A new role for phones as promoter of pop music

When Ricky Martin’s new Spanish-language album was released last month, it made its debut not in Puerto Rico, among Mr. Martin’s Spanish-speaking compatriots, nor in the United States, many of whose citizens are Hispanic. The album, “Almas Del Silencio,” was first heard in Korea. On May 13, six days ahead of the scheduled coordinated release in the United States, the United Kingdom, Japan and Australia, Koreans downloaded cuts from the CD to their mobile phones, heralding a new age in entertainment promotion. “The executives at the U.S. headquarters of Sony Music thought I was crazy,” said Yang Beom-joon, managing director of Sony Music Entertainment (Korea) Inc. Mr. Yang proposed the revolutionary scheme to the firm’s U.S. headquarters with no success. But after exchanges of e-mail that started with the first one from him: “A crazy idea for Ricky Martin Spanish album,” and a month of persuasion, he got Sony’s support. “It was not difficult to convince Sony of the influence and advertising potential of mobile services in Korea. What took longer and was harder was persuading Ricky Martin’s managers,” Mr. Yang said. About 10 new and old hit songs by Martin, including “Jaleo,” the title song to his new album, plus music videos, ring tones, ringback tones, wallpaper and other downloads pertaining to him and his music were made available on May 13 through “June,” the multimedia mobile service of SK Telecom Co. “So far, a total of 100,000 downloads of Ricky Martin’s music, videos and photos have been made,” Mr. Yang said. “I have heard that many people who are not in the music industry say they have noticed Ricky Martin’s comeback through promotions on June.” Mr. Yang was one of the first people in the music industry to recognize the potential of delivering music through mobile phones. In fact, many industry specialists forecast that in Korea, mobile music services, including ring tones and ringback tones, the jingles and songs you hear on your end when you make a call to a cell phone, rather than the traditional ring or beep, will overtake the beleaguered old-line record business this year. “The offline record market will be from around 180 billion [$150 million] to 200 billion won this year,” Mr. Yang said. “The mobile music market will grow to around 200 billion to 250 billion won.” Of mobile music and related services, actual songs will account for about 30 percent of total revenues, Mr. Yang said. Many Korean record producers and distributors of music from overseas are honing in on the mobile music business. SM Entertainment, the largest record producer in Korea, with a 25 percent market share last year, was an early mover in the mobile music market. The company established Fandango Korea in December 2000, which provides music downloads, telephone rings and “mobile karaoke.” “At that time, the mobile infrastructure in Korea was growing fast,” said Han Se-min, investor relations director of both Fandango and SM. “We saw a new market.” Mr. Han said the mobile music industry, which was worth 120 billion won last year, would grow to 220 billion won this year. This year mobile music services will account for at least 10 percent of SM’s total revenues. Ring downloads have been the most popular service, Mr. Han said. But music, especially for the youth market, figures prominently in the future. SM and Fandango released the third album of BoA, one of the most popular teen pop stars in Korea, simultaneously offline and online in May. According to the Recording Industry Association of Korea, in 2002 teenagers made up 47 percent of the record audience, and 31 percent were in their 20s. Sixteen percent were in their 30s. Mr. Yang of Sony attributed the rapid growth of the mobile music industry to Korea’s well-developed information technology infrastructure and relatively large customer base. Indeed, Korea is seen across the globe as an incubator for new ideas in mobile services. At the end of January, about 32.5 million Koreans, 69 percent of the population, subscribed to mobile services, according to the National Computerization Agency. As of October last year, 29 million mobile handsets that support wireless Internet had been sold in Korea. Ko Chang-kook, public relations manager at SK Telecom, said that the firm’s June service had 680,000 users by the end of May. June, launched in November 2002, is a third-generation wireless Internet service that provides movies, music videos, music downloads, computer games and other multimedia services through mobile handsets. Subscribers can transfer data at the speed of 2.4 megabits per second. The service, while handy, can also be expensive, depending on a person’s digital appetite. In addition to the basic call fee based on the connect time to the Internet, music videos cost 900 won per download. Songs cost 800 won or 700 won, according to their digital quality, which has improved over the years. “The sound that you hear from mobile handsets used to be mechanical. Now it is real music,” Mr. Ko said. He said SK’s goal is to increase the number of June subscribers to 1.5 million by the end of the year. The data show that young audiences have tightened their purse strings in recent years. Peaking in 2000 at 206 billion won in revenues, record sales in Korea have been declining steadily. Sony Music, since entering the Korean market in 1989, has recorded growth every year until 2000, Mr. Yang said, but its expansion fell into negative territory in 2001. In a recent survey by the Korea Culture and Contents Agency 48 percent of respondents said they cut their purchases of music CDs and tapes after using online music services. Those service included the controversial Internet swap sites, one reason the difficulties the record industry is going through are not expected to abate soon. Mr. Yang also cited the worldwide economic slowdown. “But the main reason for the current problems is that the record industry failed to catch up with the times as people changed the medium and the way they listen to music,” Mr. Yang said. “From LP, LD to CD, minidisk and MP3, people are enjoying music in different formats. Now we have the emergence of new media, which are the Internet and mobile phones.” by Kim Hyo-jin