K-Pop ‘Slave Contracts’ – A Closer Look

South Korea’s music business is thriving and is worth more than $3 billion a year. A huge part of that $3 billion comes from the K-Pop industry which has fans all over the world. Although $3 billion is the monetary outcome, a lot of money is put into these groups prior to, during and after their debuts. In order to try to help protect their investments, companies have the individuals of groups sign contracts, binding them to the company for a number of years.

There has been a lot of coverage over the past few years regarding these contracts, especially those dubbed as so-called ‘slave contracts’ – where the star is signed to the company for a number of years – some reaching as high as 13 like Yoona from Girls’ Generation. But is the situation, and are the circumstances, as black and white as the physical contracts themselves?  Or has there been extreme attention to one side or the other? K-Pop fans are known to get quite aggressive with their opinions when it comes to their K-Pop allegiances, so has this helped to blow a situation out of proportion – or is their uproar justified?

In order to try to get to the bottom of this there are a few things that have to be understood. The first is that very few of us are personally involved in this situation – we are spectators in this debate. The second this is that we all know relatively nothing about this. For all of the reports and all of the hype we still only know what has been reported and are basing our decisions from that. An example of this is the famous Dong Bang Shin Ki law suit, wherein they took their management to court over a 13 year contract and claims that they weren’t getting enough of the profits. They won their case, and the ruling prompted the Fair Trade Commission to bring into play a “model contract” to attempt to improve the deals that idols got from their management companies. The news industry (of any genre) tends to focus on the bad circumstances and report them rather than the good, so of course the stories about ‘slave contracts’ go further than just the ones that have been proven to be so in a court of law. I am not saying that there is no truth in the ‘slave contracts’ – far from it actually, but I am trying to see both sides of the same coin.

One understandable and quite sensible reason for the contracts is to recoup costs from the training periods of all current idols as well as those who didn’t make it. The cost of training idols is effectively a loan that the future idols have to pay back. The cost of manufacturing a group is huge. Vocal coaches, choreographers, stylists, make-up artists, accommodation, living expenses and staff payments are but a few items on the bill. The money from the success of the idol or group goes to paying off all of the staff ‘behind-the-scenes’ after what has been proven to have been seven years of hard work in the past (like 2AM’s Jokwon from JYP Entertainment). After the company recoups its costs, there is sometimes very little left for the artists.

Another stipulation of the ‘slave contracts’ has been reported to have been long and intense hours. These contracts start at training, and whilst it might seem severe, it can be seen as the best way to prepare future idols. The experience is tough, and only the motivated and those who really want the lifestyle will make it through it. Those who are too weak, mentally or physically, will fall to the wayside and not become idols. This may seem harsh, but the companies are protecting their investments as well as (even if vicariously) protecting the prospective idols from breakdowns in the future. The idols and groups spend a lot of time touring, as it is one of the key ways that money is brought in; singles and albums don’t sell as well. Fans pay a lot of money to see their idols live, so the performances have to be good, therefore copious hours of training must be undertaken.

Training is difficult and extremely demanding, but it does seem a necessary evil in helping the stars who really want it and who appreciate the opportunity to prepare for fame. The effortless look of slick, in-time dance moves, pitch perfect vocals and stunning wardrobes don’t just cost money, they cost time, blood, sweat and tears, and for most, it’s worth it – an example of this is seen in the stills of members of 2NE1 from 2NE1 TV (click to enlarge to see the text).

BH tired BH CL too hard BH CL cant wait BH bom dream

For many of the idols and groups, the pros of these contracts outweigh the cons. For most of them they are living their dream; they have earned and achieved their goals and the sheer hard work and determination that it took for them to get there has paid off. Whilst it may be true that they do not earn as much money as most fans would believe that they do, they have almost everything supplied for them. Food, wardrobe, stylists and sometimes even accommodation are provided for them; they often have no need to spend money on the cost of living. The money they do earn whilst they are idols can go somewhat untouched.

However, sometimes the sacrifice these men and women make can go beyond hard work, little sleep and low pay. Success in any field, writing, acting, art or anything else, requires some form of sacrifice, but sometimes in K-Pop, things can get too extreme. In the video clip below (which is a little out of date with regards to band members, but the point is still made), Joy from RaNia spoke of not being allowed a phone, or being able to hang out with friends or have romantic relationships prior to debuting with her label.

