[theqoo - hot] Full text of the email (document) sent by Min Hee-jin, CEO of ADOR to HYBE's management
date: 17/04/2024
Dear Hybe Management:
On April 3, 2024, ADOR Co., Ltd. expressed its position and requested corrective action against Hybe Co., Ltd./Belift Lab Co., Ltd. regarding the damage to the brand value of NewJeans due to ILLIT's plagiarism controversy.
(Refer to the email and attached files below)
The controversy over ILLIT plagiarism is only a small part of the problems that have risen between NewJeans and HYBE so far that have surfaced. The legal representative of NewJeans said that the various sabotaging acts, discriminatory and unfair treatment that HYBE has been carrying out against NewJeans are so serious that they cannot be tolerated, and earnestly requested ADOR to request corrections from HYBE. . Accordingly, ADOR who is responsible for the management of NewJeans, would like to state the position of NewJeans' legal representative and ADOR in this regard as follows.
Although the previous email was sent to HYBE, including Belift Lab, Belift Lab only provided a response saying that it was preparing a response, and there has been no clear response from HYBE as of yet. NewJeans' legal representative and ADOR are awaiting HYBE's response. This email, as well as the previous email, is not limited to ADOR/NewJeans, but is also about HYBE's ethical management and sustainable management, so I am sending it to HYBE management.
The big problem with HYBE is that it follows the ills of the existing industry and continues to engage in immoral behaviour without any sense of criticism. The company is not fulfilling its social responsibilities as a representative company in the entertainment industry, and its governance structure is also not transparent, resulting in increased direct and indirect damage to NewJeans.
1. The most representative example is HYBE's ‘album inflation’.
‘Inflating out albums’ refers to the unfair practice of using distributors or overseas subsidiaries to place large orders or hastily hold fan events to artificially inflate sales volume within a week of release, i.e., ‘initial release sales volume’.
This is an act that disturbs the fair market order by sending false information about an artist's performance, making a team that is no longer growing appear to be continuing to grow, or exaggerating the performance of a project than it actually is.
In particular, the impact on the stock market due to the album pushout is more serious. It not only inflates the numbers, but also seriously distorts the growth potential and future of companies and the entertainment industry.
This has already received strong criticism from public opinion as an act of deceiving shareholders, members, the capital market, and the fandom. If this act continues, it will ultimately become an unhealthy issue that will destroy the ecosystem of the entertainment industry from its roots. Nevertheless, the fact that HYBE, a leader in the industry, is taking advantage of regulatory blind spots to inflate album numbers is a very serious problem.
NewJeans was encouraged by HYBE to ‘inflate up album sales’.
When NewJeans released their 2nd 'EP Get Up' album, they were advised by HYBE to inflate the numbers by 100,000 copies, saying they could beat Aespa's initial record, but we flatly refused this offer because it went against ADOR's business philosophy.
The reason ADOR refused this, was because we were concerned that the organic first place records that NewJeans had achieved so far without inflating album sales could be tarnished and that the various business opportunities that arose as a result would be damaged. For reference, when the issue of 'inflating' was raised, the legal representative of NewJeans queried ADOR about the matter, and ADOR responded confirming the fact that NewJeans does not do any inflating of album sales.
If the 'album inflation' issue reaches public attention, it will cause a bigger problem in the future, even NewJeans, who resolutely refused to inflate the album sales just because they are a group in HYBE, will be misunderstood as using 'album inflation' to disguise their achievements. Accordingly, ADOR, who is responsible for managing NewJeans, wants to prevent a situation from occurring where not only the album sales but also the hard work that ADOR/NewJeans has made to grow without using tricks is completely denied. It is already a serious loss to NewJeans that they are not fully recognized for their value even though they have excellent results without 'inflating out album sales'.
Above all, the biggest problem is that the belief that success can be achieved solely through music and performance/content without any shortcuts can be broken. This destroys the market's vision and hope.
I hope that the perception that ‘those who don’t do it are stupid’ will no longer spread.
