“BTS’s Jungkook makes history as the First K-Pop Solo Artist to Reach 3 Billion Streams on Spotify in 2024.”
A key measure of a K-pop artist’s international popularity is their streaming count on Spotify. With over 30% of the global music streaming market share, Spotify wields considerable influence in the music industry.
However, in South Korea’s competitive music landscape, YouTube Music (7.53 million monthly active users) and Melon (6.93 million) dominate, while Spotify trails with only 820,000 users.
What factors contribute to Spotify’s challenges in securing a significant market share in South Korea?
Founded in Sweden in 2006, Spotify began as a startup that transformed music consumption from illegal downloads to a legal format during a time of rampant piracy, fueling the growth of the popular music market.
A cornerstone of Spotify’s success has been its free streaming service. Much like watching YouTube, users can enjoy music with occasional ads. However, this model limits users’ ability to select specific songs. For those who prefer an uninterrupted experience, a paid subscription is available.
Upon entering the South Korean market, Spotify controversially decided to eliminate its free service. This choice appears to stem from the country’s unique copyright payment structure. Spotify assessed that it could not generate sufficient revenue solely from ads under local copyright regulations.
There is ongoing controversy surrounding Spotify’s practice of paying creators lower royalties to maintain its free service in other markets.
Taylor Swift has been vocal in her criticism, saying, “All I can say is that music is changing so quickly, and the landscape of the music industry itself is changing so quickly, that everything new, like Spotify, all feels to me a bit like a grand experiment.”
Spotify’s ability to sustain a free service elsewhere is attributed to a win-win arrangement with creators. Artists often accept lower royalties initially to gain visibility on the platform, hoping to generate revenue through concerts and other performances later.
Recently, reports indicated that Spotify is exploring the possibility of reintroducing a free service in South Korea. However, the company has struggled to agree with local copyright organizations. Due to its service model not aligning with the South Korean music industry structure, Spotify continues to face challenges in gaining significant market share in the country.