At times these contracts can be quite demanding and seem unrealistic but a contract has to be signed in order for these artists to be legally bound.  Several of these artists are very young when they are signed to training, but they still have parents who could read and (if the prospective idols are under a certain age) are obliged to sign aswell, therefore there is an understanding of what will be asked of the would-be stars. I can’t help but think; if the situation is really that bad for the majority of K-Pop stars, wouldn’t there be a lot more controversies and lawsuits?

Like I said earlier, I am not saying that there is no truth to these ‘slave contracts’, I firmly believe that they exist. What I am saying is that perhaps they only seem unreasonable to the few who have spoken out against them. Perhaps to some, the end result is worth the conditions featured in the contracts and they are willing to sign their names on the dotted line. It also seems to only be SM Entertainment that have 13 year contracts, others like YG are signing off on 7 years.

Are those who break their contracts or fight against them ungrateful for their position, for the dream thousands want, or are they standing ground, and trying to pave the way for a fairer and more relaxed path to success? Are those who stay under the ‘control’ of the contracts being oppressed by money hungry companies, or are they accepting and understanding of what is being asked of them in order to live out their dream? These are the questions which can only truly be answered by the idols themselves.

This article is part of  a series we will be posting over the next few weeks about the workings of the K-pop industry. Let us know your thoughts in the comments about ‘slave contracts’ and anything else about how the industry operates!

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  • http://twitter.com/mydunn123 kakashi

    very interesting post, thank you. I myself am a KDrama addict but hardly ever listen to KPop – so I’m completely neutral (or unemotional) about the workings of this industry (not as neutral about KDrama working conditions, but that’s another story!). I find your reasoning convincing – it’s a give and take, and those who make it, are hard as steel and well prepared for the great ordeal they will go through. However, companies certainly not only want to get back what they invested – they want to make (fat) profit, too. And I guess that’s the issue: where does the profit go to once the debt has been paid off?
    As for the “hard lives” of idols: they want this life and know what they’re getting themselves into. I don’t feel in the least sorry for them.

    • http://orion21.blogspot.com/ Orion

      I disagree about knowing what they are getting themselves into. A lot of idols start work when underage. They are given this image of fame, money and glory and I doubt the negative sides of the industry (no freedom, being whored out to sponsors etc) are described to them, not that kids can really understand anyway.

      This is often a case of abuse of minors. Parents allow their kids to go ahead and do it, because they are also in the dark and like the idea of the money it might bring. It’s child abuse, both from the side of the parents and also the industry side.

      Yes, an adult getting into this should know better, but we still can’t turn a blind eye if they also got tricked into more than they can handle. This is a daaark dark industry. Even darker than the kdrama one. No person deserves what most idols probably have to go through and it’s also not as simple as “leaving”.

      When you are in what is essentially a mafia-like web of money, everything from your financial to your physical well-being might be threatened if you disobey. And no, justice won’t save anyone. This is Korea we’re talking here. They own justice just like it’s owned by someone everywhere.

      So, it’s not as simple. Many might go into it completely aware of what’s to come, but I doubt most would. By the time they realize it, it’s probably too late.

      • Bc

        I think Mafia-like to describe the industry is a somewhat accurate way. But I’ll go to another level and say that this can be applied to almost every entertainment industry in the world, including America.
        The music industry in there have tons of abuse going on I’m sure what with these young artists getting into there. But probably they aren’t bound by Unfair contracts or working to death like most kpop artists have to.
        Some people who simply dismiss an artist suffering because they should have know what they are getting into, is even worse because it doesn’t justify what the company doing is correct just because someone signed a contract.
        Contract can have unfair terms, and I agree that consider most artists are underage, does not have the right mentality to distinguish or truly understand many things.
        And when they try to leave, just like JYJ, they’ll more often try to screw you over.

    • Victoria

      Thank you :)
      I’m working on a ‘follow-up’ piece to this that will hopefully make it to the site withinthe next few weeks. Keep checking back :)

  • Terri

    A nicely balanced article that gives food for thought

  • Michael

    “One understandable and quite sensible reason for the contracts is to
    recoup costs from the training periods of all current idols as well as
    those who didn’t make it.”

