Industry disputes ignite debate over music Master Rights

The conversation surrounding Master Rights has recently resurfaced following a public dispute between Big Naughty and Swings, reigniting a long-standing tension between artists and labels. This exchange has served as a catalyst for a deeper look into the structural conflicts that define the music industry. To understand the friction, one must first distinguish between the two pillars of music rights: compositional copyright, held by songwriters and lyricists, and Neighboring Rights, held by performers and producers. At the heart of this conflict lies the Master Rights, or Masters—the producer's right that grants total authority over a musical recording. These rights carry immense weight primarily due to their overwhelming share of revenue. According to data from the Ministry of Culture, Sports and Tourism, out of 100% of streaming revenue (excluding the platform's cut), Master Rights account for a staggering 48.3%. This significantly dwarfs the 10.5% allocated to songwriters and the 6.2% given to performers.

A sharp divide exists between industry practices in South Korea and the United States, largely driven by the scale and stability of their respective domestic markets. In the United States, the vastness of the industry allows labels to treat artists as equal partners, leading to stronger protections for an artist's long-term rights. In contrast, the South Korean model, famously established by Lee Soo Man at SM Entertainment, views artists primarily as Intellectual Property (IP) cultivated through corporate investment. Because labels bear all training and promotional costs from the trainee years, it has become the industry standard for Master Rights to be viewed as the company's exclusive property. This approach persists even among domestic indie labels, partly because the South Korean market lacks a high frequency of "superstar" indie artists who possess the negotiation leverage found in the West.

Furthermore, the persistence of these label-centric contracts is often a matter of survival. Even with a high share of revenue, many South Korean labels - particularly those focusing on genres outside of K-POP - frequently face bankruptcy due to a weak domestic consumption base. Industry experts argue that for diverse musical genres to survive in such a fragile ecosystem, structures that favor the label are often maintained as a defensive necessity. However, this creates a structural vulnerability where artists lose their primary revenue streams the moment their exclusive contracts expire. While the South Korean government revised the standard exclusive contract in 2024 to introduce a royalty culture more aligned with global standards, these efforts are still in their nascent stages. Establishing a healthy partnership between creators and investors remains a vital task for the industry to sustain its global influence while ensuring fair profit distribution.