Role in the society of the entertainment industry - Essay Example

Role in the society of the entertainment industry The entertainment industry is an essential component of the social lives of many people. Its role in the society is crucial as it accounts for the social, economic and political aspects in many social settings. Each of the three aspects encompasses entertainment in one way or another. S.M Entertainment is a key player in the entertainment pursuit. The company targets both individuals and corporates in a bid to realize its operational goals and objectives that define its business aspects. It has gained a competitive position in the world entertainment industry by employing entrepreneurship, creativity and innovativeness in its business undertakings. The various variables that define each of the three are highlighted in detail by evaluating and assessing the environment that the company undertakes its business in. Introduction Entrepreneurship opportunities have consistently kept rising all over the world especially with globalization and internationalization of most businesses across countries. The world markets are gradually becoming a global village in the process. On a more specific ground, the entertainment industry is a key industry the world. Globalization and entrepreneurial opportunities have opened up the entertainment industry markets both locally and international. In this regard, business aspects of any given entertainment organization have flourished, enhanced by creativity and exploitation of the emerging opportunities in the market. S.M. Entertainment is one of the most entrepreneurial companies in the world entertainment arena. Basing its foundation on a humble beginning, the company has successfully become one of the world leading companies in the entertainment industry. Definitions relating to entrepreneurship have similar features in that they tend to suggest that it involves planning and starting a business, taking the risks involved, taking the opportunities that come with the business and producing innovations that can be measured (Barbara, 2009, p.67). Arthur Cole one of the professors in Harvard defines entrepreneurship in the conceptual way as a purposeful event to initiate, maintain and come up with an enterprise that is profit oriented (Peter, 2006, p. 103).On entrepreneurial basis, the company has consistently evaluated social and economic factors in a bid to establish its operational environment. Innovation is a critical aspect to consider in this pursuit. Creativity and innovativeness is a crucial component of doing business. The company has from time to time developed different product and service packages of its market share. This has been enhanced by exploitation of contemporary and emerging technologies that best suited for the entertainment industry. This report therefore is basically an assessment and an evaluation of the entrepreneurial and innovativeness aspects of the company and an assertion of the company’s position in domestic and international business. One of the outstanding business ventures whose impacts have been noted and whose technological advancements have taken the world at a storm is the S.M. Entertainment. The individual who bears the ability, energy and the vision to create a new business is actually the cornerstone on which the entity begins and thrives (Acs and Audretsch, 2008, p.171; Acs and Audretsch, 2008, p.128). However, the person should be equipped with a variety of factors and important resources so as to create a meaningful enterprise. This has been the driving spirit in S.M Entertainment. To enhance meeting the interests of this report, both qualitative and quantitative research methods will play a significant role. However, limitations that pertain to the inadequacy of vast information about the company may be lacking. This is due to the fact that many studies concentrate on the entire industry and thus makes general arguments that may or not apply in the context of S.M Entertainment. The report will however assume that the available generalized information has taken into account all major stakeholders in the industry and that the obtained information through qualitative and quantitative research is based on its market trends over time. Structure and outlay of S. M. Entertainment The business has evolved largely from scratch to form one the greatest ventures in the heart of whose technological innovations are diverse. This is an independent business based in Korea founded by Lee Soo-man comprised of a standing record label, talent agency, producers and publishers of pop music (Sergio, 2007, p.116-119). The Star Museum entertainment was initially an abbreviation of the names of the founder but later changed its name after more people came into the organization. It has currently been able to record famous artistes in the Korean industries such as The Grace, Kangta, Super Junior and Zhang Liyin among other groups (Sergio, 2007, p.116-119). It also houses several artists such as the Lee Yeon-hee and co-publishes the Avex Trax releases for the Japanese artists (Sergio, 2007, p.116-119). The company has evolved from a small to a large entity through many battles and challenges characterized by proper planning and resource allocation. Historically, the enterprise started as a mere boys band that was went by the name H.O.T. and a girls band by the name S.E.S. which later became successful and attained popularity through production of own songs as well as with other groups. The company in the long run was involved in several acts such as a four member rock band called the Trax, a four member girls group called the Grace and a nine-member girl group called Girls Generation. Eventually on March 2012, the owners together with twenty seven artistes joined hands to form a company and became the earliest stockholders of SM Entertainment which would be the beginning of their mission to partake in the growth of the entity and attain the long run visions (Beise, 2004, p.246). Ideas and theories of creative industries Entrepreneurship is a drive towards economic growth achievement. Organizations drive change through the provision of jobs and a chance to become part of fast expanding organizations. With many of the firms