[Trans] The Fetters brought by Success to Under-modernised Enterprises

The Fetters brought by Success to Under-modernised Enterprises

The contract they couldn’t refuse as rookies

becomes thorn of contention upon earning fame


In the current entertainment system, where earnings

are not easy to come by, a ‘partnership’ model based on

understanding + distribution guidelines a necessity

The continuing conflicts between idols and their management

Lately, conflicts between famous idol groups like Dong Bang Shin Ki, Super Junior and Kara and their management companies over their exclusive contracts are increasing. The emerging consensus amongst music representatives and industry experts is that rather than blame one side or the other all efforts must be put into improving the industry’s outdated and underdeveloped business structure.

› Why reign in exclusive contracts? It is hardly breaking news that the exclusive contract favoured by the entertainment industry is causing problems. The typical contract is a 10-year long-term contract. Additionally, several of its terms that infringe upon the entertainers’ private life and human rights are also sources for problems. Another problem is the exorbitant penalty/exit fee that entertainers would have to pay to the management company to terminate their contracts, which essentially amounts to a tool for coercion that companies use to bind the entertainer to the company.

However, even given these disadvantageous terms, the majority of rookies sign such contracts without a word of complaint. Because of the fierce competition brought on by an over-supply of rookie artists, they are unable to refuse the terms of the contract. Then, in most cases, when these artists become famous their thoughts change. They start asking for terms and conditions that match their level of fame. Cases where other management companies offer better terms and lure away celebrities are also quite common.

› Why the excessive pre-debut investment? Management companies who handle the careers of singers especially exclaim that long-term contracts, high penalty fees for breach of contract, etc. are necessary to recover the costs invested during the pre-debut days. According to one industry insider, “When a rookie singer releases an album, the promotion costs related to media exposure alone cost at least 100,000 USD and at most 300,000-400,000 USD.” In the case of giant-size management companies, the pre-debut investment costs are even higher. For those who plan to have their charges enter foreign markets, they must also provide, in addition to dance and singing lessons, foreign language lessons, which only increases the time and money needed.

The problem is, even with all the costs invested, the earnings/return are actually hard to come by. Income from appearing on television shows is quite low, and the more one appears on these shows the more the costs for stylists and back dancers increase. Album and digital download sales also don’t bring in much profit. The commercials and endorsement deals that most experienced singers rely on for profit are not so profitable for rookies. One representative of a management company put it this way, “even if a rookie wins no.1 on a music programme, the money gained from this doesn’t amount to much, so for producers, even after 3 or 5 years, it’s hard to make ends meet,” and “aside from the giant entertainment companies, the majority of producers are struggling.”

› The radical solution? In spite of these risks and obstacles, a large number of producers continue to jump into the music business. It’s because of the lure of ‘daebak (explosive success)’ that comes with high-risk high-returns venture enterprises. And given the surplus of singer hopefuls, it’s not easy to improve outdated exclusive contracts or business practices. The emerging consensus amongst experts is that companies must improve their earnings distribution systems and not regard their signed singers as simply money-making machines but rather start gradually moving toward a radically updated model where singers are regarded as ‘partners’.

There are also voices expressing the need to change the current music chart system that is overly reliant on TV broadcasts and to deflate the promotion fees bubble. TV stations mustn’t simply try to comply with the promotion plans of management companies but seek out and give exposure to good quality music; similarly the public must start adopting the habit of looking for good music instead of passively accepting what’s being shown on TV shows. Digital download sites and telecommunication firms must also improve in their earnings distribution policies, and it’s a given that they must settle on a market mechanism that allows them to earn profits solely from distributing music and not from advertisements or special events. Related government agencies and the Fair Trade Commission must also be involved via regulatory and oversight mechanisms to ensure that unfairness/prejudicial activity in either the digital download market or in the content of exclusive contracts is an exception rather than the rule.

서정민 기자 westmin@hani.co.kr, <한겨레> 자료사진


Source: Hani.co.kr

Translation by: Jimmie of TheJYJFiles

Shared by: TheJYJFiles

Please do not add/remove credits


11 thoughts on “[Trans] The Fetters brought by Success to Under-modernised Enterprises

  1. The emerging consensus amongst experts is that companies must improve their earnings distribution systems and not regard their signed singers as simply money-making machines but rather start gradually moving toward a radically updated model where singers are regarded as ‘partners’.

    this is so true… singers are also humans…. thanks to JYJ’s actions that people are really looking for solutions and better judgement on this issue…

  2. The end will justify the means… though they have sacrificed a lot, and thought a lot of people and companies are raising their eyebrows cuz of this, JYJ will triumph in the end and all of them bashers will kiss our boys’ (men’s) feet! X’D

    love you Jimmie & admins!

