Three Questions Regarding SM’s Position
Translation by: Jimmie of TheJYJFiles
[The Dong Bang Shin Ki Special, 2nd post: This is the post compiled after the first hearing on the injunction on August 25, 2009. What the three members of Dong Bang Shin Ki bring up is ‘a problem with the system’. But is that being properly addressed? Although my work may be insufficient, I would like to add it to the ongoing debate.]
Last year, on August 21, the first hearing on the suspension of the Dong Bang Shin Ki members’ exclusive contract was held. Although the hearing was held in private in a closed session several details were leaked to the press. I expected to hear that both sides displayed steel-like resolve in their positions or maybe that they were starting to find grounds for compromise, but, instead, what was reported of the hearing left my heart cold. It’s because of several allegations made by SM. These are the questions brought about by these allegations.
Why was Dong Bang Shin Ki required on Japanese national television and the DVD with the same broadcast to advertise SM’s restaurant?
On that day [of the first hearing] SM’s lawyer made the allegation, “SM requested the three members to pull out of investing in the cosmetics business because it would bring irreversible harm to Dong Bang Shin Ki’s image.”
I’m not going to bother with whether it was right or wrong for the members, or the members’ parents, to invest in the cosmetics business. Is it even necessary? This issue falls in the territory of the Dong Bang Shin Ki members’ personal investment activities. Unless they mention it in their albums or DVD, it’s none of my business. After all, never once did they use their activities as singers to promote their private investments. But there is one thing I know…
In March of last year, Dong Bang Shin Ki made an appearance on famous Japanese talk show, ‘Shabekuri 007.’ They were given exposure on national Japanese television in the same show as Japan’s best and most popular comedians for about an hour. Here, Dong Bang Shin Ki introduced and promoted their restaurant ‘Grape Tree’. However, it turns out this restaurant is owned by SM’s own catering chain SM F&B Development and was created by them. This shook the confidence of Korean and Japanese fans who only found this out after the fact. Isn’t this damaging to the image of Asia’s best group?
Not long ago, Dong Bang Shin Ki’s DVD, ‘All About Dong Bang Shin Ki 3’ was released for sale. It was a full-length DVD sold at the price of 48,000 won (roughly $46). It’s a DVD that contains [Dong Bang Shin Ki’s] vacation trip, showcase, interview, music video and related clips. And yet, in several clips of about 30-40 minutes in length, Dong Bang Shin Ki’s members are promoting and introducing SM’s restaurant businesses in Korea, such as e-table as well as the Japanese restaurant Grape Tree. And the method of introduction was quite a sight [sarcasm].
The introduction they do is not on the level of merely having the restaurant in the background. It’s not even on the level of mentioning it in passing. From a previously scripted ‘Marketing of the Restaurant’, the Dong Bang Shin Ki members are made to read intently. They play a quiz that requires them to read the items on the menu one by one and match the associated descriptions. The waiter appears, the members cut short their comments and, covering the members’ figures, the waiter explains each item on the menu in more detail. Later, he even says the prices of the set menus. Is this kind of content fitting to the image of Asia’s best vocal group? Is such [shameless promoting] suitable for this group’s full-length DVD?
For an hour and ten minutes, Dong Bang Shin Ki—the singers with the highest market value in all of Asia, singers whose appearance at a single event brings in several 10 millions USD in guarantee—were used despite ‘the irreversible harm to their pride as singers’ to promote the launching of a restaurant owned by SM’s board of directors, which reduced them to the level of salesmen. Then, SM wraps this content in a DVD to sell to Dong Bang Shin Ki’s Korean and Japanese fans as well as to fans in the greater Asia region.
In such situations, is SM actually managing Dong Bang Shin Ki? Or is it using Dong Bang Shin Ki as SM’s salesmen? And yet it dares to speak of ‘fear of [Dong Bang Shin Ki’s] image led us to request [the three members] to refrain [from the cosmetics investment]’; can such words come out of its mouth?
Is it a lie that all scheduling ‘was reached through cooperation’?
At the hearing that day SM’s lawyer claimed, “The three members were never forced to participate in advertisement or shows or other appearances that they didn’t want to do, so I don’t think they have grounds to be dissatisfied in this regards.”
