MUSIC
K-Pop Industry Calls for Equitable Support for Small Record Producers
In a joint statement released on the 11th, these organizations emphasized the need for equitable support for the music industry, particularly small record producers, to achieve the cultural powerhouse status and realize the K-Initiative. They stated, "K-pop is already a key driver of national competitiveness and cultural sovereignty," and stressed that supporting small producers would lead to mutual growth and sustainable development across the industry.
Currently, certain content sectors like video and webtoons receive production cost tax benefits, but the music industry is excluded. The organizations pointed out that despite the global success of BTS's 'Dynamite' music video, it did not receive tax benefits, arguing that the music industry should be included in national support policies for fairness across content genres.
They also highlighted the need for a dedicated fund to alleviate financial difficulties faced by small producers. While policy finance like the Mother Fund is focused on video and webtoons, there is no dedicated account for the music industry. The organizations stated, "If a dedicated fund is established, it will enable the production of creative and competitive content in a stable environment."
Finally, the organizations declared, "K-pop is a future industry of South Korea and a strategic asset driving diplomacy and economy," adding that tax support and financial guarantee systems would contribute to the sustainable growth of the industry ecosystem and the globalization of K-culture.
The statement was supported by the Korea Management Federation, Korea Entertainment Producers Association, Korea Music Label Industry Association, Korea Music Content Association, and Korea Record Industry Association.
Full Statement
"Realizing the K-Initiative requires equitable institutional support for the music industry.
The five music organizations, including the Korea Management Federation, Korea Entertainment Producers Association, Korea Music Label Industry Association, Korea Record Industry Association, and Korea Music Content Association, welcome the cultural powerhouse leap and K-Initiative policy of the Lee Jae-myung administration. We emphasize the urgent need for practical institutional support, such as tax support and fund creation for record producers, for the sustainable development of K-pop, and request active interest and response from the National Assembly and the government.
Welcoming and supporting the cultural powerhouse leap and K-Initiative policy
The K-pop industry expresses active welcome and support for the policy direction of the Lee Jae-myung administration, which takes the cultural powerhouse leap and K-Initiative as core national policies.
The K-pop industry, which has played a central role in the global spread of K-culture, will continue to be a key driver in enhancing South Korea's national competitiveness and realizing cultural sovereignty.
The recent global popularity of Netflix content 'K-POP Demon Hunters' reaffirms the practical potential and strategic value of strengthening national competitiveness using K-pop. It shows that K-pop is the most natural and effective means of promoting South Korea to the world.
- The global success of K-pop is the result of the risk-taking investment and planning of record producers. However, there is a lack of practical institutional support for record producers.
- Record producers face dual challenges of high risk and various regulations.
The global success of K-pop is not a coincidence but the result of bold investments, creative planning capabilities, and continuous risk-taking by numerous record producers. However, government policies related to popular music have mostly been designed for individual creators, and there is virtually no institutional support for record producers who compete in the fiercely competitive global market.
Instead, some incidents have generalized the perception that record producers have a superior position compared to singers or creators, preventing them from receiving fair evaluation as industry players.
Recently, record producers have suffered from lawsuits due to unilateral contract terminations and independent activities by some artists who achieved global hits. Even if record producers succeed in the industry, they always have to bear risks due to the lack of institutional mechanisms. Especially small record producers face dual challenges of various regulations and lack of practical support.
It is time for the National Assembly and the government to redefine their perspective on record producers and recognize K-pop as a global industry, promoting policy support accordingly.
Systematic support for small record producers will form a symbiotic structure for the entire related industry, including artists and creators.
Therefore, we propose the following for the promotion of the K-pop industry:
Proposal 1: Introduction of a tax support system for the music industry, which is excluded from tax benefits.
Above all, a tax support system for the music industry must be established, considering policy fairness and contribution to national development.
With the global success of 'Squid Game,' interest in investment support for K-content has increased. As a result, from 2023, the video content sector can receive tax credits of up to 30% of production costs.
In contrast, BTS's 'Dynamite' music video, which gained global popularity comparable to 'Squid Game,' is not eligible for tax support. This contradiction undermines fairness across content sectors and could lead to the stagnation of the entire industry in the long term.
Due to the nature of the hit industry, K-pop, the production costs of small record producers are similar to those of large record producers, and tens of billions of won are invested in debuting new idol groups. Despite bearing high investment risks, small record producers still lack corresponding policy protection measures.
Recent tax support from the Ministry of Economy and Finance for the content sector is limited to certain content genres like video and webtoons.
However, according to the 'Study on Improving the Tax Support System for the Music Industry' published by the Korea Creative Content Agency earlier this year, tax support for music content production can alleviate the financial burden of small record producers and contribute to a virtuous cycle of reinvestment in new content.
We sincerely hope that the music industry will also be included as a field of balanced national content support policy.
Proposal 2: Creation of a fund for small record producers.
Small record producers have sufficient creativity and planning capabilities but face limitations in bold investments in content production due to financial constraints. Therefore, the government should actively consider creating a dedicated fund for small record producers.
Currently, the Ministry of Culture, Sports and Tourism and the Korea Creative Content Agency operate various support projects linked to policy finance and the Mother Fund, focusing on video and webtoons, but access to the music industry is very limited.
For example, the 2025 K-Content Mother Fund created by the Ministry of Culture, Sports and Tourism in February this year does not have a separate music account, resulting in insufficient practical support. It is necessary to create a dedicated account for small record producers to establish a stable investment foundation.
If such an institutional foundation is established, small record producers can produce more creative and competitive content through stable funding, ultimately ensuring the diversity and sustainability of the K-pop industry.
K-pop is not just a popular culture genre but a future industry of South Korea and a strategic asset driving diplomacy and economy. It is time to place the music industry at the center of national content industry development policies.
Tax support and the establishment of financial and guarantee systems for record producers are crucial policies that contribute to the sustainable growth of the industry ecosystem and the globalization of K-culture. We earnestly request positive policy review and implementation from the National Assembly and the government.
Choi Ji-ye, Ten Asia Reporter wisdomart@tenasia.co.kr
