YG Entertainment

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Y.G. Entertainment Inc.
Native name
YG 엔터테인먼트
Public
Traded as KRX: 122870
Industry
Genre
Founded February 24, 1996
Area served
Worldwide
Key people
Products
Services
  • Publishing records
  • Entertainment agency
Revenue Increase US$150 million (2012)[2]
Increase US$28 million (2012)
Increase US$37.5 million (2012)
Owner
Number of employees
254
Subsidiaries
Website ygfamily.com

YG Entertainment (Korean: YG 엔터테인먼트) is a South Korean entertainment company founded by Yang Hyun-suk based in Seoul, South Korea. The company operates a record label, talent agency, clothing line, cosmetics firm, event management and concert production company, music production company as well as its own music publishing house. The name of the company, "YG", is an abbreviation for "Yang Goon", a nickname given to the Executive Director/Founder Yang Hyun-suk.[3]

Once the home of hip-hop groups Jinusean and 1TYM, its current roster of recording artists are known to be some of the biggest K-pop acts to gain international fame, especially BIGBANG, 2NE1, and PSY. In terms of revenue contribution, Big Bang is the company's biggest act.[4]

A prominent entertainment company in South Korea, its record label is also one of the three big record labels in the K-pop industry, alongside SM Entertainment and JYP Entertainment.[3][5] Official contents by YG Entertainment and its artists have cumulatively garnered more than 7 billion views and are subscribed to by more than 18 million users on individual artists' YouTube channels.

The company officially became a publicly traded company on November 23, 2011. In 2012, YG Entertainment's share prices saw a year-over-year increase of more than 60% due to the increase in publicity following the achievements of multiple artists on the label, especially Psy's hit Gangnam Style.[6]

On September 13, 2014, French luxury giant LVMH's private equity arm, L Capital Asia, announced that it is investing up to US$80 million in YG Entertainment. Headquartered in Singapore, L Capital Asia will be the second-largest investor in YG Entertainment with an 11.5 per cent interest. Yang Hyun-suk, YG Entertainment's founder, has a 28 per cent stake.[7]

History[edit]

Hip-hop roots[edit]

On March 1996, Yang Hyun-suk, a former member of legendary Korean band Seo Taiji and Boys, founded YG Entertainment along with his younger brother Yang Min-suk. During their early years, the company put out groups such as Keep Six, Jinusean, and most notably 1TYM (pronounced "One Time"), who was credited with bringing hip hop to the Korean mainstream. In 1999, the company's artists released their first collaboration album under the name "YG Family".

The label followed with releases from Perry, Swi.T, Big Mama, Lexy, Gummy and Wheesung,[3] with Wheesung eventually becoming Korea's highest selling artist of 2003. The YG Underground label was also created to contain 45RPM and Stony Skunk. In 2001, a second YG Family album was released. Among others, it featured the 13-year-old G-Dragon.[8]

The company grew after signing its first idol singer Seven, who found success in both Korea and Japan and was dubbed "Rain's rival" at the peak of his career. However, a dating scandal in 2009 with then-labelmate actress Park Han-byul, an unsuccessful US debut, and four-year hiatus from the Korean entertainment industry slowed his career's momentum. Se7en's contract with YG expired in April 2013.[9]

Mainstream success[edit]

Big Bang

The company then turned its focus to creating its first idol group, Big Bang. Trainees G-Dragon and Taeyang had been with the company since they were just 13 years old.[3]Big Bang debuted as the youngest group at the time (age 15-18) to lukewarm reception. However, Big Bang skyrocketed in popularity during 2007 and 2008 with G-Dragon's self-composed songs, especially "Lies" and "Haru Haru", which stayed at #1 on the charts for eight consecutive weeks, the longest since, ironically, Seo Taiji and Boys. Girl group 2NE1 debuted in 2009 and quickly achieved success.

