With the growing influence of music streaming companies in the world of music, controversy has arisen that the music charts, which originally reflect public preferences, are being manipulated. A number of marketing companies and new songs by low-profile singers are suddenly ranked at the top of the music chart. Let's find out why these controversies arose and if they are true.
Music real-time chart music hoarding controversy
In article 26 of the Act on the Promotion of the Music Industry, the act of buying records illegally for the purpose of increasing sales of records produced, imported, or distributed is stipulated as music hoarding. , Music hoarding is a phenomenon that only occurs in Korea, which has never occurred elsewhere in the world, and it is thought that it was first started around 2013. The music market in Korea is an oligopoly in which the three companies of Melon, Genie, and Flo have more than 85% of the market share as of 2019. Due to this structure, music hoarding is able to have a significant effect with any song that ranks high on the Melon or Genie chart. Music hoarding is being used not only by music streaming companies but other social media like Youtube, Facebook, Instagram, and blogs. Music hoarding can be a problem because it can lead to distorted information to listeners and reduction of copyright fee income to copyright holders and deprivation of broadcast appearance opportunity to other singers.
Representative cases about music hoarding
The first point that sparks controversy over music hoarding is ‘Viral marketing’. The previously mentioned singers such as Nilo, Shaun, Jang Deok Cheol and Song Ha ye claimed that they never engaged in illegal music hoarding or chart manipulation and they just tried ‘Viral marketing’. ‘Viral marketing’ is the marketing strategy which allows consumers to accept information naturally through social media like Facebook or Instagram and then spread it again quickly through consumer networks. These singers said they just posted promotional videos on Facebook and then their songs started to be known through cover videos, sharing and so on. After that, the ranking began to rise on the music streaming site and this Viral marketing was effective. As in this situation, Viral marketing is used as an excuse to suppress suspicions among the suspected singers. Recently, there has been an example related to viral marketing. Singer Song Ha-Ye released the OST ‘Say goodbye’ in the drama ‘Hotel Deluna,’ which was on the air in August in 2018. However, as soon as this song was released, almost 10 cover songs are posted on Youtube within five minutes and some songs were deleted as the controversy continued.
There is also an example of a singer who has actually been offered music hoarding. Band Sultan of the Disco said they had been directly invited to do music hoarding in the interview with SBS ‘Unanswered Questions’ that was broadcast in January 2020. Sultan of The Disco said they received specific suggestion on how long they are able to maintain their rankings on the music chart and how much it would cost. The business which proposed music hoarding said it will cost about 2~300 million won to make it to the top of the music chart and that the income distribution of copyright fees and music revenue will vary depending on whether the amount is paid in full or in shares with the business. Also, the business that proposed the music hoarding said Sultan’s songs should be ballads or include sad lyrics to appeal to people. However, Sultan of The Disco refused all of these proposal in order to be honest. This interview became a big issue at the time of the broadcast.
Recently, controversy has also been growing over whether or not idol fandom's music streaming is a music hoarding. Before this controversy, idol fandom cultures has existed for a long time. Due to this music hoarding scandal, idol fandom’s ‘full-scale music streaming team’ is also questioned about whether or not it is really music hoarding. ‘Music full-scale attack’ means activities such as collecting money, music streaming, and downloading an idol’s songs voluntarily by selecting members through strict fan certification. Although ‘music full-scale attack team’ has been a settled fandom culture for a long time, some people claim that ‘music full-scale attack’ is the same as music hoarding in that they play songs but don’t listen and just increase the number of times the music is streamed. However, idol fandom complained that what fans do voluntarily and what a company does to make a profit cannot be considered the same.
The reason that suspicions about music hoarding are not revealed
The first reason suspicions of music hoarding are not revealed is the complex distribution and marketing structure of the music industry. Music hoarding is usually commissioned by a singer’s agency to a public relations agency, and the PR agency gives the work to a subcontractor. Also, between PR agency and there subcontractor, there are a lot of brokers involved whose identity cannot be verified. Therefore, it is difficult to find the person in charge and hoarding costs are simply handled as a marketing cost, so there is no trace of manipulation in the accounting books.
Large music streaming companies like Melon know better how music chart mechanisms are formed than anyone else. On the real-time chart of Melon, graph rise curves of controversial singers show a very similar graph rising between 1 and 6 a.m. If there is music hoarding like this, a lot of data will already exist on it, but there is no response of music streaming companies since leaving music hoarding as it is brings more profits to music streaming companies. Revenue of 7 won per stream of Melon-based streaming, where 40% is owned by melon and the remaining 60% is shared by the copyright holder. Because of this music hoarding, more streaming through ghost IDs will result in higher streaming profits. Therefore, music streaming companies such as Melon do not show any improvement.
