🔗 [Exclusive] Min Hee-jin’s ‘Whistleblowing’ Was About HYBE’s ‘Album Pushing’

To the Esteemed HYBE Management,

On April 3, 2024, ADOR Inc. demanded a statement of position and corrective measures from HYBE Inc. / BELIFT LAB Inc. regarding the damage to NewJeans’ brand value caused by the ILLIT plagiarism controversy.

The ILLIT plagiarism controversy is merely a small fraction of the issues between NewJeans and HYBE that have surfaced. NewJeans’ legal guardians have earnestly requested that ADOR demand corrections from HYBE, stating that the various obstructive acts and discriminatory and unfair treatment that HYBE has inflicted on NewJeans have reached such a severe level that it is absolutely intolerable. Accordingly, ADOR, which is responsible for NewJeans’ management, hereby conveys the positions of NewJeans’ legal guardians and ADOR as follows.

Although the previous email was sent to HYBE including BELIFT LAB, BELIFT LAB has only provided a response saying they are preparing a reply, and HYBE has yet to provide a clear response. NewJeans’ legal guardians and ADOR are awaiting HYBE’s response. We are sending this to HYBE management because the content we wish to convey through this email, as well as the previous one, is not limited to ADOR/NewJeans but concerns HYBE’s ethical management and sustainable management.

HYBE’s major problem is that it continues unethical practices without any critical awareness while perpetuating the ills of the existing industry. It is not fulfilling its social responsibilities as a leading company in the entertainment industry, and its governance structure is not transparent, which is causing direct and indirect harm to NewJeans to continue increasing.

1. The most representative example is HYBE’s ‘album pushing.’

‘Album pushing’ refers to unfair practices of artificially inflating the first week sales figures, known as ‘first-week sales,’ by placing large orders through distributors or overseas subsidiaries, or hastily organizing fan events to inflate sales numbers.

This is an act of sending false information about an artist’s performance—making teams that are no longer growing appear as if they are still growing, or exaggerating project results beyond reality—thus disrupting fair market order.

The impact of album pushing on the stock market is particularly serious, as it not only inflates numbers but seriously distorts the growth potential and future of companies and the entertainment industry.

This is an act of deceiving shareholders, employees, capital markets, and fandoms, and has already received strong criticism from public opinion. If such practices continue, they will ultimately become an unwholesome matter that destroys the entertainment industry ecosystem from its roots. Nevertheless, the fact that HYBE, which claims to be an industry leader, is engaging in album pushing by exploiting regulatory blind spots is truly a serious problem.

NewJeans was encouraged by HYBE to engage in ‘album pushing.’

During the release of NewJeans’ 2nd EP ‘Get Up,’ HYBE encouraged them to push 100,000 copies, saying they could beat aespa’s first-week sales record, but ADOR firmly refused because it violated ADOR’s business philosophy.

ADOR refused because we were concerned that the pure #1 records NewJeans had achieved without album pushing could be tarnished, and that the various business opportunities that had arisen as a result could be compromised. For reference, when the album pushing issue was raised in communities, NewJeans’ legal guardians inquired with ADOR about this matter, and ADOR confirmed that NewJeans does not engage in album pushing.

If the ‘album pushing’ issue receives greater public attention as a bigger problem in the future, NewJeans, who firmly refused album pushing, could be misunderstood as having packaged their achievements through ‘album pushing’ simply because they are part of HYBE. Therefore, ADOR, which has management responsibility for NewJeans, seeks to prevent a situation where not only album sales but all the painstaking efforts ADOR/NewJeans have made to grow without tricks are entirely denied. The fact that NewJeans’ performance is outstanding even without ‘album pushing’ yet they are not receiving full recognition for that value is already serious harm to NewJeans.

Above all, the biggest problem is that the belief that one can succeed purely through music and performance/content without resorting to expedients could be shattered. This is something that breaks the vision and hope of the market.

We hope the perception that ‘only fools don’t do it’ will no longer spread.

If HYBE encouraged even groups like NewJeans, who have high album sales without ‘album pushing,’ to push albums by saying they could surpass other groups’ records, what must have happened with other groups?

This can only be described as demonstrating HYBE’s serious lack of ethical awareness.

We strongly urge improvement and prompt correction of HYBE’s duplicitous attitude, given that HYBE has criticized the irrationalities and contradictions of the existing entertainment industry and claimed to aim for the advancement of the entertainment industry.

