* Original article is in black, my explanation is in blue
Prior to late 2008, DBSK’s contract states that no member will earn any profit off of any album that sells less than 500,000 copies. Despite their success and consumption throughout Asia at the time of release, none of DBSK’s albums have hit that 500,000 mark. Therefore, prior to July of 2008, DBSK members have earned nothing off of sales from their first album in 2004 to their most recent Korean album in 2008, as well as the numerous albums and singles in between
Yes it is true, and this was explained in this post. Unless you sell millions of copies, you just don't make meaningful amount of money from albums sales, and prior to 2008, TVXQ's album sales wasn't that high. Purple Line single sold less than 50K, and T(best selling Japanese album) sold around 160K in Japan. There's not much profit to take from that number, and most of the singles/albums sold probably lost money.
On July 1st, 2008, DBSK’s contract was modified so that each member would receive 1% of profit for every album that sold over 200,000 copies. Anything below that would earn them 0%-0.6%. Despite this modification, however, SM has failed to follow through with this policy, therefore leaving the members with a 0% profit, regardless.
Not true. This is a great example of twisting the info to make the contract look bad. First of all, the contract was modified in Feb of 2009 with the new rates, not on July 1st 2008. The contract states that the new rate was set on the 5th modification, and the court ruling shows that the 5th and final modification to the contract was done on Feb 2009. Why does that article show July 2008? The contract specifies that the new rate was RETROACTIVELY applied from July 1, 2008. Why do you think the retroactive date was set to that date? That was to apply the new rate for the Mirotic album, which sold about 500K. Either TVXQ requested it or SM voluntarily decided to apply the better rate retroactively to reward TVXQ, and either way, it shows that SM is not greedy, and is open to changes.
The article also states that each member receives 1% of PROFIT which is a total LIE. They receive 1% from the SALES. There's a huge difference between profit and sales.
The article also fails to explain why the profit with the new rate wasn't paid, same way the other article I debunked omitted the info. According to the court testimony, SM requested JYJ to come in to the office, so the documents and receipts can be checked and the accounting verified for the 2009 activities. I don't think anyone can blame SM for that request since JYJ sued the company for the distribution of the profit, but JYJ didn't do that yet. JYJ lawyer's excuse was because they didn't want to incur the cost of hiring an accountant (really?), and that's also from the court testimony. Now you know why JYJ didn't get paid for the 2009 activities. Since the new rate amended in 2009 is retroactively applied to the Mirotic album, one can easily see that wasn't accounted for either.
In sum, DBSK members have earned 0% of any revenue earned off of the sale of all of their albums and singles prior to 2008, and SM has therefore kept 95%+ of all DBSK album-generated profit since their debut."
Another Lie. SM didn't keep 95%+. Again, that percentage is from the SALES, so SM still needs to deduct all the costs to related to album sales (manufacture, promote, distribute etc), and it's not cheap. This is also explained in this post.
Because there are so many articles like the one above (and the one in this post), SME is needlessly bashed around by the fans who doesn't have access to the real information.
Why are there so many negative news articles/report towards SM floating around the net? Those articles look like they were written on purpose to make the contract look bad, don't they? I can post about that too, but it's going to be covered in distant future because there are other subjects that are more urgent.
I just realized the article uses DBSK, and I used TVXQ in my explanation...just saying.