing from its "2.0" era to the "3.0 era", with major adjustments to come concerning the label's operations. These included shifting from a one-man production system led by founder and executive producer Lee Soo-man to a system under which multiple production teams, both internal and external, would supervise music production and artist promotions. A goal of the new system was to avoid production delays. On February 6, it was announced that
Kakao had purchased a 9.05% stake of SM Entertainment, becoming the company's second-largest shareholder at the time. The next day, Lee Soo-man filed an injunction against SM Entertainment for its issuance of new shares and convertible bonds to Kakao, stating the deal between the companies was "illegal" without his permission as the largest shareholder. Two days later, it was announced that
Hybe Corporation had become SM Entertainment's largest shareholder after acquiring a 14.8% stake from Lee Soo-man for approximately 422.8 billion won, with the company subsequently acquiring
Galaxia SM's 1% stake on March 3, increasing their share to 15.8%. On March 3, 2023, a South Korean court issued an injunction against SM Entertainment's deal with Kakao. On March 6, 2023, Kakao launched a tender offer bid, in which it sought to acquire 35% of SM Entertainment's shares, in addition to the 4.9% stake already owned by the company. On March 12, 2023, Hybe announced that it no longer planned to acquire a majority stake in SM Entertainment, saying that the bidding war with Kakao could "damage shareholder value". On March 24, 2023, Hybe announced that it would sell its entire stake in SM Entertainment to Kakao by participating in its tender offer. On March 28, 2023, Kakao announced that it had successfully acquired a 35% stake in SM Entertainment through its tender offer bid, resulting in a combined 39.87% stake between Kakao and its subsidiary,
Kakao Entertainment, making it the largest shareholder. Hybe sold half of its stake in SM to Kakao, leaving it with 8.81%. On March 31, 2023, during the shareholders' meeting, SM Entertainment appointed chief financial officer (CFO) Jang Cheol-hyuk as its new CEO. Lee Soo-man declared the meeting "the end of an era" for the company he founded, stating he was "moving toward the future". The following day, SM announced the establishment of its
music publishing subsidiary,
Kreation Music Rights. SM debuted its new boy group
Riize in early September, featuring former NCT members Sungchan and Shotaro. The final NCT sub-unit,
NCT Wish, made their debut in February 2024. On March 18, SM's music publishing subsidiary Kreation Music Rights launched new production label Kustomade as part of SM's multi-label strategy, managing soloist
Kim Woo-jin and Yelo, a member of the production team MonoTree.
Hearts2Hearts, an eight-member girl group and SM's first since Aespa in 2020, debuted in February 2025. In May 2025, SM invested in independent label Great M Entertainment, becoming the label's second largest shareholder. Hybe sold all of its remaining shares in the company to
Tencent Music, with the transaction taking place on May 30. In November, SM launched a new music label called SMArt, helmed by Kangta.
Yim Si-wan was the first artist signed to the label. ==Divisions==