Korea's new business model in the music industry

Finally, something appears to move in the music industry, at least from the companies's side of the fence. Consumers download songs anyway, legal or illegal and the prevalence all across the countries of "pirated music" just shows that the traditional business model simply doesn't work anymore.

Korea is a bit special, anyway. Some of the mobile operators or even the handset producers have produced handsets capable of playing MP3 - much to the dismay of the local recording industry.

LG was at the forefront of these develoments and now, they did it again, once again.

They have just signed a "free MP3 files" contract with popular music groups, causing strong objection from other competitors and music groups - of course.

Subsequently, all "LG Telecom subscribers may download MP3 music files to their cellular phones without payment from November till June 2005, under the condition that LG Telecom pays the music development fund US$9 million."

Competitors oppose the move but mainly objecting to the fact that they paid a monthly copyright fee for music files, which came to about half of what LG paid in total.

We are not sure, but doesn't LG's move look more clever, more daring in developing a new model? Isn't boldness a step forward, pushing the boundaries of what is known before a way to remain competitive? We believe they have great reasons to do this and it sure attracts attention in the marketplace.

(by Asia Business Consulting)