SM Pictures

SM Pictures was a South Korean home-video and film-distribution company that operated under SM Entertainment during the late 2000s. Its corporate history began on February 5, 1999, when it was established as Bitwin under Arcom Studio. Bitwin developed an early position in Korea's DVD market by producing DVD editions of Korean films, including Whispering Corridors, Shiri, and The Spy. The company attracted investment from Samsung Venture, Dongyang Investment Bank, and Kibo Capital, and became a KOSDAQ-listed company in 2003. SM Entertainment acquired control of Bitwin as part of an effort to extend its business beyond music into film, video, and broader content distribution. At a shareholders' meeting on March 16, 2007, Bitwin announced that it would adopt the SM Pictures name and pursue a more international video strategy. Han Se-min, an SM Entertainment executive involved in investor relations and global business, became the company's sole chief executive officer. The renamed company intended to retain its DVD-production and distribution operations while expanding into film and drama production, co-production, investment, licensing, and international distribution. The proposed business model covered both physical and digital channels. SM Pictures planned to produce or co-produce films and television dramas, acquire and distribute foreign titles, and build relationships with distributors in the Americas, Japan, China, and wider Pan-Asian markets. In 2007 it secured online and new-media rights arrangements involving titles such as the theatrical drama Vacation and The Painted Veil, and it announced a Korean licensing arrangement with 20th Century Fox covering a scheduled package of 17 titles. The company also explored diversification outside filmed entertainment. In November 2007 it announced a proposed 16.9 billion won paid-in capital increase intended to fund the acquisition of childhood-education company Kinder Schule. The proposal was withdrawn in December after the parties failed to resolve their differences, and the episode led to a preliminary notice concerning possible designation as an unfaithful disclosure corporation on the KOSDAQ market. SM Pictures' principal film production, Attack on the Pin-Up Boys, was released in 2007. Although the project was produced at a reported net cost of approximately 850 million won before printing and marketing expenses, its reported audience of about 102,600 fell well below the estimated level needed to avoid a loss. The weak theatrical result contributed to the company's retreat from the film business and eventual closure. On June 13, 2008, SM Entertainment transferred its 33.94 percent stake in SM Pictures to Premier Entertainment for 15.24 billion won, while Lee Soo-man separately sold his 5.6 percent holding to Premier for US$2.5 million. Premier thereby obtained control of more than 40 percent of the company, which subsequently adopted the name PRE. The company is therefore a defunct former SM Entertainment content subsidiary rather than an active contemporary SM brand.

SM Pictures originated as Bitwin, a company established by Arcom Studio on February 5, 1999. Its early business focused on producing DVDs for Korean films, an activity in which it was an early participant in the Korean market. Releases associated with its early catalogue included Whispering Corridors, Shiri, and The Spy. Bitwin received investment from Samsung Venture, Dongyang Investment Bank, and Kibo Capital, and entered the KOSDAQ market in 2003. SM Entertainment later acquired the company and sought to use it as a platform for a broader video and film business. At a March 16, 2007 shareholders' meeting, Bitwin announced its renaming as SM Pictures. The new identity was intended to connect the company with SM Entertainment while positioning it for expansion beyond physical DVD products. Han Se-min, then associated with SM Entertainment's investor-relations and global-business activities, was appointed sole CEO. The strategy announced after the acquisition included film and television production, investment, co-production, physical distribution, digital licensing, and imports and exports of international titles. SM Pictures aimed to work with overseas partners and distribution channels in North America, Japan, China, and other parts of Asia. In May 2007, KTH announced a copyright agreement covering online and new-media delivery of content owned or controlled by SM Pictures, including Vacation and The Painted Veil. The company also entered a Korean licensing arrangement with 20th Century Fox and planned a release slate of 17 titles. SM Pictures attempted to diversify further in late 2007 by proposing a 16.9 billion won paid-in capital increase to finance the acquisition of childhood-education company Kinder Schule. The proposal was abandoned in December after the parties failed to reach agreement. The withdrawal produced a regulatory disclosure issue, with the KOSDAQ market authorities issuing a preliminary notice related to possible classification as an unfaithful disclosure corporation. Kinder Schule was eventually acquired by SH Tech instead. The company's move into theatrical film production produced disappointing results. Attack on the Pin-Up Boys, released in 2007, was reported to have attracted approximately 102,600 viewers. Against a reported net production cost of about 850 million won before printing and marketing, the audience was insufficient to reach the approximate break-even level cited for the project. The result contributed to the company's decision to close down after failing to achieve satisfactory film-business performance. SM Entertainment subsequently reorganized its involvement. On June 13, 2008, it transferred 5.15 million SM Pictures shares, representing a 33.94 percent stake, to Premier Entertainment for 15.24 billion won. Lee Soo-man separately sold his 5.6 percent stake to Premier for US$2.5 million. Premier's combined position exceeded 40 percent, giving it control of the company. SM Pictures was later renamed PRE; the company was subsequently associated with the names PRE-GM and Candle Media in the historical account. SM Pictures is now defunct.