    • Thank you for sharing these links. How interesting. So much deja-vu. 😦 Reading about how Lee Sooman started the industry, I now understand better why he has been regarded so highly and, yes, what an achievement it must be to grow the enormously successful K-pop industry from a more or less blank slate. But all things change, and this business model is so inefficient it’s a wonder it’s lasted so long without *more* lawsuits, investigations, and scandals. What’s so disturbing to me is reading these articles and seeing how little changed in the meantime. I hope now is the time things can start changing for the better of the artists.

    • Thanks for these links! I knew previous SME groups were also involved in conflicts but not that it was also massive, prompting TIME magazine to write a report on it. Sadly, ten years later, it seems no one has yet to be punished, least of all SME.

      • Precisely, it happened 10 years ago and in the last 10 years there have been other cases and yet nothing much has improved. I hope JYJ will be strong and hang in there. The battle will be long and hard. I do think that in the last 10 years, the internet has proved to be an alternative source for information and that has helped us gain a better understanding of the situation. It may sometimes be an unreliable source but it may prove to be useful.
        I see Tony and Hee Jun on shows nowadays and I feel upset that the best years of their lives were spent dealing with the H.O.T crap. Not to mention that Kangta irritates me, it’s a personal thing though haha.
        These companies claim they invested a lot of money and expect to reap it. True, no company is in this for charity but costs and losses are part and parcel of business. A record company will HAVE to produce new artists, as they have the minimum running costs no matter what. There is a minimum number of people they employ to run a company, the rent for office space, etc. Producing rookies actually make them a higher profit margin, they cost a lot less than big name stars. At least I know this applies to the HK/Taiwan music industry. Anyway, there’s also a lot of sponsorship involved, with product tie ins and so on.
        Of course, if they are really so involved in corruption then there will be a lot of hidden costs. It’s a vicious circle then, you do the immoral thing, you continue to do so to save your ass.

    • @NingK

      Thanks for the links to both articles. I have seen comments about some of those artists mentioned, and what they had been through. But reading a ‘real’ investigative article only points out how sorry that MBC piece of trash really is. Looking in from the outside one has to wonder how do these people lay their heads down on a pillow at night and get a good night’s sleep. OK, that is a rhetorical statement, but it’s very obvious nothing much as changed over these past 5-6 years.

      I get the impression the Korean government is going to have to be dragged kicking and screaming to put laws into place to make the necessary changes. This model is not going to be able to sustain itself. The abject uselessness of seeing this still going on with no change in sight is only going to give the rest of the world a bad impression. Sure no one country’s industry is hugely better than the other, but as one article stated Mariah Carey was paid big bucks ‘not to record.’ I remember when that happened. So how come these artists with similar talents are making peanuts? If it’s such a struggle financially to produce how come their ‘year end’ statements show ‘huge’ profits? Whose pockets are those profits going into?

      What I find really interesting are the comments about how much it costs to bring these talents along…several hundreds of thousands of dollars. They can throw figures around like some folks ‘dream up lottery numbers’, but I have yet to see the accounting work with receipts to back all this up. I bet the government hasn’t either. SME sure hasn’t brought any of that paperwork into court. The transparency factor is more like ‘smoke and mirrors’.

      If it costs so much to bring along new talent. Then stop bringing in so many, concentrate on a few really good ones, and share the wealth. Oh. Not exactly what you had in mind? Didn’t think so.

      I’m a firm believer that things happen for a reason. There is a reason why JYJ’s issue came at the time it did, and although they are paying a heavy price right now for having the courage to stand up for themselves; I believe the Universe is going to reward them for their efforts. It’s apparent that the time has come for the changes that are necesssary. It’s no accident that their fans are sticking to them like glue. It’s no accident that they are earning respect from new fans from all kinds of places. It’s no accident that through all this trumoil, they are managing better than their ‘oppressors’ thought they would.

      “Truth will out”.

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