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MIN HEEJIN'S LETTER TO HYBE RE ADVANCE PURCHASE TACTICS & OTHERS
🕑 Added 2024-05-18 00:02:52 +0000 UTCI will break this down in a video.
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"Addressed to the executives of HYBE.
On April 3, 2024, ADOR forwarded a request to HYBE / BeLift Lab, demanding a statement and correction over the issue of ILLIT copying NewJeans, thereby damaging NewJeans' brand value.
The issue of ILLIT copying NewJeans is but one of a vast number of issues between NewJeans and HYBE which occurred over the years. Finding the discrimination, mistreatment, and interference committed against NewJeans by HYBE to be at an unbearable point, the legal representatives of NewJeans pleaded with ADOR to contact HYBE and correct these issues. As a result, as the management company of NewJeans, ADOR offers the following statement on behalf of the group's legal representatives.
An email involving the earlier issue of copying was sent to both BeLift Lab and HYBE. However, BeLift Lab has yet to respond with any answer other than that it is currently preparing a statement, and HYBE has yet to respond at all. We are waiting for HYBE's answer. Not only the earlier issue, but the contents of this email as well concerns more than just ADOR / NewJeans; these issues deal with the ethical and sustainable management practices of HYBE more broadly, and so we forward this statement to the executives of HYBE.
The biggest problem with HYBE is that it is imitating all of the outdated, ill customs of this industry with no acknowledgement of the immorality of these practices. It refuses to fulfill its full responsibilities as a representative company in the entertainment industry, and its management system lacks transparency to the point that direct and indirect damages against NewJeans continue to build up each day.
1. The most representative example is HYBE's 'advanced purchase' tactic.
'Advanced purchases' are when companies inflate the sales of an album and contribute to 'first-week sales' records by placing bulk orders of albums in advance with distributors and foreign labels, then fill the quota through fan events.
This creates false records and makes it seem as if a group that is no longer growing is continuously growing, disturbing the practices of a fair market.
The harmful impacts of this tactic on the stock market are even more severe, seriously exaggerating a company's and/or an industry's potential for growth and prospects.
These tactics have already drawn strong criticism from the public as a tactic that deceives shareholders, employees, the market, and fans. If these tactics continue, it will eventually dry out the entertainment industry from its roots. And to see HYBE, a leader in the entertainment industry, participating in these 'advanced purchase' tactics while taking advance of a blind spot in current regulations, it must be said that this is a serious problem.
NewJeans previously received an offer to use this 'advanced purchase' tactic.
HYBE suggested the tactic of 'advanced purchasing' 100,000 albums. The company insisted that upon the release of 'Get Up', NewJeans would be able to beat aespa in first-week sales with this tactic. However, this clearly violates ADOR's business philosophy, so the suggestion was turned down.
The primary reason that ADOR turned this suggestion down was that participating in such an act would mean degrading the pure records and #1 achievements that NewJeans has fulfilled until now, and that it would lead to diminished opportunities for collaboration with various partner businesses.
If this issue of 'advanced purchases' garners greater attention from the public, it could lead to people misunderstanding that NewJeans uses this tactic, just because NewJeans is affiliated with HYBE. As a result, ADOR intends on preventing any misunderstandings from arising, because NewJeans does not use sneaky schemes for achieve results. Even without such tactics, NewJeans has achieved outstanding results, so to have anyone undervalue these achievements is in itself severe mockery.
It would be a serious problem if the belief that musicians can succeed without cheating, with music and performance alone, were shattered because of this issue. It would be an act that undermines the vision of this market.
This tactic was suggested to a group such as NewJeans, who are capable of great results without help from underhanded measures, so we wonder how much the same tactic is being abused by other artists.
It goes to show that HYBE seriously lacks ethical consciousness.
We are well aware of the fact that this tactic is in fact pervasively used in all of the labels under HYBE. Yet, we must request a transparent investigation and proper measures in response to any cases of exchanges negotiated under the condition of future returns, and other exchanges which may be seen as 'advanced purchases'.
2. HYBE suggests that all labels select the best partnerships in distribution, business, and services through fair competition with one another.
