Flying Too High?

12 minute read
Donald Macintyre Seoul

It’s not easy being god. Wherever south Korea’s hottest boy band goes, its members are assailed by heaving, hormonal throngs of teenage girls, all of them aching to rip out a lock of pop idol hair. The house on the outskirts of Seoul shared by the quintet was burgled a year agothe only things missing were socks and underwear purloined from the washing machine. The singers’ work schedule is grueling. God (an acronym for Groove OverDose) this month embarked on a 100-concert tour that, counting a break to cut their fifth album, will last at least six months. Meanwhile, there are endless rounds of TV appearances, talk shows, dance routines, silly comedy skits. Grouses Yoon Kye Sang, the band’s 22-year-old rapper: “We are only tantara“Korean slang that loosely translates as itinerant lounge lizards.

The band members aren’t even allowed to have girlfriends, lest they lose their boy-next-door wholesomeness. But to this list of indignities, add one that could make the others seem genuinely insignificant. South Korea’s star-making machinery that, by cranking out high-gloss acts such as god and femme songstress BoA, has become a regional music-marketing powerhouse rivaling Japan’s, is getting spattered with grime. Last week, government agents arrested two former television producers for accepting under-the-table payments guaranteeing TV appearances to aspiring singers and musicians. According to Seoul District Prosecutor Kim Kyu Hun, the arrests of Hwang Yong Woo and Kim Jong Jin were just the first in a wide-ranging investigation into systemic corruption in South Korea’s music business that threatens to disrupt the careers of some of Asia’s best-loved performers.

Earlier this month, agents descended on the offices of four major entertainment production companiesSidusHQ, god’s management agency; GM Planning; Doremi Music Publishing; and SM Entertainment, the country’s leading production house whose founder, Lee Su Man, is widely credited with turning Korea’s pop music industry into Big Business. Investigators seized documents and computer discs in search of evidence, carting them away in cardboard boxes. At least eight companiesincluding four not yet namedare under suspicion. Kim, the lead prosecutor, says the total amount of bribes being paid by music moguls to executives at major television networks and cable TV stations is “huge.” Industry observers say it runs into millions of dollars’ worth of freebies, company stock and raw cashin one case, wads of bills delivered in shopping bags. “No other industry has so much blatant in-your-face payola,” says a music business insider who spoke on condition of anonymity.

To many, it’s no surprise that glamorous K-pop has an unsavory side. The music industries in Japan and the U.S. have periodically been rocked by bribery scandals. Payoffs offer a time-honored competitive edge; a well-placed bribe to a highly rated radio station or TV program can buy your unknown talent the audience face time needed for superstardom. But this head-start program for precocious singers is illegal. “Our focus is to sever the collusive ties between the TV executives and the production companies,” says Kim.

Few stars are expected to be caught in the net. Members of god have not been implicated. But at least one Korean singeralso not yet namedand her manager have been called for questioning by prosecutors. “If there is something bad, I hope the roots get pulled out,” says Jang Woo Hyuk, singer for boy band J.T.L. “But I hope the investigation doesn’t get overexaggerated.”

It’s hard to imagine a worse p.r. nightmare for Korea’s idolmakers, whose stock-in-trade is bubblegum groups crooning heavily synthesized love ballads to a largely underage audience. The investigation comes at a time when K-pop is on an impressive roll. The $300 million domestic market is the second largest in Asia, topped only by Japan’s massive $2.9 billion in album sales last year. K-pop has broken across borders: teenagers from Tokyo to Taipei swoon over performers such as singer Park Ji Yoon and boy band Shinhwa, buying their CDs and posters and even learning Korean so they can sing along at karaoke. BoA this year became the first solo artist in more than two decades to have a debut single and a debut album reach No. 1 in Japan, according to Oricon magazine, Japan’s leading music guide. “Korea is like the next epicenter of pop culture in Asia,” says Jessica Kam, a vice president for MTV Networks Asia. “It’s the next Japan.”

Music executives have reacted to the crackdown with a mixture of fear and indignationsome say privately they are victims of a government witch-hunt designed to take the heat off the scandal-plagued administration of South Korea’s President Kim Dae Jung. (A government spokesperson said the investigation “has absolutely nothing to do with the Blue House.”) Park Jin Young, one of Korea’s leading songwriters and producers, worries the public might get the wrong idea, saying K-pop “isn’t more polluted than other fields.” Says James Hwang, executive director of Doremi Music Publishing and chairman of the Korea Music Publishers Association: “After Korean companies are killed and foreign companies dominate, what will happen? The politicians don’t think that far.”

While it’s unlikely to shut down the idol factories, the investigation could sap the industry of its vitality. Caught up in the probe is Lee, SM Entertainment’s founder. Sometimes called the man with the Midas touch, Lee was the first to see that Korea’s increasingly affluent teenagers yearned for homegrown idols they could call their own. A former singer himself, he created in 1996 the seminal Korean boy band, H.O.T., still the biggest-selling local group ever with 10 million CDs sold.

Lee’s masterstroke: the industrialization of the starmaking process. When he founded SM Entertainmentwhich is listed on Korea’s KOSDAQ stock marketin 1989, Korea had no real rock ‘n’ roll tradition, no history of struggling garage bands trying to get discovered by sending demo tapes to radio stations and record labels. In other words, Korea had very little musical raw material to work with. Lee helped change that by cloning talent. Sifting through hundreds of raw audition tapes or sometimes picking kids off the street, he put aspiring idols through a rigorous course of singing and dancing that typically lasted two years or longer. With an eye on the Asian market, he added language training. The all-girl trio S.E.S., currently one of Lee’s hottest properties, includes Eugene, who can sing in English, and Shoo, who sings in Japanese. Lee currently has about 70 would-be idols under his wing.

