Online music market gets more crowded

A boy enters a huge room lined with melon halves, and selecting two, he proceeds to the DJ box at a club, where he places the melons on the turntable and starts mixing the pulsing sounds of Benny Benassi for a room of ravers. “Music should be fresh,” he says in a voice-over. This TV commercial for Melon, a new music portal site launched by SK Telecom, is the latest effort in the mobile service provider’s aggressive campaign to draw younger customers to its online music site. SK Telecom was the first mobile service provider to jump into the online music market in November, but since then LG Telecom has started its own service, Music On, and KTF is planning to set up its own online music shop in the next few months. Cellphone service providers need these sites because many phones these days double as MP3 players, and users have to download music into their phones through Internet sites. But these service providers aren’t just competing with each other; they’re competing with online music sites as well. For the past few years, most online music sites in Korea operated for free. Some, like Soribada, were like Napster, in which members exchanged MP3s or other music files over the Web. Other sites, like Bugs Music and Mukebox, provided a streaming service, where users could listen to music on the Internet but couldn’t download it to their computer. However, more stringent intellectual property laws, which take effect beginning this year, have forced these music sites to convert to a fee system. On top of that, online sites say that they have been experiencing losses because mobile phone firms have snatched away their customers. “We can’t fight against large mobile companies in marketing since we don’t have the money to run TV or print ads,” said an official at Bugs Music. “Mobile firms are also at an advantage because they offer various discounts and other benefits in relation to other mobile contents that they offer.” In late December, the average number of daily visitors to Bugs Music’s site fell below 1 million, for first time since 2002 and well below its traffic in July 2003, when it had more than 2.7 million visitors per day. Online music sites are therefore offering special contents and services and increasing their marketing budgets. Muz has introduced a more personal music service in which users can make requests. Jukeon, operated by Neowiz, recently set aside 3 billion won for advertisements and will begin to be more aggressive in promoting its site. “Large music sites run by bigger companies can offer their users free music because they are going to pay for it themselves. We can’t do that,” an official at Jukeon said. by Wohn Dong-hee