Behind the K-Pop Boom: Legal Loophole Costing Songwriters Millions

Even though K-POP's reach continues to grow, the payment system for songwriters seems to be falling far behind the rest of the world. Every time one of their songs is played in a cafe, restaurant or store, songwriters receive slim to none royalties at all. Industry figures point to a legal exemption and weak public awareness as the main reasons.

Last year, the Korea Music Copyright Association (KOMCA) collected 60 billion won in performance royalties. This might sound large, but compared with other major music markets, it lags badly.

In the United States, ASCAP, one of the country's main music rights organizations, collected about $1.47 billion in domestic performance royalties last year. Japan's collections in 2024 totaled roughly 26 billion yen, about four times what KOMCA brought in. The full-year results of Japan's main music rights body, JASRAC, for 2025 is not yet public.

Even Spain which has a smaller music market than South Korea, collects about twice as much. Just last year, Spain's music rights organization, SGAE reported 73.9 million euros in performance royalty revenue.

People in the industry point to one specific clause as the main problem: Article 29, Paragraph 2 of Korea's Copyright Act. The clause allows businesses to play commercial recordings for free, as long as they do not charge customers a separate fee, such as admission. Only a handful of categories, including large retailers, nightlife venues, and coffee chains, are required by presidential decree to pay performance royalties. Many in the industry say this clause lets most ordinary shops use music for free, and they argue it cuts directly into songwriter income.

Outside Korea, small business owners typically pay at least 30,000 to 40,000 won a month in performance royalties, regardless of what kind of business they run. Getting caught playing music without paying can lead to fines ranging from hundreds of thousands to several million won.

Online services that bundle the licenses have become widely used, because business owners would otherwise have to pay each rights organization separately. A comparison of 10 major services shows that a small cafe pays about $26 a month on average. In Korea, by contrast, most shops pay nothing, and those that do pay only around 4,000 won a month, split between KOMCA and performers' groups. That is less than the price of a single coffee.

The fairness of the system is also questioned by the business owners, obligated to pay the performance royalties. A cafe that sells only coffee owes royalties, but if it adds bread, pasta, or salads to its menu, it is no longer required to pay, since its category shifts to "bakery" or "restaurant." Owners point to that gap as one of the clearest loopholes in the current rules.

Article 29, Paragraph 2 has already been challenged in court. In 2019, Korea's Constitutional Court ruled 5 to 3 that the clause was constitutional. The majority said the public benefit of giving people wider cultural access to recorded music outweighed the cost, and warned that requiring royalty payments would put a heavier financial load on small business owners. The three dissenting justices argued that the cultural benefit was not clearly proven, while the harm to creators' rights was serious enough to make the clause unconstitutional.

Before and after that ruling, international rights groups have repeatedly criticized Korea's low collections. In 2018, the U.K. rights organization PRS filed a petition asking Korea to review the clause, saying it violated international treaties. Last October, the International Confederation of Societies of Authors and Composers (CISAC) called for the clause to be scrapped entirely, saying it undermined the basic right of creators to license their work and receive fair payment, a right protected by international law and by Korea's own legal system.

Public attitude about music rights matters just as much as rewriting the law. Industry workers, trying to collect even the smallest fees that are owed, have at times faced physical threats from business owners.

Cultural access is important. So is paying the people who create the music. Thirty thousand won a month from a single shop is not much. Added up across every business in the country, it becomes the difference between a healthy royalty system and one that keeps falling behind the music it is meant to support.