"payola" became a popularized term bc of Newjeans. Tokkis are aware of that & is why HYBE got backlash after correcting NJ sales in Japan from 1M to 50,000. But HYBE also corrected sales for V's Layover album as well. The correction isn't an isolated issue. It's simply illegal.
The whole NewJeans demand and impact narrative was mostly media play just like ADOR's profits in 2023.🗣💁🏽♀️The production order of 3.5 million copies of the album 'Get Up' was used to manipulate the surge in gross profit margins in 2023 for ADOR under MHJ. However, 1.6 million albums are still sitting in ADOR's inventory‼️
🔹️In corporate accounting, building up a massive pile of unsold inventory can artificially inflate a company’s operating profit for that specific year. This happens because of how the Cost of Goods Sold (COGS) and Fixed Manufacturing Costs are calculated.
When ADOR manufactured 3.5 million copies of NewJeans' Get Up, they incurred two types of costs: variable costs (like the physical paper, plastic, and ink per album) and fixed costs (like studio production, design, photography, overhead, and factory setup fees).
Fixed costs stay the same whether you print 1 album or 3.5 million albums. By overproducing, ADOR triggered the "allocation effect":
➖️Scenario A (Produce what you need): If you spend $1,000,000 in fixed costs and print 1 million albums, each album carries $1.00 of fixed cost. If you sell them all, your expense is $1,000,000.
➖️Scenario B (Massive overproduction): If you spend that same $1,000,000 but print 3.5 million albums, each album now only carries $0.28 of fixed cost. Which make looks like for that year, ADOR spent less with fixed costs. And profit went up.
If 1.61 million albums go unsold and sit in a warehouse, the $450,000 of fixed costs tied to those unsold albums gets pushed into the future as an asset. It is not counted as an expense for 2023.
🔹️🗣The Result: ADOR successfully hid a massive chunk of their 2023 expenses inside the unsold inventory sitting in the warehouse.