(3 of 3)
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.