Even groups like NewJeans, who have high album sales without 'inflating album sales', were encouraged to do so, saying that they could surpass other groups' records. But what about other groups?
It cannot help but be said that this shows HYBE's serious lack of ethical awareness.
Accordingly, we criticize the absurdities and contradictions of the existing entertainment industry and strongly urge improvement and prompt correction of HYBE's two-faced attitude that aims to promote the entertainment industry.
We know that this is already a widespread problem within HYBE Labels, but we ask that you thoroughly investigate and deal with it transparently to see if there are any transactions with subsidiaries that could be seen as 'record pushback', including whether there are transactions conditional on returns.
2. HYBE limits the opportunities for labels to select the best partner through fair competition with each other in all business areas except production, including distribution, business, and management.
The recent contract between HYBE and UMG to exclusively distribute albums/sounds for 10 years is hindering NewJeans' future work. They say that distribution fees can be lowered in the short term, but it is not reasonable for a fast-growing artist like NewJeans to have a contract that only allows them to deal with a specific label for a long period of 10 years. Although it is reasonable to induce competition among companies to achieve the best conditions through a short contract period, the contract between HYBE and UMG may result in NewJeans offering lower distribution fees or offering better conditions for NewJeans. The opportunity to find labels that exist has been completely blocked.
Also, even if the distribution fee has been lowered, the label is paying an internal distribution fee of almost the same amount to HYBE in addition to the external fee paid to UMG, so from the label's point of view, it is actually like Samson Mosaic. No matter how good the company achieves in the future, it is not at all reasonable for NewJeans to have to pay significant distribution fees for the next 10 years.
The problem doesn't stop there. An even bigger problem is that the level of service provided by UMG labels is not high, so satisfaction with them is also not high.
This is a complaint not only by ADOR, but by all labels within HYBE.
In other words, even if unsatisfactory services are not improved due to this contract for the next 10 years, you will have no choice but to use labels under UMG. Therefore, this long-term contract not only reduces the motivation of UMG-affiliated labels to improve their services, which is still a serious problem, but also constitutes a significant business interruption that weakens ADOR/NewJeans' overseas competitiveness.
The long-term contract between HYBE and UMG causes more harm than good to NewJeans, and it is unfair for the label and artist to have to fully bear the resulting risk.
When negotiating the contract with UMG, it would have been clear that NewJeans was a good card to use in the negotiations from HYBE's perspective, but one cannot help but wonder what level of service and benefits NewJeans actually obtains from HYBE.
3. A big problem is that HYBE is not prioritizing the improvement and advancement of label operations, which is its main business.
HYBE currently urges labels to conduct various businesses with HYBE, including rights to businesses such as performances and MDs, agency rights to advertising and album/sound recording distribution, regardless of the capabilities of HYBE's business organization or quality of service. .
However, it does not matter much from the label's perspective whether the operator is an internal affiliate or an external company. This is because the label considers the business performance ability of the business operator to be the most important.
Because we have experienced in several cases that HYBE's business performance ability did not meet ADOR's expectations, ADOR should secure its own resources for performance, advertising, and MD business while seeking out other external partners to achieve better results. However, resolving the relationship with the existing internal business was not an easy process.
For example, in the case of the advertising business, NewJeans was in a situation where various advertising proposals were flooding in from outside due to their high topicality from their debut, so it was in a situation where it was only necessary to manage well the advertisers who were voluntarily brought in without any artificial advertising sales. However, issues raised by the Brand Synergy Business Team, which is in charge of the advertising business, led to frequent unnecessary disputes not only with advertisers but also with labels.
ADOR raised the issue several times whenever this situation occurred. However, even through raising these issues, no improvement was achieved, and it was only after a fatal incident that it was finally resolved. A conflict of interest arose in the process of pursuing a new contract between Le Sserafim and an overseas luxury brand that was under contract with NewJeans, and the Brand Synergy Business Team was exposed as having signed a contract with ADOR and the brand based on different lies. .
