SM Entertainment, 'Second Largest Shareholder' Collaborates with Tencent Music in China to Produce New Idol

[Financial News] SM Entertainment and China's largest music platform Tencent Music Entertainment Group (TME) are embarking on a strategic collaboration to target the global market.
According to SM Entertainment on the 29th, the two companies signed a Memorandum of Understanding (MOU) today and agreed to establish a comprehensive cooperation system.
This collaboration significantly expands the scope of cooperation beyond the existing music distribution-focused partnership to include the joint production of a new idol group targeting the Asian market, IP business, and local performances. As TME recently acquired SM shares previously held by HYBE, becoming a major shareholder, the cooperation between the two companies has been intensified.
In particular, this collaboration includes the introduction of a local idol group in China with the goal of debuting within the next 2-3 years. SM will be responsible for the entire production process, including casting, training, and producing, while TME will handle local promotion, album, and music distribution. 
In the IP business, a variety of projects such as physical and digital photocards, character merchandise, pop-up stores, and video content will be jointly developed in China.
In the performance sector, cooperation will be strengthened for SM artists' tours, including the 'SM Town Live' concert scheduled to be held in Hong Kong in 2026. Additionally, SM plans to widely target online fans through live streaming services utilizing its 'Beyond Live' technology.
This strategic partnership, combining the strengths of both companies, is expected to be a crucial turning point for expanding SM's global influence and solidifying its position in the Chinese market, creating new business models and strengthening its position in the global market.

jashin@fnnews.com Shin Jin-a Reporter