Five major entertainment companies in South Korea, including K-Pop giants SM entertainment And Hybi, have concluded an agreement with the market fair trade committee for alleged violations of subcontracting.
The resolution marks the first time that a consent resolution system has been applied to the manufacturing and service subcontracting sector since the introduction of the system in July 2022, said the South Korean FTC in a notice Tuesday June 24).
The FTC consent resolution system allows companies studied to offer voluntary corrective measures instead of dealing with violations.
The resolutions were finalized with Hybe, SM Entertainment, YG EntertainmentJyp Entertainment And Starship entertainment After the companies requested the consent procedure between April and May 2024, the Commission approving the process in December.
He follows an FTC investigation, spear In July 2023, which examined whether companies violated subcontracting laws by not publishing written contracts in advance when the production of musical disks, goods such as sticks and light dolls, video content and performance services, in particular the composition of the scene, lighting and sound equipment operations and sound equipment operations.
In South Korea Subcontracting of the ACT transactions Requires companies to provide written contracts containing statutory information before the start of work, said the FTC.
Under the regulations finalized on June 9, each company will contribute KRW 200 million ($ 147 million) to create a KRW 1 billion ($ 736 million) Mutual cooperation funds, instead of paying fines to the government for their violations.
The fund will provide practical assistance to suppliers. Each company has described specific support programs ranging from grants to a health check, purchases of security equipment for educational courses.
Hybe, the agency behind BTS, allocated KRW 100 million ($ 73,600) over the next three years to support equipment protection purchases for its suppliers. He also affected another KRW 100 million To provide assistance in the purchase of consumables for video production such as memory cards and batteries.
SM Entertainment, which houses groups like aespa And Nctwill be put aside KRW 50 million ($ 36,800) for health control costs or vacation gifts for supplier employees. He also affected KRW 50 million For video editing programs and support for supplier filming equipment.
Before finalizing the agreements with the five K-POP companies, the FTC collected opinions from stakeholders, in particular the Ministry of Culture, Sports and Tourism And Ministry of SMEs And Startups During a 49 -day exam period from February to March 2025.
Key reforms include provisional contracts that can be converted into formal contracts, establishing an electronic contract system, improving the internal contract management system and improving education on subcontracting laws.
The regulatory action occurs while the K-POP economy continues to grow at home and abroad. In 2023, the K-POP market made sales abroad to KRW 1,24 Billion ($ 914 million), according to data of Statista. Total, 47.6% came from performance abroad, while 31% came from album sales abroad.
K-POP companies have continued aggressive expansion strategies abroad. Less than a month ago, Hybe officially launched a subsidiary in China, the The fifth largest market in recorded music in the world. The new one follows another report from the South Korean news agency Yonhap Last month, Hybe is also Planning to create an office in Mumbai, India.
SM Entertainment, on the other hand, created a head office in Southeast Asia in Singapore at the end of 2022. In March, the company announced that it Launch a training academy For the hopes of K-Pop in the city-state.
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