In truth, it is this claim here that turned my heart cold. ‘No reason now’ did you say? No reason now, in bringing up this lawsuit, because Dong Bang Shin Ki weren’t forced to participate in advertisements or shows and appearances that they didn’t desire to do? Didn’t SM itself say, “In the area of health and scheduling there was sufficient cooperation/negotiation”? So then why at this point do they even have to point out that they found a solution to Dong Bang Shin Ki’s “dissatisfaction” with regards to “appearances that they didn’t want to do”? Does this mean that there were in fact ‘causes for dissatisfaction’ until now?
Upon hearing this claim, I suddenly recalled the time last February when they appeared on ‘Line Up’, a Korean variety programme. The reason why this broadcast remains in my memory is because I felt very uncomfortable whilst watching the broadcast. The producers coordinate with the managers to record a hidden camera scenario in Dong Bang Shin Ki’s waiting room. The scenario is the following: creating a situation where one of the members had to make a ‘Line Up regular/fixed appearance.’
Line Up is a game programme with an ambiguous design in a short-lived format and poor viewer ratings. Dong Bang Shin Ki’s appearance on this show in the midst of an excessively tiring schedule for their Japanese activities was most likely the decision of their management company as a ‘courtesy appearance.’ So, Dong Bang Shin Ki not only helps as [SM’s] salesmen but also helps SM’s managers maintain good relations with broadcasting stations by running odd-end errands like this.
Therefore, a fixed appearance on this programme, in the end, is not a good thing. But this hidden camera scenario starts with the premise, ‘ this programme is not a popular programme, and no one is expected to receive gladly an appearance here,’ and knowing full well that ‘no one eats pastry that he hates’ they presented this concept to the members, telling them ‘to pick a member who will do the fixed appearance.’ However, that process goes like this. The managers notify the members, and although their faces aren’t enthusiastic no one complains or turns it down. Among the struck-dumb members, Xiah Junsu catches the eyes [of the managers], and he asks, “You don’t want to, Junsu?” Junsu replies, “Of course I want to!” with a straight face.
I’m not trying to harp on the manager’s or the broadcast’s personal position. The problem is the practice/custom revealed by this scene. None of the members, in spite of their erratic schedules, can say with ease “No, I’d rather not” in such situations. I am extremely wary of and question the mind/mentality of the management company that takes pride in such decision-making procedures.
Even in 2008 Dong Bang Shin Ki was Asia’s best group. Even in the spring of 2008, these men had completed 17 sold-out tours in Japan’s Arena (10-20,000 capacity space) worthy of top-quality teams. Singing Love in the Ice, they moved the audience and received recognition as a team of musicians and as the representative group feeding their management and ensuring its survival. And yet, employees of broadcasting stations and the management company would have fun on certain ‘pilot programme’ appearances showing who truly held ‘decision power’. ‘In truth, these kids do whatever we tell them to do, whatever that might be,’ they would say.
And now [SM] are saying that ‘we’ve always cooperated [with DBSK members] on deciding the schedule.’ This is something coming out of the mouth of a company that has taken a leaf out of military training manuals in the manner they have pushed a young team that can’t say ‘no’ through 45 album releases, 103 concerts, heaps of broadcasts, heaps of promotions, heaps of events for the past 6 years without conceding them a single ‘rest period’, ‘re-energising period’ or ‘preparation period.’
The members would say, smiling, that they dreamed of ‘a month-long vacation’ or of ‘going on vacation just once,’ but each time their wishes were shot down. Even if their voices suffered, or they broke a leg, or had severe stomach irritations to the point of needing gastric pumping they still stood on stage and had to sing. Nonetheless, because this is a team with exceptional vocal abilities and ensemble qualities, I attended the shows and watched, but as time passed, witnessing this team became more and more like watching a ‘horror movie’ (I will elaborate on this idea in more detail in my follow-up piece, ‘Dong Bang Shin Ki’s 6-year life—an episode out of a cruel and twisted horror series’, which I will post up for your lecture).
In all honesty, I don’t think these people (DBSK) have yet recovered from the psychological scars brought on them. All of them would have experienced mental trauma at some level. Even after becoming the victim of an attack that made it necessary for him to have his stomach pumped, U-know Yunho was not given a holiday. Xiah Junsu, who almost wasn’t allowed to debut due to a 3-year long voice-change problem in puberty, who almost lost his voice completely again due to exhaustion and stress, would undoubtedly have been scarred by trauma. One time on a broadcast, Micky Yoochun confessed, ‘at times I just want to collapse.’ A video clip of Choikang Changmin stumbling/swaying is circulating online. After completing their tour, Youngwoong Jaejoong told the concert director in Japan, ‘having to sing like this will kill me.’ I believe these aren’t just casual remarks/expressions but in reality the truth. Because I saw that concert myself. I’ve seen them 8 times, and each time I felt at the same time overjoyed and disturbed. This is something I’ve been feeling for a long time.