Problems of music hoarding
The first problem with music hoarding is related to media credibility. Companies that provide music charts have real-time charts on the main site. They focus on increasing revenues by inducing competition and relaying top nominees every five minutes. The more listeners lose credibility about the manipulated chart in the competition between the fake streaming computer itself and the idol fandom, the more the music market shrinks. According to a month-long survey conducted by research company Trend Monitor in December 2019, only 1 out of 4 people (25%) said they trusted the music charts. In particular, young people who are interested in music and who are sensitive to ranking, responded strongly to music hoarding, showing a clear attitude of not trusting the music charts. This means that it can be widely abused in various sectors, such as politics and society like real-time search query manipulation and comment manipulation, and it can reduce confidence in the media as a whole.
Music hoarding also has a problem of personal information leaks. Music hoarding companies sometimes hack personal information such as music streaming site ID and even deal without ID owner’s permission. In November 2019, a consumer of Genie music reported to Genie more than 3600 playback history that he has not listened to. In response, Genie music said that no technical errors have been found and personal information cannot be accessed without permission, and that consumers should contact the police if they suspect hacking. However, this case concluded without finding. This can be a problem because the leakage of personal information can be extended to the leakage of important information such as personal IP or financial information.
Also, music hoarding is making many confusions in the K-pop scene. The agencies of singers such as Vibe, Nilo, Song Ha-Ye, whose real names were mentioned, sued Park Kyung for violating the Information and Communication Network Act, including the publication of false information and defamation in November 2019. In response, Park Kyung said, "I erased the posts on Twitter, but I can't apologize to the singers," and he is currently considering a counterattack against them through the appointment of a lawyer. In addition to this legal battle, music hoarding is a trend that makes singers lose trust with each other and raises suspicions of hoarding for every song that has recently topped the chart. On January 2020, Changmo's track "Meteor" performed well on the music charts and placed top of the Melon and Genie music charts. Some netizens on social media have accused him of music hoarding. In response, Chang-mo responded on Instagram live, "I don't do that to make money. I have never composed music with that thought." He also warned that he will sue netizens for defaming him.
The controversy over music hoarding has resurfaced, and the music industry has been marred by distrust and criticism. So what are some ways to save the music market from music hoarding?
Suggestions for Music streaming market
Some people argue that the abolition of real-time charts that cause inordinate competition may improve the structure of the music market system. They say real-time charts should be abolished, and that the structure of the Billboard chart in the U.S and the Oricon chart in Japan may be an alternative. The Billboard chart in the U.S. is a basic measure of record sales, and the number of songs streamed is measured as a separate number. Japan's Oricon chart gives more meaning to how long a song stays on the chart than the fact that it was ranked at the top. The Billboard chart and Oricon chart are operated independently of record labels, so the chart ranking does not determine the distributor's revenue. This is not a combination of distributors and record labels, like the relationship between Roen Entertainment and Melon in Korea, there is no internal pressure on chart and music ranking. Therefore, there is no need to encourage abnormal competition for the top in the chart like Korea.
Another alternative to improve the music market is a ‘Curator service’. ‘Curator service’ is the service which recommends music that suits personal taste. International companies such as Apple and Spotify provide this service. These overseas curator services are based on the tastes of more than 100 million users through big data. ‘Flo’ is the popular provider of curator services in Korea. There is no real-time chart on Flo’s main site. Instead, the consumers are recommended many songs that suit them by the curator service. Through this curator service, Flo is quickly chasing after Melon’s market share. Rather than real-time charts buried in short-term revenue, focusing on curator service can make a healthy music market that consumers want.
Lastly, improvement measures are needed by relevant laws and the efforts of ministries. Recognizing the seriousness of the problem of music hoarding, the Ministry of Culture, Sports and Tourism set up a project to support the creation of a fair music distribution environment in 2018 and allocated 330 million won in the 2019 budget. The ministry also said that it will continue to prepare manuals for music hoarding and deploy at least two monitoring staff to monitor music hoarding issues at all times. Additionally, the ministry has also decided to receive quarterly data from the music streaming company to proactively review the matter. Kim jak ga, a K-pop music critic said that "The problem is that hoarding and chart manipulation is serious in that it makes the music charts meaningless, the result of an era that reflects the unconscious taste of the public,”. He also mentioned that “as soon as possible, the music streaming company should have the relevant system and self-restraint capabilities.”
The music market is suffering from the controversy over music hoarding. Under these circumstances, both the relevant ministries, singers, and music streaming companies should continue to work to eradicate hoarding and improve the music chart system and the music market.
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