SK Telecom, South Korea's largest telecom, has launched a Web-based streaming-audio service aimed at stores, restaurants, bars and other businesses that use background music.

The new service, Biz Melon, went live on May 4. It offers a catalog of 1.2 million songs, mainly comprising domestic repertoire, for 20,000 won ($21.28) a month. It caters to businesses occupying less than 7,115 sq. ft; larger businesses must negotiate deals on a case-by-case basis.

Stores can receive a 10% discount if they sign a one-year contract.

"Biz Melon Webcasts a wide variety of music through 250 music channels, which are sorted by business type, theme, genre and listener age group," says an SK Telecom spokesperson. "And starting in June, store owners will be able to use their mobile phones to change their music channel, even when away from their shops."

SK Telecom is the largest online and mobile music provider in Korea, with over 8 million registered users (mainly via mobile phones) of its MelOn song-download service and 800,000 users of its subscription service.

A source at SK Telecom says the company hopes to sign up 20,000 businesses by the end of 2008, not including large franchise operations, which will negotiate separate deals with SK.

Bluecode Technology Corp., which in 2005 became the first South Korean company to offer B2B online music streaming, currently has 3,100 stores signed up to its Music Manager music service. Telecom KT Corp.'s Shopcast service has 2,500 clients, and Hanaro Telecom's TeeOn has 1,200, according to industry sources.

SK Telecom says it has negotiated performance-royalty rates with the Ministry of Culture and Tourism and the Korea Music Copyright Association.

While large businesses and franchises pay for the music used in their stores, most of Korea's smaller retailers simply stream music illegally from free sites.

"If a service like Biz Melon is to succeed, music makers need strong performance rights and the ability to claim compensation," says a spokesman for the Korean Association of Phonogram Producers, the organization responsible for collecting digital music broadcasting and transmission rights. "Without the government's strong will to stop illegal music transmission and provide a strong legal base, these services will have only limited influence."