It is natural for the Brand Synergy Business Team to treat each label, ADOR and Source Music, equally. However, the Brand Synergy business team was biased toward a specific artist, and only after such circumstances, revealed that they were able to accept ADOR's protest and finalize the contract by returning three months' worth of agency fees.
In the process, the unnecessary work of meeting the brand in person, determining whether they match or not, and weighing the right and wrong was also entirely the label's responsibility.
Although we had to pay the same commission rate as an external business and had experienced an unfair situation with a clear reason for cancelling the contract, the process of cancelling the contract was not easy because we were an internal business team belonging to the same affiliate. Rather, after the destruction, we had to hear unfounded rumours within the company that ADOR was a difficult label.
Despite the fact that an external business was deemed necessary for a competitive performance or MD business and proceeded in compliance with the regulations and procedures, because of the external transaction, the company gave unnecessary warnings and cautions as if these procedures were in violation of HYBE's internal regulations.
If the quality of HYBE's infrastructure is judged to be insufficient, the urgent priority should be to improve the competitiveness of those carrying out the business. However, rather than finding ways to encourage and improve the competitiveness of business operators, HYBE only manages the label's performance indicators based on consolidated sales, an indicator that is advantageous for increasing HYBE's size.
The problem of distracted management that prevents the company from focusing on its main business is also evident in the performance of HYBE's new corporations.
In 2021, Ithaca Holdings was acquired for an astronomical amount of 1 trillion won, but since then, HYBE's global business has not shown any results. Businesses such as platform / game / voice AI / blockchain also showed sluggish performance despite large investment of funds and personnel.
As can be seen from the 2023 business report, HYBE America (-142.4 billion won), HYBE UMG LLC (-23.4 billion won), Weverse (-4.4 billion won), HYBE IM (-20.9 billion won), Superton (-6.7 billion won), Binary Korea (-3.8 billion won). The performance of new businesses is so shabby that they are all recording negative results.
Despite serious losses due to additional businesses rather than the core business, HYBE's 2023 performance report was busy correcting the poor businesses.
The foundation of the entertainment business lies in the label business, which nurtures and manages artists.
In 2023, NewJeans achieved an unprecedented increase in performance in less than two years, unprecedented in the 30-year history of the entertainment industry. However, IR/press releases do not even mention the overwhelming growth of NewJeans. Rather, there was an incident where biased IR script content was discovered and corrected. Why does this happen so often only for NewJeans?
4. HYBE's Shared Service, which supports ADOR/NewJeans, is in desperate need of improvement.
As emphasized earlier, the essence of the entertainment business is the label business, and it is right for HYBE to play a role in helping the label business thrive.
HYBE's Shared Service is currently avoiding the essence without understanding the multi-label system. It is difficult for the Shared Service in a multi-label system to become a support organization that simply performs common functions according to instructions, that is, pursuing military-style efficiency.
Every year, ADOR pays HYBE an amount equivalent to 'ADOR's total labor costs' as service fees for legal, human resources, finance, public relations, and IT. However, despite the need to support a rapidly growing business and improve production and operations, labels' satisfaction with the services provided by HYBE is low compared to the high fees.
Considering the conditions and growth trends that inevitably differ for each label/artist, delicately considered support is needed from the label and artist's perspective, but as in the case mentioned in 3. above, HYBE - between labels, or between a label and another label, there is no balanced attitude.
As everyone knows, NewJeans has achieved exceptional success right after their debut. However, HYBE PR maintained a lukewarm attitude even though these success stories could have been reported as they were. We objected to this attitude of HYBE PR several times, but this attitude continued steadily and was found in IR/PR scripts, and foreign and domestic reporters saying, 'The HYBE PR team seems to be passive in NewJeans PR compared to other artists in HYBE.' There were also cases where people contacted ADOR directly requesting the provision of related materials.
In addition, the 'Industry Trend Review' document circulated internally every week by Kang Myeong-seok, editor-in-chief of Weverse Magazine, continued to contain biased content. ADOR objected saying, 'Facts such as numbers and indicators are necessary and maintain at least a minimum of objectivity.'