Because of his clout with the media, Lee, who could not be reached for this story, is the starmaker competitors fear most. He’s at the center of a controversy over the alleged exploitation of youthful musicians by production companies that sparked an ongoing investigation by the Korea Fair Trade Commission (see “). H.O.T. fans are among his biggest criticsthey hold him responsible for the breakup of their beloved band last year following a contract dispute with SM Entertainment.

Three band members quit the company in protest, forming a new group, J.T.L. But an executive with the band’s new management company, Yejeon Media, says getting television stations to play its new music video was difficult, despite the group’s large following. The blame fell on Lee, who was accused of blocking the band’s access to the airwaves. Hundreds of teenagers barraged SM Entertainment with angry e-mails; some threw eggs at the company’s headquarters in southern Seoul. On a fan website called HateSuMan, a posting described Lee as a snake who had fallen into a basket full of money. The incident “damaged the band a lot,” says J.T.L. singer Tony An.

The commission is due to release a report on the industry next week. But far more worrisome is the investigation by the prosecutor’s office, which threatens to put everyone’s dirty laundry on public display. Until news of the probe broke, some production company executives freely acknowledged that bribery is considered to be a business expenseeuphemistically called “p.r. fees.” Traditionally, cash is handed over at a meal or in pricey nightclubs where young women serve drinks, chat and sing karaoke with male customers in private rooms. Sometimes an envelope stuffed with money is slipped in beside a cake in a gift box. Some bet big on golf and intentionally lose. In an investigative news program that ran on MBC television in January, an anonymous entertainment company manager described how he borrowed a TV director’s car keys, located the vehicle in a parking lot and left a shopping bag filled with cash next to the driver’s seat. Or you just go out for cocktails with your TV buddies. “Sometimes we spend $3,300 drinking with four or five guys, production directors. I have the receipts right here,” says a music industry insider, tapping his pocket. “Sometimes we don’t have time so we just give them $1,600. We are not proud of it.”

Indeed, with competition in the industry growing fierce, buying exposure for your stable of stars is becoming almost a necessity. The success rate for new acts is low. Perhaps one in 20 make it, but producers have investments to protect. By the time budding superstars are ready to go public, at least $50,000 may have been sunk into their grooming. To have any chance of a return, artists need exposure on radio shows and in the tabloids that cover the entertainment industry. Most important are appearances on the 20 or so entertainment shows run by the big three television networksMBC, KBS and SBSand on a few prime cable music-video shows. The exposure can cost more than $350,000, most of it for television. Producers consider it a bargainthe same amount spent would buy just 10 minutes of prime commercial advertising time, barely enough for three songs.

Getting plugged into the TV circuit is key to pushing your wannabe heartthrobs up the music charts. Run by TV stations, the charts provide a much-watched yardstick to gauge band popularity. But some say the charts are slanted in favor of the stars who make the most small-screen appearancesin Korea, rankings are only partly based on CD sales and fan voting. That makes TV appearances all the more important. “Bribing is marketing,” says an industry official. “With the least amount of money, you get the most effect.”

There is growing sentiment that the music business needs to clean up its act. Money has poured into the market, and too many production companies chase a finite pool of fresh talent. The top idols are still selling a million-plus CDs each time out, but average sales for second-tier artists have slipped by at least 20%. MP3 copying over the Internet is taking a big bite out of total sales, which slipped 9% last year.

Shady business customs could stifle development over the long term, says Lee Sang Ho, the television journalist who produced the MBC K-pop expos. While other Korean industries have been bringing their business practices up to global standards, the pop music industry remains stuck in the past, Lee says. “The main problem is a lack of transparency. This has to be said for the betterment of the Korean mass music industry.” (Ironically, prosecutors have charged a former MBC producer with bribe taking.)

The probe, which has been ongoing for at least three months, seems likely to widen. Kim, the lead agent on the case, says investigators are now looking at the possibility that SM Entertainment violated laws governing the stock market. They suspect that SM Entertainment used its stock exchange listing to curry favor with TV executives, in some cases giving them free shares prior to SM Entertainment’s IPO in April 2000. On the books, the handouts were recorded as sales but the money was never collected, Kim alleges. The company released a statement saying it followed “normal procedures” in its IPO and pointedly denied an allegation that it distributed shares to the wife of a TV executive.

Lee, SM Entertainment’s boss, is in the U.S. until August on business, according to the company. Meanwhile, Kim says at least 10 more television producers and journalists covering the entertainment industry will be brought in for questioning this week. Some suspects are already in hiding or overseas, says Kim. But “we will not stop our investigation until we get to the truth and punish those responsible,” he says. “We are concerned [the investigation] could paralyze the show business industry, so we are going all out to expedite it.”

The stars themselves are just hoping this will all blow over soon. With their managers spending half the time answering questions from prosecutors, or hoping not to be the next one called in, it’s hard to keep a tune going. J.T.L.’s Jang says he’s not sure if the upheaval will really clean things up. “Once your expectations are too high then you can just get more disappointed,” he says. Fellow band member Lee Jae Won declines to discuss the investigation, saying it wouldn’t be wise for a pop star to bad-mouth the industry. “That’s like asking us to dig our own graves,” he says.

For high-profile boy bands like god, the scandal could taint what should be a heavenly ride to the top. If fans begin to doubt the legitimacy of their idols, the pact the industry’s producers seem to have made with capitalism’s darker forces could take the wind out of Asia’s most dynamic music scene. Even an act of god might not save K-pop.

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