Spotify, “Netflix Of The Music Industry”, Struggles In The Korean Market… 2 Years In, Still At 1% Market Shares
It has been two years since Spotify, the world’s largest music streaming service, entered the Korean market, but its market share remains in the low 1%. Late entry into the market after local music streaming companies had already dominated, conflicts with music distribution companies, and expensive subscription plans compared to overseas markets have all contributed to a lack of consumer interest in Korea. Spotify is now making efforts to target the Korean market by introducing more affordable subscription plans.
According to industry sources on the 21st, Spotify recently issued a press release in commemoration of its 2nd anniversary in the Korean market, stating that “Spotify has had a significant impact on the global spread of K-Pop.” Since the launch of the Korean service, the number of users accessing the ‘K-Pop Hub’ within Spotify has increased significantly. The playlist ‘K-Pop ON!’ has been played more than 700 million times and has over 4.5 million subscribers. Other playlists, such as ‘Korean OSTs’ (1.4 million subscribers), ‘Trendy K-R&B’ (820,000 subscribers), and ‘In the K-Indie’ (420,000 subscribers), also have a significant number of subscribers.
However, its market share in Korea still remains relatively low. Spotify entered the Korean market in February 2021. According to the daily user rankings analyzed by mobile analytics service provider, Mobile Index, the top 5 music streaming platforms in Korea are Melon (29.7%), YouTube Music (20.2%), Samsung Music (19.6%), Genie Music (13.5%), and Flo (7.7%). Naver Vibe (3.3%) and Kakao Music (1.8%) followed, and Spotify (1.7%) was tied for 8th place with Bugs Music.
Many people anticipated that the arrival of Spotify in Korea would cause a significant change in the domestic music streaming platform market. However, the service was launched late, with Korea ranking 93rd in the global release timing. In the early stages, the lack of securing domestic music content was also cited as a cause of the failed landing. Initially, music providers such as Kakao Entertainment, Genie Music, Bugs, Danal Entertainment, and Dreamus Company suspended the supply of music to Spotify due to friction in music distribution negotiations.
An industry official explained that “consumers tend to continue using the platform they first used,” saying, “they continue to use the music platform provided for free when purchasing a smartphone, even after it becomes paid.” The official also stated that “with other alternatives such as Melon and YouTube Music firmly established, Spotify needs to increase its market share by offering even higher benefits for its pricing plans or making various attempts to differentiate its existing services.”