    I don’t accept this as being understandable.

    Re-classifying idols’ income from being a cost for the company to instead being a share in profit is an arbitrary decision. The company should take the risk because that’s what all other companies do. The investors and music companies have shifted the investment risk from themselves – where it should be – to the idols – who don’t know better.

    As we all know, an idol performance is a whole package. The song writers, music producers, choreographers, stylists etc. All of those people work just as hard and are artists just as much as the idols. So why should idols not be treated like all the other artists and be a ‘cost’ for the company to pay?

    Hollywood used to have something called the studio system where actors were under restrictive and unfair contracts. Now though actors get paid a fee and it’s the movie company’s responsibility to recoup those costs as well. It would be much fairer if K-pop did this as well.

    • Pyonkun

      As an accountant, I totally agree with you. This method of recouping costs is bull – it doesn’t match properly. Its not the artists’ fault that the label wasn’t smart at choosing who to produce and who to give up on. If a label chooses too many failed artists, they deserve to fall – don’t penalize the ones who did succeed. These contracts have *none* of the provisions that a similar US contract would have (reasonable hours, % withheld until age of majority, etc.) so I still believe there’s a lot more credibility than is being attributed to the rumors in this post.

  • Katieee

    What i would like addressed and/or for someone to inform me about, is whether or not Korea has any form of child labor laws, or requirements to be in school for X number of days, on-set schooling, etc..

  • ANN yoou

    love this article, It would be great if all those idol-crazed fans read more stuff like that to understand the situation instead of siding completely with idols against their companies …

    idols are not really artists, most of them are products produced by the company (sorry to use that word) , everything head to toe, & everything they learned, ( plastic surgery, dancing lessons, language classes, vocal coaches, choreographers, composing & the list go on) is something the company paid for and this is all before their debut …

    it’s really good to see the two sides of the situation, am not saying all those companies are so great, am sure there are some unfair ones, but .. we don’t really know what happens in there… and which is which?

    and also regarding this issue, this is an interview I found interesting

    • Victoria

      I’m glad you liked this article! Plus, thank you for the link too, I also found it interesting.

  • Artur Volpi

    You are trying to be neutral, but you come across as pro kpop industry to me. Like some people have commented, Charging for training costs, and then getting massive profit cuts is just down right outrageous. Meaning, they will never loose money, they will charge for the costs of non-profitable as well as profitable (I’m assuming they make no money here) training and so fourth, moreover they will acquire the majority of profits from successful artists! Do you even know how business works?

  • Lynn7849

    In America, where I am from, this sort of contract is called Indentured Servitude and, like slavery, is illegal. Both slavery and indentured servitude were made illegal by the 13th Amendment to the U.S. Constitution in 1865, though for all practical purposes remained in existence for anmother 100 years under the Jim Crow laws of the post-reconstruction, post Civil War South where slavery had had its largest hold on society.
    Your article is long on opinion and short on fact. Some dedicated research, investigation and reporting would have made this a much more interesting and compelling story. Interviews with people in the industry, particularly those who have signed ‘slave contracts’ and the effect they had on their lives, for example, would have provided some much needed substance to this article.
    I have lived in South Korea for five years and from my own observations and talking with Koreans, I find the expectations of working long hours in hostile environments that are an integral part of Korean society a bit hard to understand, to put it mildly.

  • John (WesternU)

    I grew up listening to the 1st generation idol group (HOT, FinKL) and there was a time when I bought into the whole fantasy and allure of their existence. Now in my early 30s in the US pursuing my professional degree I feel sad what has happened to my home country.

    The entire nation is basically wired to the matrix living a fantasy world. Kids are seduced with the idea of being pop stars instead of dreaming of real careers that can last them longer prosperity and genuine respect. Korea itself does not provide any infrastructure to succeed in life. Being brutally honest, becoming a pop star is a complete crap shoot competing against so many kids. Being a pop star does not pay well or stack any promising experience to contribute to a transitional career once it’s done. Even if their shelf life lasts any long once they reach around my age, they’re dead as Latin replaced by younger kids with no other job skills or knowledge other than dancing and singing like clowns.