restructuring and downsizing their organizations and with governments reducing their employment opportunities to cut spending, entrepreneurship is the most probable way of growing sources of new jobs and the procedure for absorbing displaced workers (Miles and Green, 2008, p.12). The government seen the measure of the help that entrepreneurship has fostered by creating activities to empower individuals that lack these jobs. Empowerment zones are the activities that create funds for the achievement of entrepreneurial enterprises in certain areas that require additional development strategies and works to boost economic activities. The appreciation of entrepreneurial activities to the national growth one must consider the various activities and how entrepreneurship and innovation positively influence the economy. Innovation is said to be the specific instrument for entrepreneurs and an act that will endow items and resources with a new way to create wealth. The new enterprise discovers and exploits new and previously hidden capacities that can be used to create wealth and as such act as catalysts towards economic change. The ideas and theories of the entrepreneurs should be straight, achievable and should always be driving towards the accomplishment of a positive economic change. Theories relating to the activities of new business actions should have in mind the items required and necessary to set-off. The factors to be considered should meet the costs relevant, the possibilities available, and resources available and also meet the need of the consumer. Ideas on innovations should also cover product standardization of products, high training and consistency. S.M Entertainment Entrepreneurial Opportunity SM Entertainment has had tremendous growth since its inception in the market. The company was formed in the year 2008 in South Korea and has two subsidiaries namely SM Academy and SM Tin Tin Entertainment that both specialize in k-pop groups. The founder, Lee Soo-man began his career as a coffeehouse singer while still in Seoul University in 1972. During the first three years as a singer, Lee did not gain popularity until much later in the year 1976 when his hits gained popularity and he became famous. In 1980, he formed a heavy metal band that later on faced challenges due to the censoring of the government and changes in the structure of government procedures. As a result, he gave up and decided to go back to the university and pursue his master’s degree in engineering majoring in robotics. In 1981, he joined the California State University to do the degree but however noted the big changes that were taking place in the music industry at the timer in California. He saw a chance to develop and the potential that the industry held for him and decided to explore that chance as well as bring that revolution to Korea. In 1985, he finished the degree and came back to Korea to pursue a career in the music industry which involved singing, hosting television shows and radio programs. The High-five Of Teenagers (H.O.T.) was formed in 1996 and comprised of five teenagers and composed music fit for the young generation such as rap, ballads dance and rock. The group was successful and influenced many boys’ bands across Korea and the music scenes and became very popular especially with albums such as We Hate All Kinds of Violence, Candy, Wolf and Sheep and We Are the Future. Many of their writings and compositions hit and were featured in adverts and even owned their soda brand. In 1997 to 2002, the Sea, Eugene and Shoo (S.E.S) hit in the pop industry under S.M Entertainment. It was the first female group to be successful and enjoyed phenomenal popularity. It was faced with rivalry from opposing groups and competition until they split and the members began solo performances. In 2001, they decided to disband and pursue solo careers since they were not gaining enough royalties. Other major groups were formed such as the Girls Generation in 2007 and which has had many albums produced since as well as advancements in the industry. Super Junior was formed in 2005 and comprised of thirteen members who have had huge success in the industry and have released over 20 records. Being the best selling in the industry for three consecutive years, they have proved to be best k-pop artists over the time. They have major sub-groups who target different audiences and acting careers which has influenced their success. How and why S.M Entertainment is creative and innovative The various strategies adopted by SM Entertainment have been creative and very innovative and have thus led to their productivity and success in the market. This creativity has developed their market structure to cover international markets and is based on the production process, marketing, distribution, communication, financial management and in the customer relations As the market widens, the company is setting eyes on further markets beyond the state. The company has venture to seek opportunities in the Asian market due to the completion that has arisen and the decrease in the album sales within the country. The increase in the international artists presenting in Asia has led to venture to exterior markets by the k-pop artists so as to cover losses from the sale of their albums. However, currently the entertainment company still forms the basic shareholding capabilities for the industry and has major competition. Still the music has risen to cover over fifty percent of the country’s entertainment. Digital music has grown to cover fifteen percent of the music industry while the Japanese music caters for a seventy percentage of Asian music. The firm has strategies and trends that ensure international standards are set and executed properly and efficiently. The company has further formed the KMP Holdings and the United Asia Management which are under the mainstream company but under different management so as to raise the shareholders index and increase the stakeholders and the customers. This is creativity defined in the market structure and that has promoted the gain that the firm anticipates in the future. Over and above the mentioned areas of creativity and innovativeness, the training mode that the company employs continues to depict an