Korea blazes trail with telecom-music merger

Korean papers are reporting that SK Telecom, that country's biggest wireless phone carriers, has purchased a controlling share in the country's biggest record label.

The carrier said it's interested in having a bigger content pool for its Melon digital download service, one of the earliest iTunes-esque services for mobile phones. SK Telecom also announced a few weeks ago that it was starting a $75 million media investment fund.

Could this portend similar moves in the U.S. market? Certainly record labels and wireless companies have been getting increasingly chummy over the last few months. Wireless companies like Verizon definitely see content, particularly video and music, as one of their key revenue sources in the coming years.

But it's also important to remember that Korea has a long tradition of vertical integration with their chaebol system, much like Japan's keiretsu. The entertainment and telecommunications cultures in the U.S. are still very different beasts, no matter what their alignments today.

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    John Borland
    covers the intersection of digital entertainment and broadband.
     

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