Problem

The Fundamental Issue in Music Entertainment & Management: Human Risk

The music entertainment industry operates under two fundamental principles:

1️⃣ Management is an investment-driven industry.

• Money is invested into promising musician IPs.

• The capital helps artists grow.

• Once the artist generates revenue, profits are shared.

2️⃣ Management is guided by emotions and subjectivity.

• Decisions about how much to invest and how to nurture an artist are largely based on personal judgment and intuition, rather than data-driven insights.

The Root of Industry-Wide Problems

Here lies the core issue with the traditional entertainment industry:

💡 Despite being structurally an investment business, the valuation of its assets (artists) and expected returns are assessed emotionally rather than analytically.

This fundamental flaw leads to several systemic challenges:

❌ Lack of external capital investment – Without objective financial valuation, public and institutional investors are hesitant to enter.

❌ A closed and opaque industry – The current entertainment culture is shaped by exclusivity, limiting industry-wide innovation.

❌ Inefficiencies in talent management – Without data-driven decision-making, artist development is inconsistent and often unpredictable.

The entertainment industry, particularly music management, remains highly vulnerable to human risk—subjective decision-making, favoritism, and inefficiencies that hinder sustainable growth.

For the industry to evolve, it must move beyond intuition-driven decision-making and adopt transparent, data-backed investment models. By doing so, entertainment management can unlock new capital, professionalize its structure, and establish long-term sustainability in an increasingly global and digital market. 🚀

The Lack of Transparency in K-POP: A Systemic Issue

The closed nature of the entertainment industry is especially amplified in K-POP, where artists are developed under an intensive, centralized system. Since entertainment agencies hold absolute power, the industry faces a severe lack of transparency, leading to:

• Limited influence from fandom in decision-making

• Unfair contract structure that restrict artists' rights

• Ongoing ethical and human rights concerns

Opaque Financial Structures & Unfair Revenue Distribution

🚨 Artists struggle with persistent issues of opaque financial settlements.

• Revenue breakdowns are often unclear or hidden, making it difficult for artists to understand their actual earnings.

• Unfair revenue splits frequently leave artists with a fraction of what they truly generate.

• Many artists do not receive fair compensation for their creative work, despite their immense contributions to the industry.

Fans: The Unrecognized Driving Force

🔍 Despite their active role, fans receive no tangible benefits.

• Fans are the foundation of an artist’s success, investing their time, money, and energy.

• However, their contributions remain unrecognized and uncompensated—they are passive participants in a system that heavily relies on them.

• Over time, this lack of rewards weakens fan engagement, leading to less participation and reduced long-term loyalty.

The Need for Industry Transformation

K-POP’s global success is undeniable, but its structural flaws prevent it from becoming a truly sustainable industry.

To break free from its transparency issues, the industry must embrace:

✅ Clear, data-driven financial models for revenue distribution

✅ Decentralized decision-making, allowing fandoms and artists more influence

✅ Fair compensation for both artists and fans

By addressing these issues, K-POP can evolve into a more ethical, transparent, and sustainable industry—one where artists, fans, and management thrive together in a fair and mutually beneficial ecosystem. 🚀