The companies when honest are creating groups from nothing thus take the bulk of the Risk.
Nope, not at all, because (most of them) saddle their trainees with debt. Even when they don't, artists bear the cost of production and are only paid the residual after breakeven.
Pretend you're a company:
Take in trainees from rich families and then, even if they fail entirely due to your own incompetence, you can freely chase that debt for as much as you want.
The companies have it both ways: They get to dictate the product and tell the idol exactly what to do - to often absurd and seriously unhealthy degrees -
but at the same time, offload the cost of their vision onto the idols. The consequence is essentially free labour as idols forego payment for years.
An extremely typical example is Golden Child, who didn't receive payment even after 7 years. The consequence of failure, you say, but whose failure? Woolim keeps going, despite not having any money to pay its labourers, apparently. Because the benefit of failure is that they get to keep 100% of the revenue.
If Golden Child really took off, what then? Then the company still gets a huge chunk (usually 50%?) of the proceeds.
Heads you lose, tails they win.
You say that it's not like people working fast food. And you're right! If I start a takeaway, I have to pay my employees. It doesn't matter if I have made a profit or not. I have to pay them at least the minimum wage for their time (and also contribute to their pension). So now, compared to a k-pop company, I'm doubly-disadvantaged: I actually have to pay for my labour, and my labour can leave any time it wants. And yet, the fast food industry does pretty well for itself.
You could argue, "Well, no, it's not the same, because the companies bear the expense of training, and frequently of housing and food"
I would say the latter is a choice that they have made. There is no real logical reason why trainees and idols should have to room in quarters provided by the company, it's not like they're running a remote oil rig. The VCHA vs. JYPE thing shows how this is nakedly abused, with the company leasing extremely expensive property without consulting the people who it expects to actually pay for it.
It is generally expected and understood that any form of production requires capital investment. Music production is not special in this regard. Outside of the arts, it is never the case that the liability for that capital input falls onto labour.
Western labels aren't too different here, but they're dealing with a legal system that has a stronger balance towards the rights of the individual rather than the corporation.
The NJZ example is a good one here.
Here, in the UK, if I voided contract, I would have to either compensate or provide specific performance. The compensation would be the equivalent of the losses of the aggrieved party. Or in other words, the fine that I pay is not punitive, it is restorative, it is to put the person who got screwed over in the same place they would have been had I not breached contract.
So when applying to NJZ, it would be that the proceeds of any work they do would be due to HYBE. Instead, we have the ridiculous and seemingly arbitrary sum of nearly a million dollars per member per breach.
You say they have a break clause, but a break clause that has overly onerous conditions
is not a break clause in actuality. If, in drafting a contract, I said you have to pay me eleventy gazillion dollars to break it, the clause would be considered an unfair term and thrown out. Yet in Korea it's like, "Oh, wow, look, It Is Written".
That of course, doesn't mean that law is always equitable, in the UK or otherwise, and so the law itself is not a good substitute for justice. What do I mean when I say this?
Well, again, consider NJZ. They have paid off their training and production costs and then some. They have provided many millions of pure profit to their company. What moral right does the company have over them? Why should the company get to dictate what they can and cannot do, or tell them that they are unable to quit? What is the
moral basis of that? The basis is contractual. It is legal. Because the law favours companies.
You can point to IP law, but IP law as it currently exists is a perfect example of how the legal system disadvantages individuals (and society as a whole) in favour of corporations. That it exists it not justification. As early as the 18th century, people like Thomas Paine were questioning the justice of ownership like this. In modern economic terms, we consider net social benefit, or public benefit.
If a group does not do well and their company dungeons them while simultaneously preventing from pursuing other avenues, is there a social good to that? No. Obviously, clearly, not.
What benefit does the current set-up provide? It gives k-pop companies a degree of financial protection. The consequence is an oversupply of groups, many of whom have zero hope of success. Is this beneficial to society? No: Many of these people would be better off doing something else with their life, instead of having seven years of their life wasted by a company that is tossing a coin without having to shoulder 100% of the risk. It's actually a terrible waste of societal resources.