Structure of an Exclusive Management Agreement for a K-Pop Artist (Standard Form Contract)

Posted by Joseph Hwang Joseph Hwang 7/04/2024

Structure of an Exclusive Management Agreement for a K-Pop Artist (Standard Form Contract) - Part 5.

Joseph Hwang

* Attention: This article is based on the latest version of the “Standard Form of Exclusive Contract for Musicians (hereinafter referred to as “SFEC,” Notice No. 2024-0021, Ministry of Culture, Sports and Tourism of the Republic of Korea, amended on June 3, 2024).”

** Contract parties: Artist (hereinafter referred to as “Artist”) and artist management company (hereinafter referred to as “Company”)

***

“Article 4 (Scope and Medium of Popular Culture and Artistic Services)

① The popular culture art service of an ‘Artist (Singer)’ refers to the following activities.

1. Activities as a musician include lyric writing, composing, performing, and singing, broadcasting appearances, commercial appearances, and event presiding incidental thereto.

2. Activities as a performer, such as actor, model, voice actor, TV talent, etc. (However, the scope of the exclusive management of the ‘Company (Promoter)’ shall be separately agreed upon by the ‘Company (Promoter)’ and the ‘Artist (Singer)’)

3. Other activities closely relevant to activities such as items 1 or 2 above or separately agreed upon by the ‘Company (Promoter)’ and the ‘Artist (Singer)’ as creative activities such as literature and art.

② The media for the “Artists’ (Singers’)” popular culture and artistic services shall be as follows.

1. TV (including terrestrial broadcasting, satellite broadcasting, cable TV, IPTV, and other new video media), radio, and communication means utilizing networks such as the Internet

2. Sound recordings, including LPs, CDs, LDPs, MP3s, DVDs, and other media for fixing sound and images, and video recordings, including videotapes, videodiscs, and other digital methods

3. Movies, performances, advertisements, events

4. Posters, still photographs, photo books, newspapers, magazines, books, and other printed materials

5. Businesses or media separately agreed upon by the ‘Company (Promoter)’ and the ‘Artist (Singer),’ such as various businesses or new media utilizing copyrights, publicity (portrait) rights, and characters.

③ Notwithstanding the provisions of Paragraphs 1 and 2, the specific scope of the popular culture art service and the media for the popular culture art service may be determined by the ‘promoter’ and the ‘singer’ in the Supplementary Agreement.”

***

Article 4 of the SFEC defines what activities the Artist belongs to and grants to the Company and how these activities belong to each media and method. This description of Article 4 will be essential to execute and perform the rights and results obtained from this agreement during the contract period after termination. In the past, in K-pop history, there have been frequent disputes between companies and artists after the contract termination. In particular, the brand-new products with the emergence of new media or methods containing the artists’ recordings or performances during the contract period caused by the rapidly progressing development of media technology even after the closing of the contract, and the companies’ business activities relevant to the new products made a few conflicts in the K-pop industry. Some cases were brought to the court. So, the Korean government needed to establish some regulations to solve this problem through the standard contract form and prevent disputes.

One reason the Korean government regulated the scope and media for the artists’ performances and activities in the SFEC was that there were frequent disputes and lawsuits between companies and artists in South Korea in the early and mid-2000s.

The music recording industry has undergone some changes caused by technical development, such as the vinyl to CD or CD to MP3 digital format. The digital revolution created a massive change in the sales method for music to the public. Music production companies and music levels realized the possibility of better and more sales methods for music records using digitization and Internet networking at the time. Digitalizing the music tracks from analog recorded songs on physical disks opened a new world. It’s not to sell a whole music album but to sell each song from the album through the Internet without any physical containers or the new album that all gathered the classified as hit songs from each original album. This was the birth of the compilation album. It was like opening Pandora’s box.

Moreover, the copyright law system in South Korea could not regulate and define licensing and rights transfer in detail, specifically because it could not predict the usage of digitalized music works. Even the world’s governments could not prepare for those changes in the music industry. The relevant case for this phenomenon is the lawsuit between the Artist Eminem and Warner Music in 2009.

Therefore, this clarification to define the scope and media of the Artist’s contracted services to the management company is seriously important. Clarifying this matter is probably the best way to prevent disputes between artists and companies after the termination of the contract.

The point to pay attention to is that the contractors, the Artist, and the Company can redefine the scope of the contract and the Artist’s activities in the Supplementary Agreement of the SFEC. This means that the contractors can expand or reduce the scope and activities separately through the Supplementary Agreement under the SFEC or the other options with both parties’ consent. Most entertainment companies require artists to sign this SFEC with the Supplementary Agreement. Therefore, the most crucial document is this Supplementary Agreement, which belongs to the main contract of SFEC.

If, after the signing of the Supplementary Agreement, the legal effect of the priority should follow the Supplementary Agreement despite the SFEC.

* Standard contract analysis continues in the series.

** References and Quotations:

https://www.mcst.go.kr/kor/s_data/ordinance/instruction/instructionView.jsp?pSeq=2413

https://wiclaw.com/2009/03/13/%EB%94%94%EC%A7%80%ED%84%B8-%EC%9D%8C%EC%9B%90-%EB%8B%A4%EC%9A%B4%EB%A1%9C%EB%93%9C-%EC%88%98%EC%9E%85-%EB%B6%84%EB%B0%B0-%EB%AC%B8%EC%A0%9C-%EC%9D%8C%EB%B0%98%EA%B3%84%EC%95%BD%EC%84%9C-%EC%A1%B0/

https://casenote.kr/%EB%8C%80%EB%B2%95%EC%9B%90/95%EB%8B%A429130

https://www.hankyung.com/article/2004020229648

Series Articles

Overview

https://www.musicbusiness.co.kr/2024/05/structure-of-exclusive-management.html

Part 1.

https://www.musicbusiness.co.kr/2024/05/structure-of-exclusive-management_26.html