“General agencies 20%… Affiliates like SM at 5~6%?”
BigPlanetMade Entertainment has accused Kakao Entertainment (Melon) of unfair practices in music distribution fees, alleging that Kakao Entertainment charges lower fees only to its affiliates.
BigPlanet stated on the 4th that they have discovered Kakao Entertainment’s practice of imposing discriminatory distribution fees between agencies belonging to its affiliates and subsidiaries, and other agencies.
According to BigPlanet, Kakao Entertainment charges general companies around 20% in distribution fees. In contrast, it imposes only 5~6% distribution fees on related companies such as SM Entertainment.
BigPlanet commented, “This difference in distribution fees is a gap that is hard to accept logically,” pointing out that it could lead to maximizing the profits of related companies.
In January, BigPlanet submitted a report and supporting documents to the Fair Trade Commission, indicating that this could constitute unfair trade practices under the Fair Trade Act.
BigPlanet also mentioned, “After detecting the unfair practice, we requested Kakao Entertainment to terminate the distribution contract, but they refused.”
The issue of selective measures by Kakao Entertainment was also highlighted. Around the same time as BigPlanet, another music agency (Company A) had its request for a change in the distribution contract approved.
BigPlanet asserted, “It can be seen that Kakao Entertainment is exercising its dominant market position without a consistent standard, effectively engaging in unfair practices,” and plans to respond strongly.
They added, “There has already been considerable dissatisfaction within the music industry regarding Kakao Entertainment’s use of its superior position to demand excessive distribution fees.”
Finally, “We will seek judgment through the Fair Trade Commission,” stating, “We plan to publicize this issue and take decisive legal action to recover our rightful interests.”
Meanwhile, Kakao Entertainment is known as a giant in the entertainment industry, conducting business in three areas: story, media, and music.
In the music sector, it holds a dominant market share with ‘Melon’ and has labels such as Antenna, EDAM Entertainment, IST Entertainment, and Starship Entertainment.