Big Bang branched out into Japan and focused on solo activities. Taeyang was the best selling solo artist of 2008. G-Dragon had the highest-selling album of 2009, beating out groups and industry veterans. All members of Big Bang have now released one or multiple albums as a soloist and/or duo, while still being active in film and television. The group completed their first full-fledged world tour in 2012, and continues to tour in Japan and Korea, attracting approx. 800,000 attendees annually.

In 2010, YG made a highly publicized move into a new building, while the old building became a training facility. YG first applied to the stock exchange in mid-2010 but was rejected. It is suspected that the reason was because YG Entertainment had too few active music groups and an unstable cash flow, despite an increase in earnings in 2009. Since 2007, Big Bang contributes to around 70% of the company's annual revenue.

Business expansion[edit]

The label expanded by signing already established acts such as Psy, a renowned rap artist; and Tablo, a lyrical savant from the group Epik High. In Korea, both were known to be rebellious independent acts and had respectively dealt with large controversies. CEO Yang Hyun Suk, a personal friend of Psy, offered to help when Psy struggled financially. However, Psy was hesitant to sign onto the label due to its extravagant image and young roster. It took convincing from his wife to revitalize his career and ultimately create the phenomenon known as "Gangnam Style." Tablo, at the time of his signing, was suffering from depression, as over 200,000 Korean netizens in an online community called "Tajinyo " had falsely accused him of forging his identity and Stanford academic degree. His first meeting with the label's representative was set up by his wife, then YG actress Kang Hye-jung.

Yang Hyun Suk made his television comeback after ten years as a judge on the reality singing competition K-pop Star in 2012, and signed the runner-up of the show, Lee Hi, to her own record deal. She released her debut album a year later at age 16. Other participants on the show, such as Lee Seung-hoon, were signed as potential members for the label's future boy groups. On the second season of the show, both the winner and runner-up, sibling duo Akdong Musician and Bang Yedam respectively, signed exclusive contracts with YG. Singer-songwriters Akdong Musician released their debut album in early 2014 at age 14 and 17. Yang Hyun Suk continues to participate in the third and fourth seasons of the television show.

In an attempt to expand their actor roster in 2014, YG Entertainment acquired T Entertainment's staff and actors such as Cha Seung-won, Im Ye-jin, and Jang Hyun-sung.[10]

YG Entertainment eventually passed the Stock Exchange Commission’s screening to go public on the KOSDAQ on November 23, 2011. The stock price opened at double the anticipated value. The company filed its first annual report in 2012 with a net gross of over 50%. In January 2015, the company invested 100 million USD in a new Gyeonggi-do based industrial complex. The complex will house commercialized K-pop infrastructure, such as spaces for the recording of music and performance facilities, as well as a recreational tourism complex. The complex is slated to be complete by December 2018.[11]

Partnerships[edit]

Music distribution[edit]

YG Entertainment's records are distributed by the following:

KT Music[edit]

In March 2010, seven of the biggest talent agencies in Korea - YG Entertainment, SM Entertainment, JYP Entertainment, Star Empire Entertainment, Medialine, CAN Entertainment, and Music Factory - established a joint venture known as KMP Holdings (Korean Music Power). KMP Holdings is a service platform that aims to provide fair digital music distribution, music service, and television program productions.[12] Many believe this was held to challenge the duopoly on music distribution in Korea by Mnet Media and LOEN Entertainment.

In November 2012, KMP Holdings was acquired by KT Music.[13] The seven agencies behind KMP Holdings formed a collective bond partnership on January 2014. Collectively they purchased 13.48% of KT Music's stocks, leaving the parent company KT Corporation with only 49.99% share in the company.[14]

YGEX[edit]

YG first expanded into the foreign market with Se7en, in a partnership with Nexstar Records, a Nippon Columbia label that managed Japanese releases for Se7en.[15] In 2008, Big Bang signed a three-year exclusive contract with Universal Music for the promotion and distribution of their Japanese releases.[16]

On April 12, 2011, YGEX was established as a partnership between AVEX and YG Entertainment for the promotion and release of all YG Entertainment's material in Japan. Current artists under YGEX include all active YG Entertainment artists.[17] YGEX operates as a joint-label venture between the two companies. Since the beginning of this partnership, YGEX has released Japanese material for GD & TOP, Big Bang, 2NE1, Se7en, and Daesung. There was also a noticeable increase in promotional activities in Japan. Seungri and Daesung were also given the opportunity to host their own Japanese programs.

