SK Telecom buys major music company

SK Telecom, Korea’s largest mobile service provider, took over YBM Seoul Records, the largest record company in Korea. The company said yesterday that it invested 29.2 billion won ($29.1 million) to buy 60 percent of the shares of the record company. “We wanted to acquire a safe source for music content,” an SK Telecom official said. SK Telecom currently operates Melon, a music portal for mobile phones, and is also the leading shareholder in TU Media, the only company that is offering satellite digital multimedia broadcasting, or DMB, services. Satellite DMB services include audio, video and data content transmission. The purchase was the most recent in a line of similar investments. In February, the company spent 14.4 billion won to acquire 21.7 percent of the shares of IHQ, a maker of films and television dramas, and became the second largest shareholder. It also has call options for further purchases of IHQ in March next year, which will most likely make it the largest shareholder. Also yesterday, the company said that it will establish a music fund to make strategic investments in new projects and to support record companies and artists in expanding globally. Earlier this month, it created an entertainment fund jointly with a venture investment company in order to invest in films and dramas. The scale of the fund will be 75 billion won, which would make it the largest of its kind in Korea. “The music and entertainment businesses only account for a small portion of our total profits. We are just preparing for the future since content is becoming more and more important. Before, we had to rely completely on content providers,” an SK Telecom official said. “The recent investments that we have made are in the same vein, in that we want to create synergy in the content creation market,” he said. After the announcement, YBM Seoul shares rose the daily 15 percent limit to close at 5,650 won. SK Telecom shares gained 2 percent to 176,500 won. by Wohn Dong-hee