SEOUL, Sept 26 Shares of local entertainment platforms nosedived this week soon after Samsung Electronics announced a new free music streaming service to go with its flagship smart devices, but an analyst report said Friday such impact will be fleeting.
The world’s No. 1 maker of smartphones said Wednesday it will introduce “Milk” to go with its newest smartphone, the Galaxy Note 4. The application also works on previous Galaxy models as well.
Soon after the announcement, investors offloaded shares in music distributors listed on the secondary bourse, in fear that the tech giant will eventually eat into their market shares.
Loen Entertainment Inc., which operates the country’s largest music retail platform Melon that commands 24 million users with 3.1 million songs, crashed 14.96 percent on Thursday, virtually to the daily permissible limit of 15 percent.
KT Music Corp., operator of Genie, plunged 14.97 percent, and Neowiz Internet Corp., which owns the Bugs platform, also fell sharply by 6.67 percent to 15,400 won.
Analysts said, however, the trend will continue only for a limited time, and that the plunge is exaggerated, as Samsung’s Milk is fairly different from existing platforms in characteristics.
Milk provides some 3.6 million songs free of charge on a streaming basis for users and does not require a separate account.
But unlike with existing music distributors, users cannot add a specific item to their playlist and instead must subscribe to a number of stations that recommend songs. Users can skip through the random recommended songs until they find a song they like.
Downloads are available for purchase.
The stations come in different varieties. For example, if a user selects “Idol,” the category divides into girl groups, boy groups, entertainment agencies such as SM Town and JYP Nation, and specific singers.
“Radio-style streaming service limits users’ choice for songs,” said Jung Soo-hyun, an analyst at NH Investment & Securities Co. “Users still have to turn to other services to listen to the music they prefer.”
“Also, the price burden for charged music services is not that high. Given mobile carriers’ promotions, an average amount of 4,858 won (US$4.66) per month will allow users to enjoy unlimited downloads or streaming,” Jung added.
Local platforms can run both on smart devices and personal computers, but Samsung Milk runs only on Galaxy products, limiting its use.
Milk was launched in cooperation with Soribada Inc., while the U.S. version is powered by Slacker Radio.
Samsung launched Milk first in the U.S. in March. It said the U.S. edition marked more than 4 million downloads over the past six months.
