Smart Devices boost online music sales

 In Korea, the number of smartphone users surpassed the 20 million mark last year. The penetration rate is expected to exceed 70 percent of the population within the year. With their smartphones or tablet PCs, people carry an MP3 player with them virtually all the time.
The fast adoption of smart devices has also driven online music sales in Korea more quickly than in any other country. In Korea, the digital music industry saw a more than 10 percent increase in 2010, accounting for up 80 percent of total music sales here. The Korea Creative Contents Agency said that online music sales reached 622.2 billion won ($540 million).

 SK Telecom, the nation’s largest mobile carrier, currently dominates more than half the online music market. Of the 17 million users of its “Melon” service, 2 million are paid members. Melon was able to succeed as it was launched when there was no legal online distribution channel for music files in Korea. The company logged 138.9 billion won in sales in 2010, up 37 percent from 2009. In early 2009, just 1 percent of Melon users listened to music via their smartphones. But now the figure has surged to 62 percent, the company said.

Online music sites offer a bundle of several songs based on monthly payment, with a song selling at 60 won on average. They share half the profits with music providers such as music agencies, singers and composers.

KT, the nation’s No. 2 mobile carrier and the distant fourth player in the online music service, launched “Genie” in December with an aim to become the Korean version of Apple’s iTunes. Genie lets artists price their music and shares more profits up to 70 percent ― the same level as iTunes ― the company said. “iTunes has succeeded not just because it was a perfect platform for digital music service but also because it shared more profits with copyright holders and encouraged the active participation of artists,” said, high level executive of the mobile business unit at KT.

Industry people showed some doubt that the price hike, up to 600 won for a latest song, could lead consumers to a black market for music downloads. They say “killer contents” could make users willing to pay more.

 -Jan 06 2012 Korea Herald-