We understand this is already prevalent within HYBE labels, but we once again request that you rigorously investigate whether there have been transactions with subsidiaries on return conditions, as well as whether there have been any transactions that could be seen as ‘album pushing,’ and handle them transparently and strictly.

2. HYBE is restricting labels’ opportunities to select the best partners through fair competition in all business areas except production, including distribution, business operations, and management.

The recent 10-year exclusive album/music distribution contract signed between HYBE and UMG is obstructing NewJeans’ future work. While they say distribution fees can be lowered in the short term, it is not reasonable to bind a rapidly growing artist like NewJeans to deal with only a specific label for such a long period of 10 years. It would be reasonable to induce competition among companies through short contract periods to secure the best terms, but due to the HYBE-UMG contract, NewJeans’ opportunity to find labels that could offer even lower distribution fees or better conditions for NewJeans has been fundamentally blocked.

Moreover, even if distribution fees have been lowered, labels pay internal distribution fees to HYBE at almost the same scale as the external fees paid to UMG, so from the label’s perspective, it is essentially robbing Peter to pay Paul. No matter how good the results achieved in the future, having to pay substantial distribution fees for the next 10 years is not at all reasonable for NewJeans.

The problem does not end here. An even bigger problem is that the level of service provided by UMG’s subsidiary labels is not high, and satisfaction with them is also not high.

This is a complaint shared by all labels within HYBE, not just ADOR.

In other words, for the next 10 years, due to this contract, we have no choice but to use UMG subsidiary labels even if their unsatisfactory service does not improve. Therefore, such long-term contracts not only diminish the motivation for UMG subsidiary labels to improve their service, which is already a serious problem, but also constitute significant business obstruction that weakens ADOR/NewJeans’ overseas competitiveness.

The long-term contract between HYBE and UMG is more harmful than beneficial to NewJeans, and it is unfair that labels and artists must bear the risks entirely.

During contract negotiations with UMG, NewJeans must have been a good card for HYBE to leverage in negotiations, so we cannot help but question what level of service and benefits NewJeans actually obtained from HYBE.

3. A major problem is that HYBE is not prioritizing the improvement and advancement of its core business of label operations.

HYBE is currently pressuring labels to conduct various businesses with HYBE, including authority over concerts and merchandise, as well as agency authority over advertising and album/music distribution, regardless of the capabilities or service quality of HYBE’s business organization.

However, whether the business operator is an internal affiliate or an external company is not very important from the label’s perspective. This is because labels place the most importance on the business operator’s ability to execute business.

Having experienced through several instances that HYBE’s business execution capabilities did not meet ADOR’s expectations, ADOR naturally had to secure its own resources for concerts, advertising, and merchandise business while seeking other external partners for better results. However, the process of ending relationships with existing internal business operators was not easy from the start.

For example, in the case of advertising business, NewJeans was in a situation where various advertising proposals were flooding in from outside due to high buzz from debut, so they only needed to manage advertisers who came in voluntarily without artificial advertising sales. However, problems caused by the Brand Synergy Business Team, which was in charge of advertising business, led to frequent unnecessary disputes with not only advertisers but also labels.

ADOR raised issues multiple times whenever such situations occurred. However, improvements were not made through these complaints, and it was only after a fatal incident occurred that the matter could barely be resolved. A conflict of interest arose in the process of pursuing a new contract between LE SSERAFIM and an overseas luxury brand that was under contract with NewJeans, and it was revealed that the Brand Synergy Business Team had concluded the contract by telling different lies to both ADOR and the brand.

It is natural for the Brand Synergy Business Team to treat each label, ADOR and Source Music, equally. However, the Brand Synergy Business Team showed biased work handling toward specific artists, and only after such circumstances were revealed did they accept ADOR’s protests and return three months’ worth of agency fees to conclude the contract.

In that process, the unnecessary work of directly meeting with the brand to determine the facts and argue the case was also entirely the label’s responsibility.

Even though we paid the same fee rate as external business operators and experienced clear grounds for contract termination through unjust treatment, the contract termination process was not smooth because they were an internal business team of an affiliate company. Rather, after termination, we had to hear baseless rumors within the company that ADOR was a difficult label.

Even though we judged that external business operators were needed for competitive concerts and merchandise business and proceeded while following regulations and procedures, there were instances where we were unnecessarily warned and pressured as if conducting external transactions violated HYBE’s internal regulations.

