Content Business Marginalized
Samsung Electronics has reorganized the Media Solution Center (MSC) six years after its creation. Originally, it was established to operate as a Korean version of the App Store. But the company announced on Dec. 10 that it will dissolve the organization.
On the same day, Samsung revamped its organizational structure by breaking up the MSC in charge of content and services, and the Global B2B Center responsible for B2B businesses.
The MSC was created in June 2008 to strengthen the content business. The organization was in charge of providing content to Samsung phones and developing apps. It expanded its business by staring Samsung Hub, Samsung Apps, ChatON, Group Play, and the e-book and video content businesses.
However, the content business has not been as successful as the hardware business. Moreover, the worsening performance of the smartphone business arising from the increasingly saturated market forced the company to speed up the break-up process. There was a marked difference between the software-based company and the hardware-centered firm. Most of all, the content business needs consistent investment and time. Six years could be long for some businesses, but short for others.
The break-up of the MSC does not mean that Samsung will abandon its content business. The company wants to expand the business in collaboration with other companies rather than creating its own content.
In fact, Samsung is reducing its service for the content platform Samsung Hub. Samsung Hub is a multi-media content store for mobile devices where people can search and enjoy music, e-books, games, and educational content. The company has decided to close Samsung Books and Samsung Video in December of this year. Instead, it is planning to provide services to customers in partnership with other companies.
Samsung Music, which started in November 2013, already discontinued its service in other countries, starting in July of this year. Milk Music, which is well received by consumers, obtains digital music files from other service providers. The free streaming Internet radio service does not belong to Samsung Music.
Some lament the dissolution of the MSC, since a complete digital ecosystem can be built through the growth of content business, in tandem with the success of the hardware business. A Samsung official said that the company is planning to put the wireless business unit in charge of expanding the software and content areas.
Making Bid for Mobile Platform Business
Meanwhile, the most noticeable strategy in the overhaul of its organizational structure is to place a team responsible for developing the Tizen operating system (OS) in the consumer electronics division or the information technology & mobile communications division. Samsung's move can be interpreted as reflecting its willingness to grow Tizen OS as a successful platform by applying it to individual needs by product. In the past, Tizen OS was developed first, and products were accommodated accordingly.
After the launch of the Tizen-powered Gear S, Samsung is accelerating efforts to build an ecosystem for the Tizen OS, while expanding the use of the OS to not only mobile devices but also other consumer electronic products like TVs and refrigerators. Through this strategy, the company is likely to pursue the convergence of IT devices with household appliances to adapt to the Internet of Things era.