However, recently, HYBE signed a 10-year exclusive distribution contract with UMG, which severely limits NewJeans' activities. In the short term, this contract is meant to reduce the cost of distribution fees, but in truth, it is irrational for a rapidly growing artist like NewJeans to distribute exclusively through one distributor for such a long period as 10 years. The HYBE-UMG contract has cut off NewJeans from any opportunities to seek distribution partners whom NewJeans might be able to negotiate better fees and conditions.
Not to mention, even if the distribution fee was reduced, from the perspective of the label, we pay almost the same amount in distribution fees to HYBE on top of the fee paid to UMG, so we can't help but feel that it is deception. No matter what outstanding results NewJeans achieve in the future, they must continue to pay hefty distribution fees for the next 10 years.
Furthermore, the services provided by UMG and affiliated companies do not meet the expectations of ADOR.
For the next 10 years, ADOR must distribute through UMG even if the distributor fails to improve its subpar services. This long term contract presents no incentives for UMG to improve the quality of its services and further interferes in NewJeans' competitive power overseas.
We have no doubt that NewJeans was a good card to play during the negotiation with UMG. And yet, NewJeans reaped no benefits from this deal.
3. HYBE does not prioritize the advancement of its label management system, when this should be it's main job.
Currently, all labels under HYBE must work with HYBE for merchandise production, performance production, advertisement contracts, and distribution contracts, regardless of the quality of the services offered.
On several occasions, ADOR felt that HYBE's capabilities did not meet ADOR's expectations, and so to produce higher quality performances, advertisements, and merchandise, ADOR had no choice but to seek our resources from the outside. But working out the kinks with HYBE's internal forces was no easy matter either.
For example, thanks to the explosive popularity NewJeans experienced immediately after debut, advertisement offers flooded in to the point that NewJeans did not need to promote themselves separately in order to secure advertisement deals. However, due to problems caused by HBYE's brand synergy department, in charge of advertisement contracts, the label and the advertisers were often forced to deal with unnecessary conflict.
Each time, ADOR raised an issue, but saw no improvements, until eventually, a grave mistake occurred. An overseas luxury brand, which had approached NewJeans for an endorsement deal, ran into contradictions when LE SSERAFIM approached them for a new deal, and during this process, HYBE brand synergy team lied to both ADOR and the overseas brand.
The brand synergy team should be treating ADOR and Source Music equally. However, the team seemed to be biased toward one artist over the other, and even then, it was only after ADOR's complaint that the contract was fulfilled after a refund was processed for a 3-month period.
Of course, it was the label that had to clean up the misunderstandings with the advertiser in person.
In 2023, NewJeans achieved unprecedented results in just under 2 years, results never-before-seen in the roughly 30-year history of the entertainment industry. And yet, HYBE's public relations department rarely made attempts to publicize the overwhelming achievements of NewJeans. Rather, ADOR often had to ask for corrections to press releases, after discovering biased wording in the script."
Comments
BTS Boomer
This is just another smear campaign with no evidence. Itโs really sad that legally sheโs allowed to do this, she shouldnโt be able to even submit anything w/o evidence. Whatโs even more disappointing is that a lot of Armies are falling for it. Narcissistic master manipulator and her attorney should feel ashamed down right pathetic
Charlotte Keith
Agree wholeheartedly. HYBE drives that point home in their response by repeatedly talking about the networking they've built up with giant overseas corporations, which is what enabled NJ to get as much promotion and visibility as they have. I'm so glad they brought it up. They really don't take prisoners and it's pretty cool seeing it in action.
Becca L
In 2023, NewJeans achieved unprecedented results in just under 2 years, results never-before-seen in the roughly 30-year history of the entertainment industry ๐คAmazing what benefits having all the resources of Hybe can bring you... all due respect to the girls but they would have been nothing without Hybe investing in them, can you imagine them having to struggle the way BTS did... Min Hee Jin was handed success on a silver plater... best writers, producers, stylists, videos, etc, etc, etc... Someone get a gag order for this woman. ๐ BTS and PD Bang built a Conglomerate out of sheer blood sweat and tears.
