Reigncom, the company behind iRiver music players, and SM Entertainment, one of South Korea's largest music labels, plan to merge their respective online content stores, the two companies said Thursday.

Reigncom's Yurion unit operates the Funcake online music store, and SM Entertainment's Fandango Korea runs the ILikePop online music store. They will be combined to create a single company with a catalogue of 1 million songs and a combined user base of up to five million people, the partners said.

The new company, which has yet to be named, will operate in South Korea and elsewhere. Initially these are likely to be nearby territories in Asia, including Japan, China, Hong Kong, Singapore and Taiwan, they said.

The companies are hoping they can capitalise on the current popularity of Korean music and entertainment. The so-called "Korean Wave" has swept over Asian countries in recent years and introduced millions of people to Korean entertainers who were previously unknown outside of their native country. SM Entertainment is the music label behind some of the hottest Korean music acts including BoA, Shinhwa and HOT.

Earlier this year Reigncom and Singapore's Soundbuzz agreed to provide content from their respective online music stores to each other. Soundbuzz, which has a catalogue of around 300,000 mainly Chinese, Korean, Japanese and Indian songs, would offer Funcake content to its users while Funcake would make available Soundbuzz music in South Korea. Thursday's deal between Reigncom and SM Entertainment won't affect that relationship, Kim said.

In South Korea songs typically sell for around 500 won ($0.48) while some music, including some foreign songs, sell for about 800 won, Kim said.