Warner Music Group is setting up a precedent-setting joint venture with leading South Korean telecom operator SK Telecom that will handle Warner Music Korea's stable of domestic acts.

Warner Music Group is setting up a precedent-setting joint venture with leading South Korean telecom operator SK Telecom that will handle Warner Music Korea's stable of domestic acts.

WMG chairman/CEO Edgar Bronfman Jr. announced the establishment of the new company, WS Entertainment, today (May 10) at the Music Matters conference in Hong Kong.

"This first-of-its-kind joint venture will combine the first-rate recorded-music assets of Warner's local roster and SK's Seoul Records in an entirely new business model in the signing, development and distribution of music," Bronfman said. The new company will leverage Warner's A&R expertise with SK Telecom's strength in the digital delivery of content, he added.

"South Korea is the most advanced and progressive mobile music market in the world," Bronfman noted. "Consumers there spend twice as much on mobile music as they do on traditional music formats."

He added, however, "We do not think that WS Entertainment is a universal solution, exportable to territories everywhere."

Seoul Records will provide both on-and offline distribution of WS Entertainment content, while Warner Music Korea will now handle international acts only.

WMG will own 60% of WS Entertainment, with SK Telecom owning the remainder of the venture's equity. WMK MD Phillip Oh will serve as the new company's managing director, as well as retaining his current post. He will report to Warner Music Asia Pacific president Lachie Rutherford.

"We feel we want to be part of the (mobile) product-development team which breaks the boundaries and gets out on the edge," Rutherford tells Billboard.biz. "By making this move, we're putting ourselves at the forefront of the future of the music business."

Rutherford says that, subject to approval from South Korean regulatory authorities, WS Entertainment will begin operations in July or August.

"Lachie Rutherford's a very smart guy," comments one industry source, "but it's hard to make money in South Korea."