By Jun Ji-hye
Genie Music, a KT affiliate, will complete its takeover of CJ Digital Music, Wednesday, seeking to challenge the top music streaming and downloading platform Melon operated by Kakao.
After the acquisition, KT, the second-largest mobile carrier, will maintain its largest shareholder position with a 35.97 percent stake, while CJ ENM, the parent company of CJ Digital Music, becomes the second-largest shareholder with 15.35 percent. LG Uplus, the third-largest mobile carrier, will become the third-largest shareholder with 12.7 percent stock.
Genie Music, currently the second-largest music streaming and downloading platform operator by monthly active users, expects the move to create synergy in the digital music service market as telecom firms' networks and cutting-edge technologies such as virtual reality (VR), and CJ ENM's content can be integrated.
Genie Music will take over distribution of sound sources and archives possessed by CJ ENM ― a task that has been conducted by CJ Digital Music.
This is expected to raise Genie Music's market share in the music distribution market, regarded as business-to-business, to about 35 percent from its current 13 percent. In principle, this will take Genie Music to the No. 1 position, beating Melon's 33 percent.
In the music services market, regarded as business-to-consumer, Genie Music's share is also expected to jump to 30 percent from its current 22 percent. But Melon's position in this area is solid with a 60 percent market share.
Genie Music is aiming to increase its number of users by utilizing subscribers of KT and LG Uplus with the goal of securing 5 million paid subscribers by the end of 2022.
To target the music services market, the company plans to actively utilize video content possessed by CJ ENM and enhance the visual platform powered by VR, which will allow users to enjoy 4D live streaming.
The firm is also considering releasing a music recommendation service powered by artificial intelligence technology to better match each user's preferences.
In August, Genie Music said it will build a new music platform based on high-end fifth-generation networks. The new platform will be based on KT's next-generation infotainment service "IVI Genie" currently under development.