So Korean operators SK Telecom and KTF are on their path of buying mainstream entertainment companies, and this one is the most signifcant of them all: Warner Music Group will announce plans to merge the bulk of its Warner Music Korea into a new joint venture with SKT, reports WSJ.
SKT will hold 49 percent in WS Entertainment, while WMG the rest. Warner is effectively giving up nearly half the revenue it derives from them, in exchange for the prospect of greater sales in the long term.
SK’s full-track mobile download service, MelOn Music, has more than four million users, 600,000 of whom subscribe to a $5-a-month service that gives access via PC or mobile phone to unlimited quantities of music. WS artists are to be given preferred treatment on MelOn Music and other platforms.
Reuters: An official at Seoul Records said the two would invest a joint 8 billion won ($8.6 million) in the venture, with Warner Music holding a 60 percent stake and Seoul Records 40 percent. SK, which controls 51 percent of South Korea’s mobile market, derives more than a quarter of its revenue from wireless data sales, including its Melon music downloading service.
Related:
— Korea’s Mobile Music Market Heating Up
— SK Telecom’s Mobile Internet Revs Up 21 Percent; Acquires Entertainment Company
— Korea Telecom Buys Majority Stake in Country’s Biggest Movie Studio; Talks With Disney
— SK Telecom Buys Record Label
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