Artist management[edit]

United Asia Management[edit]

SM Entertainment, YG Entertainment, JYP Entertainment, KeyEast, AMENT and Star J Entertainment are under a joint management agency named United Asia Management since April 2011.[18]

YG KPLUS[edit]

On February 18, 2014, co-CEO Yang Min Suk announced that K-Plus, a major model agency, signed a strategic partnership and shared investment agreement with YG Entertainment. Due to the recent trend in Asia of successful model-turned-actors, YG is helping these models transition into mainstream media by providing them with opportunities in television and films. K-plus Model Agency currently houses over 170 models including internationally well known models such as Kang Seung-hyun and Park Heyong Seop; as well as model/actors Lee Sung-kyung, Nam Joo-hyuk, Choi Sora, and more.[19] Since the partnership, K-Plus models have been heavily used in YG recording artists' music videos, as well as YG owned brands' advertisement campaigns.

Fashion and beauty[edit]

Nonagon[edit]

NONA9ON is a luxury street-wear brand founded by YG Entertainment and Samsung’s textile subsidiary company Cheil Industries in early 2012. Originally named Natural Nine, the brand was revamped and will launch in Spring/Summer 2015.[20][21]

Concert production[edit]

Live Nation[edit]

YG Entertainment first teamed up with Live Nation in 2012 to produce Big Bang Alive Galaxy Tour 2012. Plans for a world tour were in place in 2011 until several members of Big Bang faced problems with the law, causing it to be postponed until the following year. This marks the first time Live Nation has worked with an Asian artist.

Subsequently, Live Nation also directed "2NE1 New Evolution World Tour 2012", and G-Dragon 2013 1st World Tour: One of a Kind. Live Nation first approached YG Entertainment with the idea as they had seen the growth potential of K-pop. Mats Brandt, General Manager of Live Nation Asia, said in an interview: "...of all the artists we have decided to focus on the talents of Big Bang. Big Bang has the talent, thus they have the best chance at becoming a global artist."[22]

Asiana Airlines[edit]

As one of two of Korea’s major airlines, Asiana Airlines signed a deal with YG Entertainment on January 2013 to provide transportation to its artists to and from domestic and international destinations at no cost. In return, YG Entertainment will be placing the airline’s logo throughout their international concerts and tours.[23]

Philanthropy[edit]

YG Entertainment pledged to donate 100 won for every album sold, 1% of all merchandise sales, and 1,000 won for every concert ticket, to charities. In 2009, they raised US$141,000, and in 2010 $160,000.[24][unreliable source?] YG Family have also directly delivered US$4,400 worth of charcoal to families in need during the winter time.[25] The company has also announced that it would be donating around US$500,000 for disaster relief to Japan after the 2011 Tōhoku earthquake and tsunami.[26]

In 2013, founder and CEO Yang Hyun Suk, made headlines when he donated all of the dividends he received as a shareholder of YG Entertainment to help young children needing surgery. His dividends totals to around US$1 million.[27][unreliable source?]

YG Family[edit]

Recording Artists[edit]

1Psy (2001) was formerly part of LNLT Entertainment before transferring to YG Entertainment in 2010. He released his fifth album through his new label. Psy's sixth album which contains the international hit Gangnam Style is his second album under YG Entertainment.
2Epik High (2003) transferred from Woollim Entertainment after their contracts had expired. After Tablo signed as a soloist in 2011, the remaining members, DJ Tukutz and Mithra Jin were signed on the following year where they also released their seventh album 99.