A new system put into place by entertainment agencies will now allow artists to make an income as soon as they debut.
Common practice among entertainment companies is to first make back the investment they put into debuting the idol. This situation is the basis for some artists such as EXID receiving paychecks long after their success.
They first reach the BEP (Break Even Point) taking into consideration the training fees, recording, album production and marketing. For example, if all those processes cost the company 1 million dollars, the idol first has to make back 1 million dollars before getting an income.
However, SM Entertainment takes the burden of production fees for their artists while JYP Entertainment takes care of album production fees. YG Entertainment thinks of training fees as an investment and does not expect to earn it back from the artists.
Initiated by JYP Entertainment, artists from the “Big Three” will make an income as soon as they debut. This is true even if they do not reach the Break Even Point.
Source: Instiz
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