SM Announces “NEXT 3.0”: Evaluation of Three Years Under Multi-Production System

SM Entertainment has evaluated the three-year outcomes of its SM 3.0 strategy introduced in February 2023 and declared a new phase titled “NEXT 3.0.” On January 20, CEO Chang Chul-hyuk and CEO Tak Young-jun appeared together on the company’s official YouTube channel to outline a blueprint for an upgraded production system.

The core of SM 3.0 was the establishment of five multi-production units. CEO Tak explained, “We moved away from a structure reliant on a single person’s judgment to a system where five separate organizations handle strategies and production for each artist.” This change significantly reduced production delays, enabling new groups such as RIIZE, NCT WISH, and Hearts2Hearts—launched under SM 3.0—to establish themselves rapidly.

In addition to improving the production system, SM placed special emphasis on maintaining its musical quality standard, SMP. CEO Tak stated, “Even amid changes in our production framework, we focused not only on accelerating production speed but also on preserving SM’s unique musical quality represented by SMP. This allowed us to deliver high-quality results on time, such as BTS’s Comeback.”

Growth is also evident in financial metrics. SM recorded sales of 990 billion won in 2024 and is on track to officially enter the “1 trillion won in sales” era by 2025. Sales are projected to reach 1.148 trillion won in 2025 and exceed 1.27 trillion won in 2026. Operating profits are expected to rise from 87 billion won in 2024 to 167 billion won in 2025 and further to 190 billion won in 2026.

The focus of NEXT 3.0 is to strengthen “functional integration” among the existing five multi-production units while maintaining this structure. CEO Chang noted, “In the early stages of SM 3.0, the five production teams operated almost as completely independent organizations. However, after three years, it became clear that each team had distinct strengths and weaknesses.” SM aims to uphold musical integrity while flexibly combining technology and platforms to deliver new value to its global fanbase. Samsung Securities analyst Choi Min-ha predicted that profit growth will continue in 2026 due to expanded concert scales for groups such as NCT DREAM, aespa, RIIZE, and NCT WISH, along with rising sales from merchandise and licensing activities.