I also raised this objection to CEO Ji-won Park, but received feedback saying 'don't read it' and to CHRO Kim Joo-young, 'think of it as one individual's opinion.' I am not sure why the contents of an individual without public trust, lacking objectivity, should be distributed to company-wide executives as if they were a representative. Due to the bias of the contents, there are even doubts as to whether they were distributed for some kind of purposeful propaganda/dissemination.
Considering the impact and ripple effects that one individual's error in judgment about the market may have on those who move from other industries and are not familiar with the entertainment industry, it is difficult to just ignore it and dismiss it as a trivial matter.
However, even in recent documents, we have heard that the self-consoling attitude of choosing to review only the desired responses while ignoring the negative responses related to the controversy over ILLIT's plagiarism is still continuing. ADOR had already requested to unsubscribe, but we recently received this information from other recipients and were able to confirm that ADOR was not the only one who did not agree with the review.
Not long ago, NewJeans distributed unprecedented news that their first performance in Japan would be held at Tokyo Dome.
However, coincidentally, HYBE distributed the news that a UMG distribution contract had been signed on the same date and time and announced that this was good news. After reading this article, the legal representative of NewJeans contacted ADOR with the following information.
“Isn’t it possible for the HYBE PR team to distribute and control all articles from the desk? If the UMG incident is good news, it would be common sense and more beneficial to HYBE to separate it from NewJeans' big news and promote it as a continuation of good news every day. It is not enough to focus on NewJeans, which announces their long-awaited comeback, and promote the big news of a group with the shortest entry time into Tokyo Dome. “Well, I’m curious as to why HYBE bothered to promote the greatness of the UMG contract article by distributing it in an overlapping manner.”
Even if the dates overlap by chance, the reason for HYBE PR's existence is to find a way to maximize mutual benefit by gathering and organizing all news, discussing and coordinating it.
In particular, this is quite a contrast when compared to HYBE's overt support for ILLIT, which even though they have a different label from NewJeans and a higher average age, they even go so far as to describe them with the modifier 'HYBE's youngest daughter' only when promoting them.
When we asked the CCO about the ILLIT plagiarism incident, the response was, “There was talk of plagiarism before debut, but we believe that such controversy has subsided after the official debut stage and music release.”
It is a public fact that the plagiarism controversy has become a widespread issue. And regardless of the controversy, there are still labels within a company that have become victims of unnecessary noise issues.
What is surprising is that even high-ranking executives in charge of HYBE PR are casually conveying opinions that are biased toward a particular label to the affected label.
It seems that HYBE must first realize the very obvious fact that 'the problem is that the plagiarism controversy was talked about and became an issue' and that there are people who have been 'damaged' by it.
5. What are HYBE's business ethics principles? NewJeans' legal representative and ADOR ask HYBE.
HYBE's actions, such as the parent company recklessly taking advantage of well-established subsidiaries, emphasizing that it is only one company, marketing in relation to the other party without their consent, and consistently maintaining a shameless attitude of turning a blind eye and ignoring them, are in protest against the long-standing irrationality of the entertainment industry at the time of its founding.
If they were really confident in music, why did they need to copy NewJeans' concept, why did they need NewJeans' choreography, and why did they need to take advantage of NewJeans' topicality? Why can't they compete fairly based on their own work? Can you be happy with the results you get?
NewJeans' success changed the KPOP trend to the extent that the term 'NewJeans Syndrome' was coined. As a result, the trend of music production also changed significantly from the existing girl crush style to the easy listening style represented by the so-called 'NewJeans style'. This was a title of market leadership and multi-label success, which greatly contributed to HYBE's corporate image as well as its stock price. Rookies who debuted after NewJeans were influenced by NewJeans regardless of gender, and HYBE joined that trend to a degree that was problematic.
For what reason is HYBE, rather than protecting ADOR/NewJeans, who changed the trend of KPOP and led the way, the parent company steps in and creates a problem and factor that hinders the activities of NewJeans?
