Shinsegae acccused of 'backdoor deal' with Big Hit Entertainment
By Kim Jae-heun
Chung Yong-jin
Nowadays, those hiring K-pop star Bangtan Boys as models for advertisements are among exclusive club. The boy band's value has skyrocketed to an unprecedented level where only cash-abundant conglomerates can afford to use them in their product commercials.
A retail insider said Bangtan Boy's agency Big Hit Entertainment, led by founder Bang Si-hyuk, has decided not to consider striking an advertisement deal with the boy band for domestic only campaigns that have different models for overseas campaigns.
This is one of Big Hit Entertainment's strategies to raise the boy band's pay rate in the advertisement market, which was estimated at about 7 billion won ($6.04 million) last year, according to the official. The official asked not to be identified citing the sensitivity of the issue.
Considering that Korean football star Son Heung-min receives 1 billion won for a one-year advertisement contract, which is already the top-level payment in the local industry, Bangtan Boy's power in the market is absolute. Local conglomerates have been weighing the value of hiring Bangtan Boys in their advertisements because they were uncertain if the high price will pay off.
Bang Si-hyuk
On Thursday, Starbucks Korea said it has successfully signed a contract with Bangtan Boys to launch new drinks, foods and goods. Starbucks Korea is a 50-50 joint venture between Shinsegae affiliate Emart and Seattle-based Starbucks.
The announcement is regarded as rather a “surprise” by many in the local industry as the country's retailer giant Shinsegae Group was recently embroiled in a patent dispute over the use of acronym “BTS” on apparel with the entertainment company.
Until last Tuesday, the group's department store franchise was in a legal battle against the boy band's agency as it alleged infringement of BTS's trademark rights.
Big Hit Entertainment applied for the trademark rights on apparel in 2015 but the Korean Intellectual Property Office (KIPO) dismissed it as Shinhan Corporation had owned the patent for their trademark “BTS Back to the School.”
Three years later, Shinsegae bought the trademark rights from Shinhan Corporation and registered at KIPO to use it for their fashion select shop “Boon the Shop.” But Big Hit Entertainment immediately raised objection so as to cancel Shinsegae's BTS trademark rights registration.
On Jan. 8, Shinsegae, all of sudden, said it will waive the patent related to BTS and put an end to the legal conflict against Bangtan Boys.
Many questioned the reasons behind Shinsegae suddenly giving in as the department store declared it only wants to support Bangtan Boys because the band is “an icon of hallyu” and it doesn't want to continue the strife with the entertainment agency.
Given this, another source familiar with the issue alleged the possibility of Shinsegae striking a “backdoor deal” with Big Hit Entertainment. An official admitted that the two sat on the negotiating table to discuss ways to settle the patent dispute in the early months of last year.
“There was an opportunity for Shinsegae to negotiate with us but it requested compensation of a scale that was difficult to accept and it fell apart,” a Big Hit Entertainment official said.
It is believed that Shinsegae may have settled its legal dispute with the entertainment agency over the use of BTS trademark rights by placing Bangtan Boys as Starbucks Korea's campaign models, sources familiar with the matter said.
Starbucks Korea flatly denied the allegation.
“We started this project in January and the decision was independent. I've never heard of a patent dispute between Big Hit Entertainment and Shinsegae and our collaboration with the Bangtan Boys has nothing to do with any agreement that Shinsegae could've made with the entertainment company,” a Starbucks Korea official said.
Starbucks Korea's collaboration with Bangtan Boys will only be for 16 days from Jan. 21 to Feb. 6. The coffee chain said part of the campaign's profit will be used for a charity fund
.