    Lets be honest. No one actually gives two shit about the artistic aspect of the music. It’s about who is prettier. Quite frankly I’m amazed what passes for “masculinity” in Korea compared to what I’ve come to know as an American. Pale skin, skinny frame, scarves, wearing dress shoes with no socks, pink or some other neon color clothes, ridiculous hairdo, and exhibiting just about every fidgety beta male body language and traits you can imagine.

    I spent the last 15 years standing shoulder to shoulder studying and growing old with just about the most brilliant kids on the planet who are now earning boat load and being praised as the shiz because they worked very hard and continue to get better. It’s that dream that I continue to slog long hours myself because I know my path does not get bound down by a slave contract, needs approval of some mindless flock of horny people, and become obsolete once the hype washes off or I become too old and less spry looking. I am eternally grateful to my mom and dad for instilling that notion in my head and got my out of that cesspit of a country in time. K pop is practically porn at this point. 1/3 of the little kids want to be part of it? I see the 1st generation artists nowadays accepting every lame job invites and acting like dweebs on the internet because they have to scrounge for coins and it really is saddening.

    Best wishes for the little kids and hope they got plan B and C once their contract is up. NBA players, though they fritter it away, at least get paid shit ton before they retire. Korean idols? It’s like they party hard for 5 years without actually getting laid or chilling doing what they want. No sex, no money, no freedom, just living a dream before it runs out. Once it does run out, according to my mom, just literally commit suicide. That’s reality people.

  • paolo mezzadri

    do you really think that sm is so much different from yg ??!!! seriously they are the same

  • Michelle Em-i Kaisoo

    Thanks for the post.. I’m a hardcore yg stan and exo fan. I don’t see any problem with YG artists but with EXO, i just don’t know. Is it because of SM? I don’t like any other SM artists except EXO. But, in my opinion, I just have a weird feeling that SM is treating them unfairly.. I’m not being delusional but I think Baekhyun and Taeyeon dating is a lie.. I think that they are just using Baekhyun (idk about Taeyeon because idk anything about her). To cover up, maybe Kris’ issue?? It’s just weird..

    • Bc

      Somwhow I feel the same about Exo being treated unfairly, it’s like the company is trying to work them to death, I’m sure other artists work very hard as well, I donno, it seem as though they chain them the most compare others maybe because they’re currently very popular?

  • Silenter

    Talking about this topic, I read about Han Geng’s contract (He used to be in Super Junior but now does his own things back in China and such), and they treated him in a manner that’s “discriminating and unfair”. They screwed him and his family on the level of finance and even outside finances. I’m not sure if this is entirely true. (I have to yet look into this more closely) I also read that Han Geng was forced to constantly work as if he was some sort of a robot, without a single rest/sick day, and eventually got a kidney disease, and something else along with that. Now that is extremely unacceptable by ANY standards. (Who the hell does THAT to a human being?)

    The idols who work just as hard as any other staff member that helps them to prepare for concerts, tv shows, events, etc should be at least treated like the staff members, even if they not “staff members”. I hope this is understandable. I don;t exactly trust SM Ent., since they actually got investigated by FTC, and had to change their contracts and such, but I still doubt them.

  • rgglove16

    but still the training makes the korean idols literally unbeatable. There is no one else who can dance, sing, act, do commercials like korean idols. The behind the scenes may not be pretty but the result is magical. if the contract didn’t exist then the companies wouldn’t invest that much time and effort into those idols if they knew they are just going to up and leave them once they are something of a talent after much training thanks to the company. It may seem strange to Americans but I don’t see American pop thriving, if you call that a music (booty hopping, ass shaking, wack lyrics, and some lame ideas that are hardly ideas) yeah they needed training and contracts to keep them from doing cocaine. Seriously who has heard about a kpop stars doing drugs going to jail ….anyone? …anyone? yeah. American music industry is even more screwed up and here you are judging….hip hop in america is about guns, calling women whores, chains and cash! At least in korea it’s more of an art and not a screwed up culture that negatively impacts children. Why don’t you analyse your own country before you have a shit to say about others’. Who gave Americans the right to say about how other countries run their business anyway? Why do Americans always have shit to say when their own yard is full of shit. F***

  • Linneus

    This honestly just seems like the author is trying really hard to justify the mistreatment of people in this industry because they don’t want to see their favorite kpop groups change…