By Cho Jin-seo
Staff Reporter
SK Telecom is entering the Chinese music market by acquiring a 42.2 percent share in Taihe Rei Music (TR Music), a major record in China.
The mobile operator said that it will co-own the company with Taihe Media, the current largest shareholder, which has an equal share. The companies did not disclose the exact amount of the investment by mutual agreement, but it is approximately $10 million, SK's spokeswoman Cindy Kang said.
The entry into the Chinese music market is the latest move of SK Telecom's China project. It is the second largest shareholder of China Unicom, the second largest mobile operator, and has five other subsidiaries via SK Telecom China Holding. Last month, the firm also announced it will open an online shopping mall in the country this year.
``The Chinese music market has unlimited growth potential, and there is a growing need for digital music sources in both the wireless and wired markets,'' said Lee Seok-hwan, president of SK Telecom China Holding. ``Through Taihe Rye Music, we will enhance our core competitiveness in record production and expand business models in the digital music industry to become a leading pan-Asia music label.''
SK Telecom and Taihe Media will each have three board members in TR Music. The former will also send a chief operations officer and chief finance officer to the company, while the latter will have the CEO post.
The company estimated that the Chinese music market is worth 2 trillion won and will grow to 3.5 trillion won in two years thanks to economic development and the anti-piracy policy of the local government.
TR Music was established in 1996 and has grown to become the largest homegrown label when an investment pool joined the firm in 2004. Taihe became known in the industry because it was the first to enter digital music publishing in China ― it promotes its own artists and their new songs and albums through its Web site. It is currently the largest homegrown production, SK Telecom said.
SK Telecom said it will develop new business models for Taihe Rye's digital music content, with plans of music service on mobile phones via UNISK and Viatech, both China-based subsidiaries of SK Telecom.
Taihe Rye also signed a memorandum of understanding with Korean entertainment firm iHQ, an SK Telecom subsidiary, and JYP Entertainment, on helping each other's business in their respective companies.
The signing ceremony was held at Kerry Center Hall in Beijing Wednesday.
indizio@koreatimes.co.kr