SK Telecom Enters Music Business with AI/5G/Blockchain Technology
Published2018.02.01 14:55SK Telecom is partnering with three entertainment companies—SM Entertainment, JYP Entertainment, and Big Hit Entertainment—which possess strong content power including EXO, TWICE, and BTS, to launch a new music platform within the year.
The four companies—SK Telecom, SM Entertainment, JYP Entertainment, and Big Hit Entertainment—held a music business agreement ceremony at SK Telecom headquarters and agreed to collaborate closely to begin music platform operations within the year.
The ceremony was attended by SK Telecom's Noh Jong-won, Head of Unicorn Labs; SM Entertainment's Kim Young-min, Executive President; JYP Entertainment's Jung Wook, CEO; and Big Hit Entertainment's Bang Si-hyuk, CEO.
Additionally, a contract was signed on the same day under which iriver, SK Telecom's subsidiary, will assume B2B distribution operations for the music content of the three entertainment companies starting February 1st.
This agreement was pursued to promote overall development of the domestic music industry by establishing a virtuous cycle structure of content creation, distribution, and investment. Entertainment companies and service platform operators will work together to create a more efficient and creator-friendly ecosystem, and have joined forces to provide newly differentiated music services by applying ICT technology.
Following this music business agreement signed by SK Telecom, the nation's leading ICT company, and the three entertainment companies, dramatic changes in the domestic music market are anticipated.
New Music Platform to Launch Within the Year … Introducing Future Technologies Including AI, 5G, and Blockchain
SK Telecom will newly launch a music platform service within the year. The company plans to provide differentiated customer service by introducing future technologies such as AI, 5G, and blockchain.
First, SK Telecom plans to analyze data based on AI to enable more advanced forms of personalized content consumption and recommend content tailored to individual preferences.
Additionally, the company plans to position the new music platform in conjunction with "Nugu" to serve as a core content platform for voice recognition speakers and in-vehicle infotainment (IVI) systems.
Furthermore, SK Telecom is promoting the development of "visual music content" by utilizing future video technologies such as AR/VR that will be activated alongside 5G.
SK Telecom is also reviewing the development of new concept services that integrate music services with various products from the company and its affiliates. For example, it is possible to bundle diverse lifestyle services such as telecommunications, smart home, video (Oksusu), and commerce (11th Street) to develop distinctive customer benefit packages similar to Amazon Prime.
SK Telecom and the three entertainment companies have decided to actively support the overseas expansion of K-POP artists. They plan to join forces to enable domestic artists to expand their overseas fan base by leveraging video content, with plans to prioritize the Asian market.
Fostering a Virtuous Cycle Structure in the Music Ecosystem by Enhancing Creator Rights
SK Telecom is reviewing ways to introduce blockchain technology to the new music platform to protect music copyright and enhance transparency in transaction records. Once blockchain is implemented, transaction costs can be reduced to expand creator rights.
Blockchain technology has only been discussed conceptually regarding its application in music distribution, so if major music platform operators adopt it comprehensively, it is expected to have significant ripple effects on the music industry.
SK Telecom is also promoting data-driven music content business. Data-driven music content business refers to a business model that analyzes user artist preference data and newly plans and produces derivative content products such as concerts and merchandise where demand exists but supply is insufficient, enabling both artists and operators to create additional value.
Additionally, SK Telecom is reviewing the establishment of shared infrastructure enabling creative activities to support talented new artists, as well as crowd-funding style concert planning.
Iriver to Handle B2B Distribution of Music Content from Three Entertainment Companies
Iriver, SK Telecom's subsidiary, will supply the content of the three entertainment companies to music platform operators such as Melon and Genie, as well as to music wholesale and retail businesses such as Shinnara and Hot Tracks.
The domestic digital music market share of the three entertainment companies that have partnered with SK Telecom is approximately 15%, while their album market share including CDs exceeds approximately 50%. SK Telecom plans to expand collaboration with diverse partners starting with the three entertainment companies.
Noh Jong-won, Head of SK Telecom's Unicorn Labs, stated, "We will collaborate with various domestic and international music and technology companies with an open mind," adding, "We will refrain from wasteful competition domestically and continue our efforts to ensure that Korean music content spreads further in the global market."
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