Why do organizations and people who have not contributed anything to the creation of NewJeans' unique identity carelessly use NewJeans as if they were public property and use them as if they were common, damaging the image of NewJeans that was carefully built up?
In order to raise ILLIT's unprecedented awareness, HYBE used NewJeans, the most notable and popular team, to raise the topic as much as possible, and it was not enough to exhaust the image by generating the amount of mentions through comparison/contrast. Dardara even took advantage of the negative response to damage NewJeans' reputation for value.
This incident confirmed that HYBE has no concept of artist RM or the basic concept of balanced respect for its creators/artists.
While I am devastated that this happened not to another company but to the parent company, I ask how ADOR/NewJeans can be compensated for the damage they have already suffered.
The legal representatives of NewJeans and ADOR hold HYBE accountable for unnecessarily exhausting and using the value of NewJeans instead of being considerate of NewJeans, and demand realistic corrections to the contents of this letter.
In addition, we request a complete revision of the ILLIT marketing direction and concept.
Chairman Bang Si-hyuk, who said in 2019 that he had admired Min Hee-jin's creations for a long time and was proposing to recruit her out of a spirit of sincerity, ultimately stemmed from the expectation that Min Hee-jin's creations could be easily stolen and utilized.
It was rude and irresponsible for the plan for HYBE's first girl group to be unilaterally changed/notified before LeSserafim's debut, but that was not enough. They asked us not to promote the 'Min Hee-jin girl group' until LeSserafim's debut. What CEO Park Ji-won pleaded with Min Hee-jin still remains as a record of the conversation. I understand it was Chairman Bang Si-hyuk’s request.
Nothing has changed between now and the time when HYBE made a bizarre and incomprehensible request not to promote NewJeans for the nonsensical reason that revealing that all members are rookies would clearly reveal what kind of team Min Hee-jin is preparing for.
Externally, HYBE appears to be operating rationally by promoting a multi-label system, but looking back at the time when ADOR was founded, this is also not true.
Min Hee-jin was unilaterally informed by Source Music that her debut plans had been changed by HYBE.
The story was that LeSserafim would be HYBE's first girl group, and the trainees from the debut group at the time would become Source Music's next team. The trainees from the debut group at the time included current NewJeans members.
Even if HYBE had first broken its promise and unilaterally changed the timing of its debut, asking for understanding and voluntarily proposing the idea of establishing a separate label, it would not have been easy, so they are the next team of Source Music.
Although Min Hee-jin was used to publicize the group as HYBE's first girl group and contracted trainees based on that publicity, HYBE easily betrayed its promises like a dedicated partner. At that time, Min Hee-jin and other current executives and employees of ADOR became very disillusioned and resigned. However, we did not want to be perceived by the public and the remaining trainees as people who were not responsible and did not keep their promises.
I explained this intention to CEO Park Ji-won at the time and offered to establish ADOR and plan a separate debut.
Was the process of establishing ADOR a pleasant and easy process?
Looking back on various past events, I can't help but think that there are people around Chairman Bang Si-hyuk who speak frankly enough to biasly describe and report even industry trends that must be faced objectively.
I would like to speak clearly this time as the failure to correct the unreasonable demands from three years ago seems to have continued and reoccurred into the current problem.
Not only ILLIT, but also LeSserafim suffered from constant plagiarism disputes regarding the concepts and songs of the three albums they released. I heard from overseas producers and officials working with ADOR that they are discussing costs with HYBE for LeSserafim songs due to plagiarism issues.
I believe that reflection and improvement are more urgent than ever.
I heard news that HYBE may soon be designated as a conglomerate.
We hope that HYBE will not imitate the bad aspects of large corporations and instead seek ways to practice ESG management befitting its status. We hope that you will now feel responsible for the multi-label system that we have been promoting externally and that you will set and implement improvement and future-oriented goals.