aspect of an innovative entertainment industry participant. The training modes are customized for both individuals and corporates, suited to account for specific variables that are unique to the artists. Many members are also bilingual, thereby allowing for diversity within and without the company. The bringing together of numerous countries and the extension of products and services outside the local region is another innovative aspect of the company. Local have even a more advantage due to the uncountable auditions that the company organizes and undertakes. Marketing is another innovative aspect of the company. The company outsources marketing strategies, thereby diversifying on its capacity and outreach to the artists and other incorporated markets. A significant marketing innovativeness is depicted by the endorsement deals that engage the participation of Girls Generation. The LG phones play a significant role in this pursuit. Moreover, the company’s engagement in late night and early morning shows enhances marketing innovativeness since this marketing strategy is unique in the industry. David Latterman and Killy drive this innovativeness. Today, the company continues to pursue more marketing-oriented strategies by coming up with even more sophisticated marketing ideas and strategies. This is crucial in tapping the American market where customer attraction is all about conviction and influence on the buying behaviour of consumers. Performance and production process The production process utilizes the current and divine technology to be able to produce clear films for consumer satisfaction. The production process also encompassed passionate and intelligent youth with talents recognized by the company for recruitment. For instance, Lee formed the Super Junior group; the number had to be maintained at thirteen. This was based on the demands of the public when more teenagers were recruited to join the already existing group. The training is conducted professionally and youth have to present in the right attire so that the public image and expectations are met. Earlier on the mode of production was based on the Jonny’s mode that held more of the Korean trends and promoted the presentation by peoples. With time however, the mode has changed to encompass the international way and especially the American mode which tends to be attractive to most people. Back at the university, Lee had seen the type of revolution in the music industry in the states and sought to bring this change in the home country so as to improve the industry. As a result, the industry has grown creatively to cater for all these changes. Based on the skill obtained back then and currently, the company is advancing in the marketing structure and still forming more and more groups to attract the public interest by their skills such as the H.O.T and S.E.S. The company has also marketed and improved the market models by splitting, auditioning in several places, hard training and also translating. The ideas are innovative basically through the stage adaptations that have been provided by the translations. These provide a large audience and a wider market since the users can understand the language just like the originator. The consumers tend to buy even those of other origins leading to more sales and great market. The business model, communications and financial management The company has enlisted the help of experts and even differentiated the management in well manageable levels. This way, the management prospects are easy and employees are easy to supervise. The business model is separated to include separate holdings. This way the consumers are able to choose where to belong. The United Asia, SM Academy and SM Entertainment are separate entities from which consumers are able to choose where to belong and from which to obtain shares. The share percentage of the shares by the stakeholders has risen to thirty percent of the overall stocks while the shareholders bear the highest and the largest number of stocks. The communications and trading is mainly covered with the media and the tours they make to promote their products. For instance, the Super Juniors have embarked of several tours in and outside the country to advertise on their products and produced clips for the media. A 3D video production on one of the tours was released in 2001 which was received, applauded and purchased by millions of people. Collaborations with other companies in the same industries and competitors as well as the American industry has further been a creative idea to the firm innovation on the moves, the production techniques and the proper acting has been enhanced through such interactions and sourcing actors from outside. The company has enhanced the communication techniques though you-tube that agreed to market the proceeds and products of the firm since 2009. Not only did the popularity of the firm grow, but also more and more sales were obtained and the firm grew in size. Marketing, customer relationship management and backstage production The marketing has ranged throughout Asia with the use of commercials, advertisements, stage presentations, tours, documentaries and even through movies. Television shows and acting has also been used to market the company as well as use of movies. The Girl Generation and Super Juniors have embarked on international productions and released countless movies on the various performances such as the shows on Human TV’s and Strictly Come Dancing. The back stage production process is complex and well monitored. It employs the use of current technology that is advanced to produce including DVDs and 3D technology such as the one involved in the release of a tour clip. SM Entertainment can be viewed to be innovative in the sense of the magnitude of the actions that are involved and the technology being used. The various top actors and singers across the continent have been able to solicit business with the company and this proves that they are creative and innovative. Challenges faced by SM Entertainment Just like any other business, the firm has faced many problems since its incorporation and from its inception and early foundation. The risks and challenges that the firm has undergone relate to: Market The