And now, the company who was the one in control of all these situations is now coming forth to say ‘we never made Dong Bang Shin Ki undergo a schedule they didn’t want and so there are no grounds for dissatisfaction on their part.’ Not a single word of apology. Not a single indication of self-reflection.
They have never once communicated the position, ‘If by any chance we have conducted an excessive schedule, we think of this with remorse and apologise. Henceforth, we will monitor the hard work and strain of the members and improve in this area.’ This is the behaviour of the managers and board directors to whom for 6 years [the members] would refer to as ‘hyung’ or ‘father’ at every awards ceremony.
Is it normal behaviour to not fairly distribute the earnings from a singer’s album?
At the hearing that day SM’s lawyer said, “On July 15, Xiah Junsu took 45,000 USD from the company as advance payment only to sue the company that fed him a month later; an unacceptable/inappropriate act.”
On this matter, the three members’ lawyer responded through the press that Xiah Junsu never accepted advance payment; the amount referred to was tax returns that he picked up at the company. And even the court has accepted this fact and ordered that it not be brought up again. After that, SM has been unable to use that as a counterattack.
But what shocked me about this was something else. If Xiah Junsu had actually taken advance payment like that, can that really be considered unacceptable behaviour?
According to the Oricon website for album sales, Dong Bang Shin Ki sold in the past year 3.3 million USD worth of albums and DVDs. This places them in 8th place relative to all the singers active in the Jpop industry. That is an incredible and scary feat. Dong Bang Shin Ki’s popularity in Japan is indeed something to be feared. If one includes profits from concerts, the sum would easily surpass 7 million USD. Of course, what will be counted as net profit will be the amount that’s left over after taking out various fees and other profits shared out [among the management]. But the amount stands at 7 million USD. Do they think 7 million USD is the name of the boy next door?
On top of this, if we add the various small-stream revenues and profits, [DBSK] would have earned at least 10 million USD. To claim that a member of the team that earned this much for the company has no right to 40,000 USD in advance payment is ridiculous. It’s not like he stole the money; instead, he scribbled his signature on the log before receiving it. What’s the problem here? Under a 13-year contract and an arrangement that payment would be allotted every 6 months, is it such a horrible thought that one member asks for advance payment?
Right now there are a lot of questions concerning SM and Dong Bang Shin Ki’s income distribution. Aspects regarding investment fees and deficits and whatnot are indeed confusing and dizzying. However, the issue of income distribution between singers and the management company is actually not that difficult to understand.
It’s enough to follow the idea of ‘optimal percentage’ when it comes to payment. The sum amount of money is not important. But, obviously one must take into account the total sales as a standard when assigning payment. When using net proceeds as the standard, one must make it possible for the artist to know how much of it is from sales and how much was deducted in costs.
If the singer sold little, the singer receives little. If he sold a lot, he receives a lot. If he wrote some songs himself, the copyright rate goes to him. If he held a concert, a percentage of the concert proceeds goes to him. Of course, taking into account the fame and critical value of the singer, the terms of the contract adjusts itself with regards to the percentage allotted to the artist; this is the manner in which record labels and management agencies relate to the artist. Whether in Korea or out, it is like this. This is the way of ‘common sense.’
And so a company that itself doesn’t uphold the accepted practice and custom in its dealings with its singers has the nerve to criticize another for ‘inappropriate behaviour’?
Due to the particularities of their contract terms, [DBSK members] weren’t able to receive the royalties from the tens of thousands of albums they sold until early this year. For the various live and repackaged albums they released, the royalties practically don’t exist. The rights/copyright to all recordings are assigned to SM. Even the compositions created by the members themselves are automatically yielded to SM (I will go into depth about the content of the exclusive contract at another opportunity).
[DBSK] has rights to the net profits from online purchases and various side activities, but, in the case of the net profit from their Japanese activities, after Avex takes its share of the profits, the remaining sum is shared out between SM Japan and SM Korea. What is left after the deduction made by SM Korea is then shared out amongst the Dong Bang Shin Ki members.
