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The Truth About Slavery Contracts of Idols Part 2

Updated on April 29, 2015

Click here for part 1 of 'The Truth Behind Slavery Contracts.'

We just talked about the royalty fees that singers get from their albums.

If the singers don’t write the songs, they will not receive royalty when someone revives the song or use the songs. The one that will get royalty are the composers. The singers of the songs will get royalty from the sales of the records. Since most of the songs of Korean idols are written by someone else, the idols don’t get a lot of royalties.

Now, if you are going to question on why Korean artists don’t write the songs, it’s a whole new debate. Some idols are making their own materials but there are some who simply are not mature enough to create their materials. JYJ has famously expressed intentions of writing their own songs and they come out with this…

The reason for the record label getting majority of the earnings of the sales of the songs is that they are also the ones that shoulder the expenses in creating the songs such as studio time, distribution and others.

Yes, it’s not much and that’s why singers don’t rely on record sales to earn. They rely on performances, endorsement deals and other projects.

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Earnings from Shows

For US artists, they get a fixed fee in their concerts. Depending on how big the artist is, they may or may not get a portion of the ticket sales. However, getting a portion of ticket sales is uncommon. The artist usually gets a fixed fee. For example, U2 is currently the highest paid band, earning $1.5 million per show. You, however, have to remember that they are an international artist. Korea’s artists have a smaller market. However, Korean celebrities are still given a fixed fee and a portion of the sales of the show.

Earnings from Endorsements and other Activities

It is only recently that US music artists get independence from their record label when it comes to their other activities. That means record labels don’t have anything to do with whatever music artists do that doesn’t involve their songs. However, these artists still get a separate management company that will take care of managing their career outside of their music. That means a new set of expenses.

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Aside from having a manager that takes anywhere from 10 percent to 40 percent from everything they earn, they pay an agent that takes a standard 10 percent. They also pay their publicist, their own assistants, staff, security and other members of the crew. You may have heard of artists traveling with as much as 40 people. Each of those is getting paid by the artist directly.

In Korea, idols’ record label and management company are one and the same and the management company takes care of all the staff members that work behind the artist. They pay the staff as oppose to the US artists that pay their own staff.

In Korea, it’s also the entertainment company that looks for other projects for their artists as oppose the US where artists have different companies for different parts of their career and also have a separate set of personal staff which they must pay on their own.

In the end, the portion that the entertainment company takes out on the artists’ earnings equate to what the artists will be paying their staff and other management companies for other parts of their career. The biggest difference is that US artists have the whole world as their market while Korea is, so far, limited to China, Taiwan and Japan as a steady market outside of their country.

Long Term Contracts

In Korea, it is common for artists to have contracts that last over a decade. That is not common in Hollywood. Contracts usually last three to five years with management companies while record labels measure the contracts with the artist through the number of albums they will put out. For example, Oasis signed a 7-album contract with Sony in their last renewal.

In both Korea and US, clauses are provided to allow the contract terms to be adjusted or terminated. In both Korea and US, the management companies and record labels will try as much as they can to put the contract to their advantage.

However, SM and YG have both mastered the art of launching artists that break through Asian countries. They have been so good at it that it is almost an exact science for them. For TVXQ, SM estimated that it will take them five years to make it big in Japan. SM was spot on. It took TVXQ five years before becoming a record breaking artist in Japan.

In that five to seven years, the SM operated at a loss as they make investments to push the career of the TVXQ forward. Hence, the need for a long-term contracts. If I am the businessman, there’s no way in heck I would invest in an artist for seven years without a guarantee that I will make the money back.

The controversy about Korean musicians not getting their earnings from streaming and fee discrepancy. Understand it here.

Merciless Schedule

Idols have talked about having as much as 7 schedules in one day which leaves them no time to sleep except travel time between schedules. This is the same scenario in Hollywood. Beyonce talked about not having a single day of rest from the time she launched her first solo album to the time she finished her movie. Even parties are “work” for her.

Justin Bieber, Britney Spears, Arnel Pineda (of Journey) and a whole of other artists talked about how their schedules “suspended reality”. They were living in such an artificial world (doing nothing but work and being surrounded by people that are paid to make them work more) that they have literally lost out on their youth.

It’s not a surprise Bieber ended up the way he did.

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Ownership of the Artist

SM’s “ownership” of their artists and the conditions around it are driven by the nature of culture in the US. SM ‘must’ take care of their artist and do everything they can to keep them pristine as the waters of Adam’s paradise because that is what the market like from their idols. The market care about the image more than they of their music.

It is the same formula that allows SM to create cash cows like TVXQ, SNSD, Super Junior, Shinee, BoA, H.O.T. and others. The market is slowly changing but as a businessman, there is no reason to change a formula that still works.

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SM and YG have evolved through the years, too. Three years ago, SM invited their artists to have a piece of the company through a preferential stockholder system. A year later, they increased the shares of the artists. YG announced the same privilege this year.

This does not happen in the US. Artists may buy a share but it comes with a big cost. Often, they just put up their own management company and work with their existing label.

There is no Justification

This is not to say that everything is right but it proves that Korea’s entertainment culture is the same, if not better, than that of the US. If Korean artists have any intention of penetrating the US market, they will go through worse.

When the three members of TVXQ left, it was for the very same accusations they were accusing SM of doing, money and control. They were aware that if they leave SM, they can earn more and they will have control over their own career. Their contract stated that they cannot engage in any business that could defame the name of TVXQ. Hollywood contracts also contain “morality” clauses. That’s not unique. The cosmetics company was being questioned by SM. They didn’t want that. They wanted to be able to make their own decisions and own themselves. Money and control. There’s nothing wrong with that either.

10 Songs written by CNBlue's Jung Yonghwa you must listen too.

SM was a business company. JYJ was too.

The fact is that SM wasn’t doing anything to them that US entertainment companies aren’t doing to their artists. It is just that US artists are well aware of the price they have to pay. Also, the market is so big that it will take almost a miracle to get the netizens into having some influence over the entertainment companies.

Again, this is not to say that all these merciless schedule and work appointments are right or other clauses in the contract. Just because it is similar to Hollywood doesn’t make it right. Hollywood is a filthy place. This article is only to show that pursuit to fame has a price and the entertainment world is operated like a business venture and artists are products. Whatever idol does, whether it is to stay with the company or create their path, it boils down to two things, control and money.

Click here for part 1 of 'The Truth Behind Slavery Contracts.'


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