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tldr it is possible that we occasionally lose out on some big talent, but generally the biggest artists are the good ones.
I think he does have a point. Yes, it sucks that groups like CLC didn't get anywhere, but you also can't say that group that did hit big were worse than them. In the end most of the so called breakout groups can't even maintain their success, people move on cause they don't find them interesting. You need a perfect combo of music, visuals and personality to hit big.