Although what’s written in their contract guarantees them a fair share in the above areas, the reality is far from this ideal. When taking into consideration the interests of the artist, a reasonable percentage of the royalties and copyright, concert and event appearances should go to the artist. And then, the distribution of what remains amongst the relevant management branches should follow. This would make a well-viewed partnership. It represents sharing the fruits of success.
However, Dong Bang Shin Ki was unable to receive royalties, copyright, concert or appearance proceeds but received instead the bare minimum from the above arrangement. Dong Bang Shin Ki have the biggest role in the activities that bring in all the proceeds, but their pay-day/payment is prioritised only after those of the external staff and employees. In other words, they receive ‘the scraps.’ Naturally, there will be costs for management, external related employees, staff and maintenance taken out as ‘fees’. But what about the artistic labour of Asia’s best salesmen, Dong Bang Shin Ki…are there no ‘fees’ for that?
Let’s say all accumulated overhead expenses are taken out of Dong Bang Shin Ki’s net profit. It’s like taking off the head and the tail. If the company decides to calculate the investment fees and overhead costs higher than they really are or raise them, the singer is in danger of having his rights infringed and being swindled. Just looking at the role of SM Japan, this kind of high-handedness is evident.
More than anything, this means that Dong Bang Shin Ki were never informed of the ‘exact profit breakdown.’ That is to say [SM’s] method of profit distribution doesn’t fit a salary scheme or an incentive scheme or even a contractual scheme but a ‘receive-as-you-are-given’ scheme. It’s a contract that says ‘after taking everything out, this appears to be all that remains [for you].’
To wrap it all up…
I strongly believe that ‘the current contract under SM’ needs to be declared null and void. I want this backwards, renegade and unfair contract to be declared null. More than anything, even among today’s average Korean entertainment companies it’s difficult to find a 13-year contract, which makes this contract more than simply an unfair contract but also one that violates human rights.
Even before the injunction, I was already thinking that Dong Bang Shin Ki needed their own ‘independent label.’ Dong Bang Shin Ki’s fame was getting too big for SM and the conflicts between the two were getting bigger. If at that point both sides had entered negotiations peacefully, it would have brought so much meaning and progress to our country’s K-pop scene. But now everything has passed into the hands of the law. On the basis of the documents and evidence submitted by both sides, it is now up to the judiciary to issue a judicious and legitimate ruling.
There are many who worry about ‘Dong Bang Shin Ki’s breakup’. However, there’s no reason for society to interfere and concern itself with such a matter. Whether or not a group wants to break up is the business of that group and that group alone. Even if society or fans or their management company try to make them stay as they are, it won’t be possible. As a lot of people already know, Dong Bang Shin Ki has gone beyond Asia to receive the love of music fans from all over the world; they are a group we can be proud of. In the past 6 years they have achieved the work of 10 years. In this regard, our society owes them every possible humane treatment and rights as well as equal protection accorded everyone else.
If everything goes to its rightful place, I think it might be possible afterwards for the Dong Bang Shin Ki members to either depart from SM or establish new relations with the company as equal partners and continue together.
One thing is certain. In whatever manner, the members of Dong Bang Shin Ki will move forward, forging a new path toward the future. Naturally, walking a new path will inevitably lead to mistakes as well as plenty of trials and errors. They will need to face reality like they do an adventure. However, I think what they have chosen is ultimately their ‘future.’ This point comes as a big surprise. It makes me realise that they are much stronger and more incredible people than I ever thought they were. Although right now they stand sandwiched in between a harsh reality and an unattained ideal, if they continue to display the same level of sincerity and professionalism that they have thus far, I expect that they will make it to their new goal.
However, SM’s choice right now is unclear. They are standing at a fork in the road. But, unable to look into the ‘future’ they are attempting to lean on the past. They are trying to do things the old way, the way they’ve always done. They know no such thing as remorse. Even now there are lots of young singers at SM. Sincere and hardworking, they also are the future of Kpop, and their rights, just as the rights of Dong Bang Shin Ki, are important. This is a problem from which ‘the foreign-reach and pride of Kpop’ hangs in the balance. Under the present circumstances, the Fair Trade Commission has revealed its model contract, and so the status quo of the past cannot last long.
The problem that SM faces—I’m repeating myself, but it’s not a problem that only concerns the three members of Dong Bang Shin Ki. It’s a question of whether SM will stick to the past or whether it will learn to embrace the future. Although we continually hope that SM will pick the future, SM is not the type to easily change direction or mentality when it comes to such choices.