If the quality of HYBE’s infrastructure is deemed insufficient, the urgent priority should naturally be to enhance the competitiveness of those business execution entities. However, rather than finding ways to boost and improve the competitiveness of business operators, HYBE is managing labels’ performance indicators only with consolidated revenue, a metric favorable to HYBE’s size expansion.

The problem of unfocused management that cannot concentrate on the core business is also evident in the performance of HYBE’s new corporations.

In 2021, HYBE acquired Ithaca Holdings for the astronomical sum of 1 trillion won, but since then, HYBE’s global business has not shown results. Businesses such as platforms, games, voice AI, and blockchain have also received large investments of capital and personnel but are showing sluggish results.

As can be seen from the 2023 business report, the results of new businesses such as HYBE America (-142.4 billion won), HYBE UMG LLC (-23.4 billion won), Weverse (-4.4 billion won), HYBE IM (-20.9 billion won), Supertone (-6.7 billion won), and Bighit Binary Korea (-3.8 billion won) are all recording negative figures, which is utterly dismal.

Despite serious losses continuing from subsidiary businesses rather than the essential core business, HYBE’s 2023 performance report was busy adjusting for these failing businesses.

The foundation of the entertainment business lies in the label business that nurtures and manages artists.

In 2023, NewJeans achieved unprecedented performance growth unseen in 30 years of entertainment industry history, in less than 2 years. However, such overwhelming growth of NewJeans was not even mentioned in IR/press releases. There was even an incident where we discovered and corrected biased IR script content.

Why does this keep happening only to NewJeans?

4. Improvement of HYBE’s Shared Services supporting ADOR/NewJeans is desperately needed.

As emphasized earlier, the essence of the entertainment business is the label business, and HYBE’s proper role is to help the label business flourish.

HYBE’s Shared Services are currently missing the essence without understanding the multi-label system. Shared Services in a multi-label system should not become support organizations that simply perform common functions according to instructions, pursuing military-style efficiency.

ADOR pays HYBE an amount equivalent to ‘ADOR’s total personnel costs’ annually as service fees for legal, HR, finance, PR, IT, and other services. However, despite the need for efforts to support rapidly growing businesses and improve production and operations, the labels’ satisfaction with the services HYBE provides is low relative to the high fees.

Even though support that sensitively considers the labels’ and artists’ perspectives is needed given the different conditions and growth trajectories that inevitably vary by label/artist, as with the cases mentioned in Section 3, HYBE is not maintaining a balanced attitude between HYBE and labels, or between one label and another.

As everyone knows, NewJeans achieved exceptional success immediately after debut. However, despite only needing to report this success story as it was, HYBE PR maintained a lukewarm attitude. We raised objections multiple times about HYBE PR’s attitude, but this attitude persisted and was also found in IR/PR scripts. There were even cases where foreign media and domestic reporters directly contacted ADOR, saying ‘HYBE’s PR team seems passive about NewJeans PR compared to other HYBE artists,’ and directly requested related materials.

Additionally, the ‘Industry Trend Review’ document circulated internally every week by Weverse Magazine Editor-in-Chief Kang Myung-seok contained persistently biased and prejudiced content, and ADOR has raised objections saying ‘facts such as figures or indicators need to be stated, and at least minimal objectivity should be maintained.’

We also raised objections to CEO Park Ji-won, but received feedback of ‘Don’t read it,’ and from CHRO Kim Joo-young, ‘Think of it as one individual’s opinion.’ We do not understand why content from an individual lacking objectivity and credibility should be distributed to company-wide executives as if it has representativeness, and suspicions even arise as to whether it was distributed for a kind of purposeful propaganda/dissemination due to the bias of its content.

Considering the impact and ripple effects that one individual’s errors in market judgment could have on those who transferred from other industries and are unfamiliar with the entertainment industry, it is difficult to simply ignore and dismiss it as a trivial matter.

However, we have heard that even in recent documents, regarding the ILLIT plagiarism controversy, the self-consoling attitude of ignoring negative reactions and selectively reviewing only desired reactions still continues. ADOR has already requested to be removed from the distribution list, but having recently received the content from other recipients, we were able to confirm that we were not the only ones who did not agree with the reviews.

Not long ago, NewJeans distributed the unprecedented news that their first concert in Japan would be held at Tokyo Dome.

