Asia Times: 'Sound Sea' swamps Korea's music industry


	April 21, 2001	atimes.com

The Koreas

'Sound Sea' swamps Korea's music industry
By Louis Hau

SEOUL - While the legal battle over music-swapping service Napster continues to rage in the US, a fight over a similar MP3-download website is brewing in South Korea.

Soribada, a peer-to-peer service similar in its ease of use to Napster, is the target of a probe by the Seoul district prosecutor's office following complaints from four local record companies of copyright infringement by the website, according to an official in the prosecutor's office, who asked to remain anonymous. The official says it is too early in the investigation to determine what, if any, action will be taken against the site. He notes that his office is paying close attention to the progress of the Napster court case.

The four companies that filed a joint complaint against Soribada - Daeyoung A&V, Wooffer Entertainment, Donga Music and Sinchon Music - sell recordings by some of South Korea's biggest pop acts, including hip-hop duo Clon and all-girl singing group FinKL. "Music recordings take effort, require capital and carry a copyright," says Daeyoung A&V's planning director Lim Kyung-min. "Everyone must recognize this."

MP3 files have become all the rage among young South Korean music fans, a trend fueled by the prevalence of high-speed Internet connections which greatly shorten the time required to download a file. Tech-savvy South Korea is also the birthplace of the Rio, the first commercially successful portable MP3 player.

Soribada and other similar music-swapping websites cost the Korean recording industry an estimated 200 billion won (US$152 million) in lost revenue from last June to January, according to Lee Chang-joo, a director of the Recording Industry Association of Korea (RIAK). Lee adds that the lost sales have led to a sharp decline in the number of music retailers in South Korea, from 5,200 at the end of 1999 to 2,400 at the end of last year.

Lee says shipments of prerecorded music in South Korea totaled about 320 billion won at trade value in 2000, down sharply from approximately 400 billion won in 1999 and far short of expected sales of around 500 billion won. He notes that these figures exclude store returns, which he says totaled about 100 billion won last year.

But sales data posted on the RIAK website earlier this year indicated that Korean music sales experienced a modest increase in 2000, rather than a sharp decline. According to those figures, total music sales reached 410 billion won in 2000, up from 380 billion won in 1999. Lee says the data posted on the website, which also excluded store returns, may have contained some errors, adding that more precise sales information for 2000 will be available later this year.

Soribada, which means "sound sea" in Korean, began operating last May and was founded by a pair of US-educated brothers, Yang Il-hwan, 30, and Yang Jung-hwan, 26. Although similar websites have since sprouted up in its wake, Soribada now has 3.8 million registered users, making it by far the country's most popular music-swapping website, industry observers say.

Yang Jung-hwan, who graduated from Columbia University in 1997 with a Bachelor's degree in computer science, says that the record industry's efforts to shut down Soribada are misguided. Unlike Napster, Soribada doesn't use centralized servers and should therefore be considered a lawfully operating software company, rather than an illegal service company, Yang says. While he acknowledges that some Soribada users may access the site simply as a way to get free music, he says that many others sample new music on the site and then go out and buy it.

Yang also argues that the Korean record industry lacks "any tangible evidence" linking an alleged drop in sales to Soribada, describing the RIAK's numbers as inconsistent and unreliable. He adds that any dip in the number of local music retailers is most likely the result of smaller stores closing due to increasing competition from larger retailers.

Taking a page from the Napster playbook, Soribada met recently with record industry executives to pitch a plan under which the website would switch to a fee-based service that would make payments to copyright holders. "This is a great chance to create a digital music market in Korea," Yang says, noting, however, that "We had a couple of meetings and their attitude was 'shut down and we'll talk later'."

While the record industry wants Soribada to cease operations, the Korea Music Copyright Association, a trade group representing local songwriters, says it is willing to hold talks on Soribada's plans for a pay service.

But even if Soribada reaches a mutually acceptable arrangement with the songwriters' group, Yang concedes it won't be able to proceed with a fee-based service without the consent of the recording industry, which is in no mood to negotiate, particularly after having made headway in recent years against local manufacturers of bootleg recordings.

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