As additional records from the initial trials between HYBE Labels and former ADOR CEO Min Hee Jin come to light, more netizens are discovering alarming and infuriating facts about the K-Pop industry's operations.
As for the newly publicized court documents, the texts currently garnering the most attention deal with the touchy issue of K-Pop labels "advance purchasing" the physical albums released by their artists.
First, one item from the court documents stated:
25) August 4, 2023. Management and Planning chief of the Japan branch, BW, to I: 'If BX were to be put in this position, it would certainly be to D's advantage, however, BX would then have to be put in charge of resolving remaining inventories / If BX and BY were to be combined under a whole branch known as Marketing & Production: profit would rise, but it would no longer be possible to advance purchase inventory stocks and the resolution and disposal of remaining inventory will have to be carried out through funds directly from the label."
The above item suggests that HYBE Labels is concerned with the idea of "advance purchases" becoming "no longer possible", meaning that the company frequently used this method to increase album sales.
Next, another item revealed,
"Below is a list of the added inventory items
CA initial stock 150,000, stocks requiring return 100,000, CB 250,000, former items (~100,000) successfully returned, no more inventory.
CC initial stock 160,000, stocks requiring return 70,000, CB 230,000, return of inventory in progress.
CD initial stock 500,000, stocks requiring return 150,000, CB 650,000, return of inventory in progress.
CE initial stock 250,000 , stocks requiring return 200,000, CB 450,000, return of inventory in progress."
This item indicates that as many as 500,000 album copies may have been dispose of, or are in line to be disposed of, by HYBE Labels after filling up the inventories with "advance purchased" albums.
While the concept of K-Pop labels "advance purchasing" albums to increase album sales is not entirely uncommon, many K-netizens criticized HYBE in light of the new information for "returning" significant stock, rather than making sure that the stock is emptied (re-sold to fans) through promotional events (such as fan signs) several months after comebacks.
Some observed, "Isn't that another form of fraud? They're literally fabricating their figures. HYBE artists need to return all their trophies then", "Most of the other companies take months or even a year to empty out their inventories of the albums they advance-purchased. HYBE just returns them and suffers the monetary losses??", "No wonder the company's revenues are so low when their sales are so high", "All their artists bought their trophies and achievements with their own money, basically", "All their artists are sajaegi-artists", "This company is truly the bane of the K-Pop world", and more.
Meanwhile, earlier on February 25 KST, Min Hee Jin proposed the resolution of the ongoing legal dispute between her side and HYBE, offering to give up her shareholder contract put options so that HYBE can focus on regrouping NewJeans.
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