The Korea Herald


New rates for music downloads, streaming services face backlash

By Korea Herald

Published : June 11, 2012 - 19:41

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Copyrights advocates, producers and artists on Monday requested the government to withdraw its new rating system for online music downloads and streaming services, saying the new plan will not bring fundamental changes to the market and will continue to allow distributors to sell tunes at low prices.

The Ministry of Culture, Tourism and Sports announced a set of comprehensive plans including a new rate system that charges fees based on the number of digital tunes downloaded or played in streaming services. The new system is to be implemented starting on Jan. 1, 2013.

The plan also allows recording companies to hold back their tunes from the monthly packages or packages that sell a number of tunes in bundles. Currently, a subscriber pays 3,000 won per month on average for an unlimited access to digital music streaming service.

The new plan may increase recording companies’ income. However, as long as the flat rate system exists, digital tunes will continue to be sold at dumping prices, industry insiders say.

“People all talk about how proud they are with the Korean Wave drawing explosive attention from around the world. But if we look at hallyu’s price value at home, it is really depressing,” Kim Dong-hyun, an official at the Korea Music Copyright Association, told The Korea Herald.

The standard price of a digital tune download is set at 600 won, the same price that has been charged for the last 10 years, Kim said.

It may look like providers including recording companies, producers and artists are taking 360 won or 60 percent of the standard download fee. But they get far less because tunes are being sold as part of monthly packages, which are offered at a 70-80 percent discount by distributors.

The size of the country’s online music market is about 400 billion won, according to KOMCA, which is relatively low considering its dominant presence over the offline market. About 70 percent of music products are being purchased online as digital tunes, as digital tunes are much cheaper to buy than CDs.

By Cho Chung-un (