Korean Karaoke Machines a Hit in Japan

TJ Media, a Korean karaoke machine manufacturer, made an agreement last month with Daiichikosho, the number one karaoke company in Japan, to provide 100 billion won worth of products until 2007.

One machine costs 850,000 won, and nearly 120,000 sets of machines will be sold to Japan.

Lee Dong-seop at TJ Media said, “There is a high possibility that in two years, all karaoke machines in karaoke bars in Japan will be made in Korea.”

Korean karaoke machines are being exported to Japan, the motherland of karaoke, and dominating the market.

Korean companies are poised to take over the market for home as well as business karaoke machines in Japan, a country that dominates karaoke machines market worldwide.

Korean machines in the Japanese market-

Enter Technology Corporation, which makes portable karaoke machines, has earned 76 billion won so far since it entered the Japanese market in October 2000. The portable product, which carries all the functions of a regular set top box karaoke machine in a microphone, caused a sensation in Japan, and takes up about 40% of the household karaoke machine market.

TJ Media, since 2002, has exported 90 billion won worth of electronic song indexes through Daiichikosho. The electronic song index is a component which enables one to find songs on the screen without having to look through a song book.

Under an exclusive contract with SK Japan, TJ Media has supplied 150 thousand units of wireless microphone karaoke machines since June. Another company, Koritech, made an agreement with Sanyo T&S last month to provide 300,000 units of portable karaoke machines a year.

Better prices, better technology -

The size of Japan’s karaoke machine market (including music content) amounts to about one trillion won a year. Add on the household karaoke machine market and that amount grows to about 1.7 trillion won.

The reason that Korea’s machines are able to lead this market is that their prices and technology are competitive.

Daiichikosho, the company that has a contract with TJ Media, originally bought Yamaha’s karaoke machine. However, one unit costs 700 million won: too expensive to sell to the public.

TJ Media’s unit costs 850 thousand won, only about 1/9 of Yamaha’s, but no less functional. Therefore, Daiichikosho opted to work with TJ Media.

Enter Tech was able to succeed with its innovative ideas and technology. It broke the stereotype that a karaoke machine had to be used at home, and made a microphone-shaped portable machine. This was possible because of their semiconductor integration technology, which enabled the company to compress karaoke functions and musical content into a small machine.

Need for continuous R&D–

If Korean karaoke equipment manufacturers are to continue their success in the Japanese market, they need to achieve product stability. Japanese consumers tend to choose other brands if a product of a brand malfunctions in any way, so it is very important to maintain a continuous, high level of quality.

R&D is continuously needed to make a differentiated karaoke machine.

Jeong Jae-ho, the head of the company’s planning division of Enter Tech, said, “Consumers are increasingly demanding machines that play realistic, high quality music, and at the same time machines that are small and sophisticated. Continuous efforts are needed to meet these demands.”

Sang-Rok Lee myzodan@donga.com