Earlier today we reported details regarding Kara's contract, uncovered by TV report in midst of this very significant controversy. Edaily, a Korean online newspaper, contacted DSP Entertainment today regarding the report; and here is what the group's management company had to say about the allegations against them.
A representative from DSP explained to Edaily through a phone interview today that they paid each members of Kara around 300 million Won per person ($300,000) last year, more than half of which has already been paid during the first half of the year. When questioned why the members were only paid $3,000 this past December, the representative explained that it was based from a promotion with a franchise of a convenience store during August. DSP received 3 million Yen ($40,000) from the deal, and the Kara members each received $3,000 from this according to the representative. So some may be curious on why they were only paid a share of this promotion and not their album and single sales? The representative explained this as well.
He went on to claim that Kara was offered a share of profit that was much higher than the going rate in the Japanese music industry. Japanese artists usually receive only 1% of the total album and single sales, and because DSP believed that this amount was unfair for Kara, they offered to pay the members around 20-30% of DSP's share in the sales. In Japan, the distributor takes 84% of the album/single sales, leaving the management company with the remaining 16%. In DSP's case, they had to split it evenly with Universal Japan, which is Kara's management company in Japan. Hence, DSP was to receive 8% of the total album/single sales, and they would have had to pay only 1/8 of it to Kara members. However, the representative stated that they felt that the amount was unfair for Kara, so they had offered the parents of the members 20-30% of DSP's share, which would be 1.6-2.4% of the total sales, rather than 1%.
Lastly, he stated that the Kara members were supposed to receive the third quarter profits in December, but this couldn't be done because the parents didn't give an answer to their offer.
A lot of information from this interview are contradicting of other reports, mostly the ones that were written in favor of Kara. This interview does give one piece of information that is of value; the fact that dispute most likely started over profit distribution of album and single sales in Japan, and the members' parents were heavily involved in this. Reminds us of another group of the past, doesn't it?
Stay tuned to allkpop for more on this story as it develops.
Source: Edaily via Yahoo! Korea
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