[비즈한국] As the new song ‘SWEAT’ by the girl group ‘KISS OF LIFE’ gains popularity, their agency, S2 Entertainment, is also drawing attention. Since their debut in 2023, KISS OF LIFE has grown steadily, becoming the primary driver of S2 Entertainment’s revenue. Currently, they are the only active artist under the S2 Entertainment label. Analysts suggest that the agency needs to discover new talent to ensure sustainable growth.
Establishment of S2 Entertainment After Breaking Away from Cube Following Changes in Majority Ownership
Hong Seung-sung, Chairman of S2 Entertainment, is a figure indispensable to the history of K-pop. In 2001, Chairman Hong co-founded JYP Entertainment (JYP) alongside Park Jin-young, the current Chief Creative Officer (CCO). In its early days, JYP operated under a structure where CCO Park and HYBE Chairman Bang Si-hyuk handled the music, while Chairman Hong managed the business.
Chairman Hong left JYP in 2008 to found Cube Entertainment. Cube Entertainment enjoyed success by nurturing artists such as 4Minute, BEAST, and BTOB. In the early 2010s, it was considered the fourth-largest music agency, trailing only SM, JYP, and YG Entertainment. Since then, while HYBE has made great strides, Cube has struggled to produce more hit artists, and its current standing is not what it once was.
Although Chairman Hong was the founder of Cube Entertainment, he was the second-largest shareholder rather than the majority owner. Universal Music became the largest shareholder in 2010, and in 2013, another investor, IHQ, took that position. IHQ sold all of its stake in Cube Entertainment to VT GMP in 2020.
The relationship between VT GMP and Chairman Hong was not harmonious. Following the change in majority ownership, former Cube Entertainment CEO Shin Dae-nam resigned, and Ahn Woo-hyung, former CEO of Seo Taiji Company, and Lee Dong-kwan, former Vice President of VT GMP, were appointed as co-CEOs. On March 26, 2020, the day the representatives were replaced, Chairman Hong criticized the move on social media, stating, “The largest shareholder of Cube Entertainment recently changed. At a time when we need to cooperate and coordinate for the sake of the artists, they are inciting internal strife by doing things that even a gang would not do.”
Five days later, on March 31, 2020, he stated, “It didn’t take long to realize that those whom I believed to be great partners who could complement one another had no intention of being with me,” adding, “I intend to leave Cube Entertainment, to which I dedicated my life, without regrets.”
Ultimately, in August 2020, Chairman Hong announced, “After much thought and consideration, I have established S2 Entertainment,” and added, “I will strive tirelessly for the globalization of K-pop, a goal that has remained unchanged since I first started this work.” This marked the beginning of S2 Entertainment.
Son as CEO Sparks Interest in Management Succession… Must Overcome Total Capital Impairment
S2 Entertainment’s first artist was the girl group ‘HOT ISSUE,’ which debuted in 2021. HOT ISSUE failed to gain significant attention and was quietly disbanded in 2022. Within the entertainment industry, whispers emerged saying, “Chairman Hong Seung-sung’s abilities have reached their limit.”
However, as ‘KISS OF LIFE’ subsequently gained popularity, the evaluation of Chairman Hong began to rise again. Since their 2023 debut, KISS OF LIFE has been making a name for themselves, winning numerous awards, including the Rookie of the Year at the Korea Culture and Entertainment Awards, Rookie of the Year at the Korean Music Awards, Next Generation at the Golden Disc Awards, and Best Musician at the Asia Artist Awards. KISS OF LIFE’s new song ‘SWEAT,’ released on August 4 of this year, also topped music charts. Bolstered by the success of KISS OF LIFE, S2 Entertainment secured its own building in Gangnam-gu, Seoul, last year and is currently accepting applications for a global audition.
There is another reason why eyes are on S2 Entertainment: Chairman Hong’s eldest son, Hong Tae-hwa, is both the largest shareholder and the CEO of the company. While the K-pop industry has built a significant history, it is still rare to find entertainment companies where the second generation has succeeded to the management. This is why there is interest in whether CEO Hong Tae-hwa will become a successful model for management succession in the entertainment industry.
Despite the rapid rise of KISS OF LIFE, S2 Entertainment’s financial state is poor. According to audit reports, total capital as of the end of last year was -10 billion won, indicating a state of total capital impairment.
Performance is also lackluster. Revenue grew only by 3.61%, from 10.4 billion won in 2024 to 10.8 billion won in 2025. Conversely, operating losses expanded from 1.1 billion won in 2024 to 4.1 billion won in 2025. As KISS OF LIFE is currently the only active artist, it is difficult for revenue to expand significantly under the current circumstances.
S2 Entertainment attracted approximately 5 billion won in investment last year but remains in a state of capital impairment. The company is in a situation where it needs to demonstrate further potential, but there is no news yet of a next artist debuting following KISS OF LIFE.
Three years have already passed since the debut of KISS OF LIFE. While the contract terms have not been disclosed, if they signed a 7-year contract according to the Fair Trade Commission’s standard contract guidelines, the contract between S2 Entertainment and KISS OF LIFE will expire before 2030. If a renewal is not achieved, the agency will need to either debut a new artist or acquire already established artists to replace the revenue.
An entertainment industry insider analyzed, “Because trends in pop music change frequently, there is no guarantee that one success will lead to the next. There are countless cases of failure even among artists nurtured by large entertainment companies,” adding, “It is difficult to evaluate an agency’s ability or future prospects based solely on the success of one artist.”