As many blogs and tech news sites have reported the IFPI, or the International Federation of the Phonographic Industry has released a new report on the state of the worldwide music industry. This new report sheds some light on the current trends and gives us some ideas on what to expect from the future. The Industry grew 40% in 2007 and increased its market share in the complete music business from 11% to 15% of the industry.

When focusing on Korea, we find that Korea is the first market in where digital music content values surpassed that of physical, and at this moment digital represents around 60% of the industry. Korea is considered the 4th biggest digital music market in the world after the US, Japan and the UK. In Korea, 63% is from online activity and 37% from mobiles.

Some of the larger players in this market are locals Melon, owned by SK Telecom, and Dosirak, owned by KTF. These are the familiar players in most telecom, media and technology markets. As the digital music market report states, Korea is one of the best examples of potential for the digital music business and for any other digital media in general.

Recently at my company Veyond, we have hired an intern from Mexico, and he constantly points out many of the differences between Mexico and Korea in terms of telecom, media and technology. This makes me think again about many of the advantageous things that my country, Korea, has achieved in terms of technology.

My thoughts don’t stop here, but are still extended further into thinking about some of the reasons why we have advanced to this level. One factor that we inevitably run into every time is the government. For those unfamiliar with the Korean market, the government here has successfully coordinated efforts in R&D for many years, through agencies such as the MIC and ETRI. It has played a central role in bridging coordination problems, and given direction to technological advancements in the country.

There is some uncertainty now, given that there are some indications that at least in the TMT sector, the government’s role may be changing, given that the new administration is looking to change the structure of governmental agencies related to the TMT sector. How and to what extent this will affect the future of IT in Korea is still to be seen, but for anyone wanting to understand the Korean market, or take insights from Korea to apply to other markets, the government’s role must be well accounted for.

Two Korean companies are scheduled to offer free internet security programs that include real-time scanning. On one side we have the owner of the Korean search engine giant, Naver, through their parent company NHN Corp. in partnership with Ahn Labs have developed a program named PC Green which will be released in April.

On the other side, a smaller company, Altools, has developed a program named ALYAC with similar features. Altools is also a Korean company that has developed other free software applications. NHN definitely has an advantage in respect to Altools given that they can distribute their product through Naver which runs around 70% of the searches in Korea.

The mass availability of different software at increasingly low, or at non-existent prices. The tendency towards free anti-virus programs seriously threatens the internet security industry, and is certainly a sign of restructuring in said industry, therefore giants like Symantec and McAffee should be alert on what’s going on here in Korea.