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SKT, 2nd largest shareholder of iriver and SM C&C
Plan to provide AI-based personalized Hallyu contentSK Telecom and SM Entertainment are setting out to pioneer new markets by developing future-oriented content and services.
The two companies agreed to cooperate closely in the next-generation content business through extensive mutual capital increases and equity transfers centered on their affiliates, iriver and SM Culture & Contents (hereinafter SM C&C).
SK Telecom decided to conduct paid-in capital increases of 25 billion won for iRiver, a manufacturer of high-quality audio equipment, and 65 billion won for SM C&C, a drama and entertainment content production company. SM Entertainment also decided, together with its affiliates, to conduct paid-in capital increases of 40 billion won for iRiver and 7.3 billion won for SM C&C.
With this agreement, SK Telecom becomes the second largest shareholder of SM C&C, and SM Entertainment becomes the second largest shareholder of iriver. In addition, iriver has absorbed SM affiliates SM Mobile Communications (hereinafter SM MC) and SM Life Design Co. (hereinafter SM LDC) to pursue new content-based businesses, while SM C&C has acquired SK Planet's advertising business to strengthen its stable revenue base.
SK Telecom possesses extensive capabilities in AI and media, as well as in the manufacturing of music-related devices (iRiver) and the advertising business (SK Planet), while SM Entertainment possesses star intellectual property rights, content production capabilities, and strong fan loyalty.
The Korean Wave industry is expected to face a new turning point through the strategic alliance between the two powerhouses in the ICT and content sectors. This is because the convergence of ICT and content is projected to accelerate, with the emergence of AI-based personalized content services.
In addition, the culture and content derivative industry is also expected to expand significantly in combination with ICT. SK Telecom and SM Entertainment plan to leverage iriver’s product planning capabilities to identify and pursue various business opportunities derived from Hallyu entertainment content in secondary and tertiary ways.
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