While HYBE wasn’t the person who coined the term, the multi-label giant is facing criticism for charging its labels unexplained fees.
A Korean news outlet reported it MOVES is collecting “lessons” from its labels, excluded GREAT MUSICwhich hosts BTS. THE “suspected” Since then, the fund flow setup has triggered inquiries from Koreans who believe the transactions are a form of racketeering.
Dealsite reported on November 6, 2024 (KST) that, in 2023 alone, HYBE raised ₩15.7 billion KRW (about $11.4 million USD) from I LOVE ITheadquarters of New Jeansfor music distribution e “other service costs”—thought to be some kind of “registration fee” For “artist development”. The article pointed out that ADOR’s intercompany revenue was KRW 3.10 billion (about $2.24 million), a small fraction of what it paid in tuition.
Other labels billed for lessons included Source musicreported having paid ₩11.0 billion KRW (about $7.95 million USD) and BELIFT LABORATORY at ₩14.4 billion KRW (about $10.4 million USD). Source Music’s intercompany revenue was KRW 3.50 billion (approximately $2.53 million), while Belift Lab’s intercompany revenue was KRW 9.30 billion (approximately $6.73 million).
It turned out that BIGHIT MUSIC was the only label that was not charged the aforementioned entry fee.
Regarding the obvious difference between BIGHIT MUSIC and other labels, one insider commented, “Since BTS, under BIGHIT MUSIC, has achieved unprecedented achievements, such as dominating the Billboard graphs”, the tax was waived.
HYBE recognizes revenue from providing various services, such as album production and sales, to its labels. Furthermore, HYBE compensates when it uses artists from such labels in its ongoing activities. Since BTS, under BIGHIT MUSIC, has achieved unprecedented results, such as dominating the Billboard charts, it seems that HYBE spends more on them and uses them extensively in its business.
– Internal
The article has since been interpreted as HYBE extorting its labels’ artists, prioritizing and giving BIGHIT MUSIC preferential treatment. Another insider noted that such “unclear operational standards have led to conflicts,” referencing HYBE’s feud with Min Hee Jinand I noticed it “This is an issue that HYBE must address moving forward.”
The intention behind HYBE’s multi-label structure was to foster growth through parent company support, independent management and healthy competition between labels. However, in reality, this original purpose is overshadowed. The problem lies in the lack of clear standards for adequate compensation, despite the use of human resources.
– Internal
Koreans remain fierce in calling for a tax audit to investigate HYBE.
- “????”
- “Crazy. What scammers.”
- “LOL. HYBE is definitely a shit show.
- “Why doesn’t BIGHIT have to pay? HYBE is not a multi-label company. It’s Bang Si Hyuk’s world where he can do whatever he wants.”
- “Haha, ‘lessons.’ Yes, right. It’s extortion, of course. There would be no reason to make up strange names, like “service charges”, when reporting it, it’s obvious that HYBE is manipulating the charges and submitting vague receipts .”
- “I don’t know, shouldn’t HYBE be the one paying ADOR for lessons learned?”
- “What kind of ‘school fees’ would ever cost more than ₩10.0 billion KRW (about $7.23 million)? It doesn’t make sense. Does HYBE talk about training costs for interns? This is also not expected to cost ₩10.0 billion KRW (about $7.23 million) per year. What exactly are service charges for?”
- “Lessons? What am I, a private school?”
- “Lessons, LOL. It seems like a “special” type of tax.”
- “Wow, this is worse than that Lee Soo Man pulled to SM Entertainment.”
- “Haha. This is no different than, say, a friend with the headquarters of a chicken brand scamming and extorting its franchise owners by setting up a ton of brand-specific suppliers.
- “Oh…”
Indeed, a viral petition to revoke HYBE’s status as a “Top Enterprise,” said to be the first step in bringing controls to investigate the multi-label giant, has since garnered over 47,284 signatures, reaching 95% of the goal.
Read more about the petition here:
Korean netizens start a viral petition to revoke HYBE’s “Top Company” status
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