However, coincidentally, HYBE distributed news of the UMG distribution contract signing on the same date and time and announced this as good news. NewJeans’ legal guardians, upon seeing these articles, inquired with ADOR as follows:

“Doesn’t HYBE’s PR team have the ability to distribute and control all articles from the desk? If the UMG matter is good news, it would be common sense and more beneficial for HYBE to promote it separately from NewJeans’ big news to show consecutive positive news. At a time when it would not be enough to focus on NewJeans announcing a long-awaited comeback and promote the big news of being the fastest to enter Tokyo Dome, for what reason did HYBE deliberately overlap the distribution to promote the greatness of the UMG contract article?”

Even if the dates happened to overlap by coincidence, the reason for HYBE PR’s existence is to collect and organize all news, consult and coordinate, and find ways to maximize mutual benefits.

In particular, this stands in stark contrast to HYBE’s blatant support for ILLIT, going so far as to express consideration by deliberately grouping them with the modifier ‘HYBE’s youngest daughter’ when promoting, even though they are under a different label from NewJeans and are a team with a higher average age.

When we asked the CCO about the ILLIT plagiarism incident,

The response was, “There were talks about plagiarism before debut, but after the official debut with stage and music releases, we see the controversy as having subsided.”

It is a well-known fact that plagiarism controversy arose and became a widely discussed issue. And setting aside whether it was plagiarism or not, there is a clearly victimized label that has been caught up in unnecessary noise issues within the same company.

What is surprising is that even the executive with the heavy responsibility of overseeing HYBE PR is nonchalantly conveying opinions biased toward a specific label to the victimized label.

HYBE seems to need to realize the very obvious principle that ‘the fact that plagiarism controversy was discussed and became an issue is itself a problem,’ and that there is a party that ‘was harmed’ as a result.

5. What are HYBE’s principles of management ethics? NewJeans’ legal guardians and ADOR ask HYBE.

Is it HYBE’s attitude, which protested against the long-standing injustices of the entertainment industry at the time of founding, to freely take from successful subsidiaries, emphasize being one company only when convenient, associate without the other party’s consent for marketing, and maintain a brazen attitude of transparent deception?

If they were truly confident in their music, why did they need to imitate NewJeans’ concept, need NewJeans’ choreography, and use NewJeans’ buzz? Why can they not compete fairly with only their own work? Can they be happy with results obtained in such ways?

NewJeans was such a huge success that the term ‘NewJeans Syndrome’ was coined, changing K-pop trends, and as a result, the trend in music production also greatly shifted from the existing girl crush style to the easy-listening genre represented by the so-called ‘NewJeans style.’ This greatly contributed to HYBE’s corporate image as well as its stock price with titles of market leadership and multi-label success. Rookies who debuted after NewJeans, regardless of gender, were influenced by NewJeans, and HYBE joined that trend to a problematic degree.

For what reason is HYBE, far from protecting ADOR/NewJeans who changed and led the K-pop trend, creating the causes and factors for obstructing NewJeans’ activities as the parent company?

Why do organizations and people who made no contribution to creating NewJeans’ unique identity use NewJeans’ work carelessly as if it were public property, and harm the carefully built image of NewJeans by treating it as something common?

HYBE mobilized NewJeans, the most spotlighted and popular team, to boost buzz for ILLIT’s non-existent recognition, generating mention volume through comparison/contrast and exhausting their image. Not satisfied with that, they damaged NewJeans’ value reputation by even exploiting the reverse reaction of ‘See, it’s different’ in a brazen reversal.

It has been confirmed through this incident that HYBE has no concept of artist RM, nor the basic concept of balanced treatment of affiliated creators/artists.

We are bewildered that this happened not at another company but at the parent company, and we ask how ADOR/NewJeans can be compensated for the damage already suffered.

NewJeans’ legal guardians and ADOR hold HYBE responsible for unnecessarily exhausting and exploiting NewJeans’ value, far from showing consideration for NewJeans, and demand realistic corrections to the matters contained in this letter.

Additionally, we request a complete revision of ILLIT’s marketing direction and concept.

In 2019, Chairman Bang Si-hyuk said he had long admired Min Hee-jin’s creative work and was proposing recruitment with the heart of a successful fan—was this ultimately derived from the expectation that he could easily plagiarize and utilize Min Hee-jin’s creative work?