• 2008

  SM Entertainment exits and Premier Entertainment gains control

  [1]SM Picturesen.wikipedia.org

  SM Entertainment and Lee Soo-man transferred their holdings to Premier Entertainment, which gained control and later renamed the company PRE.

• 2007

  Bitwin is renamed SM Pictures

  [1]SM Picturesen.wikipedia.org

  Following SM Entertainment's acquisition, Bitwin adopted the SM Pictures name and announced plans to expand into international film and video operations.

• 2007

  Attack on the Pin-Up Boys is released

  [1]SM Picturesen.wikipedia.org

  The company released its first film production, which delivered a weak theatrical result relative to the reported cost and contributed to the retreat from film production.

• 2003

  Bitwin becomes a KOSDAQ-listed company

  [1]SM Picturesen.wikipedia.org

  After receiving investment from several Korean financial and venture institutions, Bitwin was listed on KOSDAQ.

• 1999

  Bitwin is established

  [1]SM Picturesen.wikipedia.org

  Arcom Studio established Bitwin on February 5 to produce and distribute DVD editions of Korean films.

A Korean film and home-video company that attempted to evolve from DVD production and distribution into an internationally oriented film, television, licensing, and digital-content business under SM Entertainment.

• Home video · 1999

  Korean film DVD releases

  Bitwin's original business centered on producing DVD editions of Korean films. Its early catalogue included Whispering Corridors, Shiri, and The Spy, helping establish the company in Korea's emerging DVD market before its later expansion into licensing and film production.

• Film production · 2007

  Attack on the Pin-Up Boys

  A 2007 theatrical film identified as SM Pictures' first film production. The film attracted approximately 102,600 viewers, a result reported as insufficient against the production's break-even requirements.

• Film licensing and distribution · 2007

  Licensed and imported video titles

  Under the SM Pictures name, the company pursued rights acquisition and distribution for Korean and foreign films through physical, online, and other new-media channels. Its announced licensing activity included a Korean agreement with 20th Century Fox.

• 2008

  Transfer control to Premier EntertainmentM&A

  Background

  SM Entertainment reorganized its business after SM Pictures' film activities produced inadequate results.

  Action taken

  SM Entertainment transferred 5.15 million shares, representing 33.94 percent, to Premier Entertainment for 15.24 billion won. Lee Soo-man also sold a 5.6 percent holding for US$2.5 million.

  Aftermath

  Premier controlled more than 40 percent of the company, which was later renamed PRE. SM Pictures subsequently ceased operating as an SM Entertainment company.

  Consideration for stake transfers. 15.24 billion won for SM Entertainment's 33.94 percent stake; US$2.5 million for Lee Soo-man's 5.6 percent stake (June 13, 2008)

  Source

• 2007

  Expand from DVD distribution into global film and videoStrategy

  Background

  After SM Entertainment acquired Bitwin, the company sought to build a broader content business rather than remain focused on Korean DVD production.

  Action taken

  Bitwin was renamed SM Pictures, appointed Han Se-min as CEO, and announced plans spanning film and drama production, co-production, licensing, imports, exports, and digital distribution.

  Aftermath

  The strategy generated licensing and new-media agreements, but the theatrical film operation performed poorly and the company was later closed and sold.

  Source

• 2007

  Withdraw proposed Kinder Schule acquisition financingOther

  Background

  SM Pictures proposed a 16.9 billion won paid-in capital increase to finance the acquisition of childhood-education company Kinder Schule.

  Action taken

  The company cancelled and withdrew the third-party allocation plan after negotiations failed to resolve disagreements.

  Aftermath

  The failed transaction led to a preliminary KOSDAQ notice concerning possible unfaithful disclosure, while Kinder Schule was eventually acquired by SH Tech.

  Proposed paid-in capital increase. 16.9 billion won → Withdrawn (November–December 2007)

  Source

1. 1SM Picturesen.wikipedia.org