Leading Korean telecommunications firm SK Telecom is buying a controlling stake in YBM Seoul Records, one of the nation’s largest artist management and record companies.
According to Seoul Records, SK Telecom will buy a 43.3% stake in the music company for $12.6 million.
“We’re hoping a success here will help the industry as a whole return to the right track,” says Hahm Yong-il, president/CEO of Seoul Records.
With Korean physical sales in decline and digital sales on the rise, many in the industry are predicting more buys could be on their way, as the telecoms and other online music sellers look to own original content and catalogs.
According to local IFPI affiliate the Music Industry Assn. of Korea, combined sales of CDs and cassettes have declined from more than $400 million in 2001 to $149 million in 2004. Digital sales, however, have taken off, topping $200 million last year, says the trade body. Digital music revenues are on track to exceed $300 million in 2005, according to the Korean Assn. of Phonogram Producers, the group in charge of collecting digital revenues.
YBM Seoul Records had sales of $23.8 million in 2004, on the strength of such popular artists as Lee Soo-young and Loveholic.