The unilateral change/notification of plans for HYBE’s first girl group before LE SSERAFIM’s debut was already a rude and irresponsible incident, but not content with that, there are still conversation records where CEO Park Ji-won pleaded with Min Hee-jin not to promote ‘Min Hee-jin’s girl group’ until LE SSERAFIM’s debut. We understand this was at Chairman Bang Si-hyuk’s request.

HYBE has not changed since that time when they made the bizarre and incomprehensible demand not to promote NewJeans for the nonsensical reason that if they revealed all members were rookies, ‘it would clearly reveal what kind of team Min Hee-jin is preparing.’

Externally, HYBE promotes the multi-label system and appears to be operating reasonably, but looking back at the time of ADOR’s establishment, this is also not true to the facts.

Min Hee-jin was unilaterally notified of debut plans changed by HYBE from Source Music.

The content was that LE SSERAFIM would become HYBE’s first girl group, and the debut lineup trainees at the time would become Source Music’s next team. The debut lineup trainees at that time were the trainee team that included the current NewJeans members.

In a situation where it would not have been enough for HYBE to apologize for breaking its promise first and unilaterally changing the debut timing and voluntarily propose establishing a separate label, they said they would become Source Music’s next team.

Despite using Min Hee-jin for the public announcement of HYBE’s first girl group and contracting trainees based on that promotion, HYBE easily broke its promise like an old pair of shoes. At that time, current ADOR executives and employees, including Min Hee-jin, felt great disillusionment and wanted to resign. However, we did not want to be perceived as irresponsible promise-breakers to the public and the remaining trainees.

At that time, we explained this intention to CEO Park Ji-won and conveyed our proposal to establish ADOR and plan a separate debut.

Was the ADOR establishment process a willingly smooth and easy process?

Looking back at various past incidents, we cannot help but think that there are no people around Chairman Bang Si-hyuk who give frank advice, to the extent that even industry trends that should be objectively faced are reported with biased descriptions.

It seems that the failure to correct the nonsensical demand from 3 years ago has continued and recurred as the current problem, so we want to speak clearly this time.

Not only ILLIT, but LE SSERAFIM has also suffered from unending plagiarism controversies regarding the concepts and songs of albums released on three occasions. We have heard from overseas producers and related parties working with ADOR that LE SSERAFIM’s songs are in cost negotiations with HYBE over plagiarism issues.

We believe this is a time when reflection and improvement are more desperately needed than ever.

We have seen news that HYBE may soon be designated as a large business group.

We hope HYBE will not imitate the bad aspects of large corporations but instead seek ways to practice ESG management befitting its status. And we hope they will finally feel responsibility for the multi-label system they have actively promoted externally and set improvement and future-oriented goals and put them into practice.

We propose this trusting Chairman Bang Si-hyuk’s advice that he has preached internally and externally: “When facing injustices and irrationalities in the industry, we must voice dissent even if it is difficult to say and make corrections.”

We hope HYBE will not make the mistake of applying anachronistic logic such as ‘What benefits the parent company ultimately benefits the subsidiaries’ and ‘If the results are good, the process is beautified’ to K-pop, which leads the global entertainment industry, and the cultural arts business.

Such thinking rationalizes old-fashioned practices and bad customs of favoring specific individuals and organizations like ‘military soccer,’ ultimately slowing and disintegrating the organization and furthermore devastating the entire entertainment industry.

If you created a multi-label system for diversity and risk distribution, make them ‘different.’ And create a healthy business environment.

There is no need to go as far as respect for creators. Even for the rights and interests of shareholders, it is not sensible for a company based on creation to mass-produce copycats.

Business-wise, it is a foolish act of self-harm that ultimately loses both, a shortsighted approach.

In the online town hall message that Chairman Bang Si-hyuk distributed company-wide at the time of HYBE’s listing, there was this content:

“My fundamental philosophy regarding company management has remained unchanged. It is to contribute to creating a better world by ultimately being based on common sense and striving to solve the problems necessary to implement that common sense.”

“It will be an opportunity to achieve advanced management by increasing the company’s management soundness and transparency.”

Currently, HYBE appears to desperately need to practice ethical management in all aspects of creation and management more than ever.

As Chairman Bang Si-hyuk said, we hope you will make efforts to solve the problems currently facing you.

We hope HYBE becomes sensible, sound, and transparent.

Please respond by April 23, 2024 to the matters that NewJeans’ legal guardians and ADOR have urged to be corrected.