rise of other competitive companies in the market such as YG and JYP has been a big challenge to the firm. This has led to seeking exterior markets as a result of the low sales obtained and thus losses. The competition is stiff even though the company still has a larger share of the industry and that the production and share index is high. The major factors contributing to the losses are a result of the many industries in the market, the low sale, the disinterested parties and the few inexperienced actors. However, the company has been able to cater for these losses through proper management strategies such as additional sales through advertising, venturing to outer markets and even through customer attraction techniques. These factors are still a risk to the company since more money may be pumped into marketing skill and still bear no fruits. Still, the same strategies may be adopted by the competitors thus shortening the expected profits and rewards. The market context of the company is dynamic over time. Pricing strategies prior to the business objectives of the company poses significant challenges. A balance on whether to increase the prices rates and risk losing the clients and whether to lower prices and gain no profits is a tricky one (Mark, 2000, p.144; Mark, 2009, p.213). In this regard, competition is rather increasing. Rival companies are emerging every now and then. They identify that market interest that the company has failed to offer to clients, a scenario that has made artists move from the company and join competitors. A significant challenger in the market is the K-pop. A marketing plan is needed to ensure that the strategies involved are not interrupted and if so, then the repercussions are less (Andari, et al. 2007, p.310). It defines and unveils the need the customers, identifies the potential risks and devices a plan that can help mitigate such factors. Management After the two groups, Super Junior-K.R.Y. and Super Junior-T another group was formed called the Super Junior sub-unit project that would start activities in 2008. The announcement brought a lot of problems and controversies to the fans of the two earlier groups thus causing dissatisfaction and complains. Fan led boycotts which created legal representations leading to splits of the company and the stakeholders gaining a third if the company stocks. It was finally agreed that the group should retain only thirteen members and no more were to be added. There was a stop in business activities when Kangin had to stay on SBS’s instead of leaving for the MBC’s. This led to a big controversy between the two companies and lawsuits were filed. This influenced the companies’ profitability. MBC banned the activities of the Super Junior and refused their appearances in the performances and Kangin subsequently lost his job. The activities in the companies came to an almost standstill and less was done. The conflict with MBC led to a lot of media coverage and most of the popularity of the firm was lost. The controversy was basically between MBC and S.M Entertainment. As a result, the Super Junior was banned by MBC and could not therefore make an appearance in any MBC performances that followed this conflict. It was however argued that the controversy was not management based, rather it was characterized by decisions that the producers themselves had made. The underlying controversy variable was slave contract. The Super Junior actually left the company due to this contract. Once artists had been signed up, all their works were monitored, controlled and regulated by the contracting firm. Their decisions were further prone to the contracting firm’s approval. This was more dictatorial over the works of artists even though the entertainment firm had a role to play in promoting their creativity. Super Junior could no longer deal with such contracts and therefore left. Other lawsuits include the Han Geng law suit to terminate his contract period which had controversies for the firm. SM Entertainment had to recruit and source external management so as to manage the firm. This activity requires fund and good abilities to obtain the best. The management of any organization influences the decision making process and strengthens the actions of the subordinates (Bettencourt, et al. 2002, p.52). The main management issue with the company is the provision of rather strict contracts to an extent that artists and other clients avoid the services provided by the company. On the same note, the management practice of slave contracts has posed serious business challenges for the company in terms of their relevance, applicability and validity in the contemporary industry. In a nutshell Innovation is the basis for which organization compete. The ability to come up with new structures, products, abilities and demands determines the selling powers of the firms. Organizations with low inventions obtain few customers since they lack the ability to attract them. Besides this, innovation is the growing need in the modern business sector without which, the firms cannot engage in the competitive nature of the markets. References Acs, Z, J, and Audretsch, D, B, (2001), Innovation and size at the firm level, Southern Economic Journal. Acs, Z, J, and Audretsch, D, B, (2008), Innovation in large and small firms: an empirical analysis, American Economic Review. Andari, R., et al. (2007), Staying Ahead: The economic performance of the UK's Creative Industries, The Work Foundation, London. Barbara, J, (2009), Entrepreneurial Behaviour, Glenview, IL: Scott, Foresman and Co. Beise, M, (2004), Lead markets: Country-specific drivers of the global diffusion of innovations. New York: Cengage Learning. Bettencourt, A, et al. (2002), Client coproduction in knowledge-intensive business services, California Management Review. Marc, J, (2009), Entrepreneurship: Strategies and Resources, New York: Routledge Press. Mark, C, (2000), Entrepreneurship, Brookfield, VT: Edward Elgar Publishing. Miles, I, and Green, L, (2008), Hidden innovation in the creative industries, NESTA Research report July 2008, NESTA, London. Peter, F, (2006), Innovation and Entrepreneurship, New York: Harper & Row. Sergio, A, (2007), Entrepreneurship and Job Creation. OECD Observer. Read More