I believe and propose the suggestion that Chairman Bang Si-hyuk preached internally and externally, “When faced with absurdity and irrationality in the business, even if it is difficult to talk about, we must speak out and correct our opinions.”
I hope that we do not make the mistake of applying anachronistic logic such as ‘When the parent company does well, it ultimately benefits the subsidiary’ and ‘If the result is good, the process is glorified’ to KPOP, a leading global entertainment industry, and cultural arts business. .
This kind of thinking rationalizes outdated practices and bad habits that focus on specific people and specific organizations, such as 'military soccer', and eventually slows down and disintegrates the organization and further devastates the entertainment industry as a whole.
If you create a multi-label system for diversity and risk diversification, make it 'different'. And create a healthy business environment.
There is no need to go as far as respecting the creator. It is not common sense for a company based on creativity to mass-produce copycats, even for the rights and interests of shareholders.
In terms of business, this is a foolish and short-sighted decision that will ultimately result in the loss of both.
This is contained in an online town hall message distributed by Chairman Bang Si-hyuk to the entire company at the time of HYBE's listing.
“My fundamental philosophy regarding company management has not changed. By basing it on common sense and working to solve the problems necessary to implement that common sense, we ultimately contribute to creating a better world.”
“It will be an opportunity to advance management by increasing the company’s management soundness and transparency.”
Currently, HYBE seems more desperate than ever to practice ethical management in all aspects of creation and management.
As Chairman Bang Si-hyuk said, I hope you will make efforts to solve the problems we are currently facing.
I hope that HYBE will find common sense, sound, and transparency.
Please respond to the requests for correction by NewJeans' legal representatives and ADOR by April 23, 2024.
(translations may contain inaccuracies)
COMMENTS
- Min CEO said she didn't start this job because she liked K-pop, but it feels like she loves K-pop, or rather music more than anyone else. To Bang Sihyuk, music... was and still is just a means of making money.
- It's such a long post but it's easy to read every single detail. Min Heejin will revive the K-pop that HYBE ruined.
- 👏🏻👏🏻👏🏻👏🏻👏🏻 What an incredible person. I support CEO Min Hee-jin.
- Wow, this is why HYBE trying so hard to get rid of Min Hee-jin.
- She really is a martyr... Fighting, Min Hee-jin
- ADOR just always worked really hard and was active in protecting their artists.
- Min Hee-jin is kicked out for working really hard... eugh.
- She's so cool, I hope she wins. I'm rooting for her.
- It really feels like Min Hee-jin is writing history... She's so cool, I support her.
- The content here is all correct... I also understand what she said during the press conference. There is a lot of similarity in the second half of the content here with the content discussed at the press conference. She said it as if she was reviewing everything that had accumulated over the years.
- Looking at this, I understand why they are trying to kick Min Hee-jin out of HYBE.
- This email was the starting point of this incident. From HYBE's point of view, they were trying to start a revolution. And the fact that HYBE planned to terminate the exclusive contract with NewJeans, which had been cancelled, was not a contract with ADOR or HYBE, but an attempt to invalidate the exclusive contract with an affiliated company. The reason is poor quality service, and they asked for a reply by the 23rd and they “replied” on the 22nd by accusing them of breach of trust, they're incredible aren't they
- The only person who says the right thing is Min Hee-jin..
- HYBE is a corruption... They've grown so big but what they're doing is shit
- Min Hee-jin, you said that you shouldered your guns not only for your own business, but also for K-pop
- I guess they wanted to stab her to death just for saying the right thing...
- HYBE is ruining all of K-pop
- The press conference was just the tip of the iceberg
- Wow, this is the first time I've read an article like this. It's a series of correct statements without any twists and turns.
- This is my first time commenting on this situation. If what you say is clear, even if it is long, it can be easily read. It is much more persuasive than talking nonsense for a long time. I want to support her.
- ㅠㅠㅠㅠㅠㅠ Even just reading this, I feel so frustrated and want to cry, I can't even imagine how angry the people involved must have been ㅠㅠㅠㅠㅠㅠ
- This person is a real martyr
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