Exclusive long-term contracts later lead some groups to dispute the rigorous demands
Surh Jung-min, Music Correspondent
In the world of South Korean pop music, dubbed K-pop, there have been a string of disputes between popular idol groups like TVXQ, Super Junior and Kara and their management companies over their exclusive contracts.
It has ceaselessly been pointed out that there are a considerable number of problematic articles in the exclusive contracts signed in the entertainment sector. Most typical are the long-term contracts of 10 years or more. Also highlighted as problems are contract articles that violate the entertainers’ human rights, some for example that control their private lives. Also problematic is the way companies use unreasonable fines in the case of breach of contract as a tool to forcibly tie entertainers to their companies.
Despite these disadvantageous conditions, most aspiring entertainers sign these deals without much objection. This is because when there are so many aspiring entertainers, it is difficult for them to refuse. There are many instances, however, when entertainers change their mind after becoming famous. They demand to be treated in a manner worthy of their fame. There are also many instances in which other management companies try to lure entertainers over by offering better conditions.
Management companies protest that because they must invest a great deal of initial capital to make just one singer, long-term contracts and steep fines for breaking a contract are a minimum of protection. One music industry official said if a new musician releases an album, a management company must spend a significant amount of money on promotion, from 100 million Won ($89,662) to 300 or 400 million Won is the norm. In the case of major management companies, the initial investment can be even greater. Teaching dance, singing and foreign languages, taught from the time prior to their debut with foreign markets in mind, requires even more time and money.
The problem is that even if the costs are great, it is difficult to make money. Broadcast appearance fees are a pittance, and a great deal of money is required for coordinators and backup dancers to ensure frequent appearances. Profits from albums are also not huge. Even endorsements and events, a major revenue stream for signers, do not result in significant earnings for new singers.
“Even if a new singer reaches the top of the charts, he or she does not bring in much money, so for producers, three or five years will not cut it,” said one management company official. “With the exception of some big management companies, most producers are struggling.”
Despite this, many producers are still jumping into music. They look to hit the jackpot, as the music business is a model “high risk, high reward” business. With so many would-be singers, it is not easy to reform these outdated exclusive contracts and industry structures. Experts say the situation must be improved gradually by improving the profit structure and getting management companies to view their singers not simply as means to make money but as partners.
There have been loud calls to burst the bubble of promotional costs by changing the broadcast-centered singer promotion system. Broadcast companies should try to discover good music rather than dancing to management company promotion, and the public, too, should become an active consumer that looks for good music rather than just the music played on the radio.
Another basic change, too, would be to improve the digital music profit distribution system, in which music site and mobile telecommunication companies take an excessive share, to produce a market structure where performers could make money from their music alone, not advertisements and events. The Fair Trade Commission and other government bodies urgently need to keep continuous watch and make efforts to improve the situation so that unfair acts do not take place in the digital music market or in exclusive contracts with management companies.
Please direct questions or comments to [englishhani@hani.co.kr]
Credit: The Hankyoreh
Shared by: JYJ3
JYJ3 
Just treat people equally, they will never complain. Employee work to be paid not to served/worship the employer. No matter how much the investment you cant make stupid logic saying all the money flooding in from their work is a way to pay all the investment. who are you kidding here? 9year old childrens? Even Hotel girls know the value of their services (Sorry I just need to be b* tchy about it. *Bengang nyer aku!*
Oh pls! What difficult to make money?
Of coz if it’s others then perhaps there’s no guarantee. But we’re talking about TVXQ here.
These boys are practically a walking money tree!!
SM earned more than they had invested on tvxq and could even use the money our boys earn to cover other idols who are not bringing in the money for the bloodsuckers shareholders in company!!!!!
and don’t forget the $780,000 plus dollars used to “reward” the execs of SM!
….hmm, I wonder if they’re still bribing the music shows and such. That’s hard-earned money away from the performers who work themselves to exhaustion.
I dont understand their system either, why can’t they have a system where they put the inital investment on the talents teens, then when they become famous, they can get the innitial investment back with maybe a reasonable interest, then after that, use that same investment to investment in other talents. Then, the first idols who have paid their dues can split the profits and distribution with the company. The company jobs are to promote their idols and the idols jobs are to perform. Set up an expection or goals per year, if the idols exceed the expectation, then give them bonuses, if they are under the expectation, then evaluate why, and improve it. See, I can run a company better than those executives and i’m still in college.
Dude… We think the same…
Lets go to Korea and apply for the job as the next SM CEO…
lol, I think the first thing I would do is firing all the current managers and replace them with better more intelligent ppl, but of course, can’t abuse my power too much, lol, I would change their contract policies and enforce a better “fair trade” system, I would modified their existing profit-distribution and treat their staffs more humanly.
Tell it.
Something more YGish then?
is it? cool hahahha maybe they would hire me ? hahah
seriously YG did better and great jobs with their artist (except their activities in Japan)
i also like that they are very selective with endorsements and variety shows
BB dont endorse much but for their endorsements they get 1000000+
it keeps the brand name value high and doesnt tire them out too much
also love that they all get solos that express their individuality
GD TOP-rap
Taeyang_R&B
seungri-pop
@Juno: actually, I luv all the variety shows that they are on, and I think Sm is doing a better job at promoting their idols than YG so, if i am Ceo, there is going to be a major reform lol, *i luv this dream*, but I want to keep the things that they are good at and improve it.
i think its because variety shows can be very tiring for the artists
you should totally takeover SM though, 😀
@Juno: of course, I will give my artists the choice to participate or not, and also my suggestions hahahha, lol, ya, if SM can afford me hahahahah, then I will do my best to reform it, and the first them I become sm CeO, I will send out an apology letter to my staffs, my artists, the fans for all the shitty things they went through because of the poor management from previous executive and then, quit the lawsuit with jyj hahahha
LOL make sure you’re not pro-geese
lol at the pro geese, nope, my only purpose of being ceo is to help jyj, it such a stressful job, i’m still too young to have winkles hahahha
A+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
after learn unnamed songs lyrics,everytime i hear and read about sm e thing,make me vomit.geeeeezz???they made mega big hit,and they salary minus?my poor boys?their heart must be suffered like dead.i cant imagine their situation at that time.our boys such a brave man,survive in darktime and shinning more in glory.god?please forever guard these boys from any demond out there…
that is why I luv them ^^
haha..love the “if-were-the-CEO” talk going on…my turn, i’d make sure every individual will have a contract no longer than 5 yrs (excluding training), then, the share that they get in profits would not be lower than 60%…it would be fun living in a unit with your groups,i need to be careful though, I’d probably get the room next to my DBSK(5) boys..haha!~..I kidd!
I know right, it’s fun, each one of us can be better sm’s ceo and whoever now hahhaha hehehe, I wanna be roommate with chunnie, because i have cats so can;t live with xiah or else, his cats will kill mine hahaha
read this one if i dont know Sm maybe i thing they are supid the way they run business, but beause i know SM that why that evil company just try to cover their ass to excute money gone to their big pocket without pay for their artic! what a big danm joke ever!!!!