Spotify Launches in South Korea

The playlists will be critical to attracting domestic subscribers and helping Spotify take on already established streaming rivals, as well as weaning music fans away from still-popular physical formats, says the company’s global co-head of music, Jeremy Erlich.

“We know we’re coming in as a new player in town and all the success we’ve had around the world doesn’t really mean a tremendous amount once we get on the ground,” Erlich tells Billboard. “We need to win domestically, and we need to support local culture and local artists.”

Upon launch, Spotify will exert most of its domestic efforts on the global phenomenon of K-pop — and with good reason. In the last six years, Spotify listeners have streamed more than 180 billion minutes of K-pop with the share of K-pop listening increasing by more than 2,000% in the same period, the company says.

With Spotify’s customer base now standing at 320 million monthly active users and 144 million subscribers worldwide, according to its third quarter 2020 financial results, the company is banking on Korea’s biggest musical export to further grow in popularity as K-pop reaches new audiences.

“We don’t want to be just focused on K-pop, although that’s the most visible part of [Korean music] culture,” Erlich says. “We really want to help artists at all levels in the ecosystem.”

Despite its late entry into the market, South Korea is seen as a key territory for Spotify and brings the total number of markets it is active in to 93. Last July the music streamer added Russia, along with 12 Central-European countries, and India in 2019.

Cracking Asia’s No. 2 music market (after Japan) won’t be easy for Spotify, though, and will see the platform compete for listeners with South Korea’s leading streaming service Melon, as well as other established domestic players like Naver Music, genie, m-net and Bugs. YouTube and Apple Music are also active in the thriving music market, which grew 8.2% in 2019 to $619 million, according to IFPI figures. More than half of that total came from streaming, which now accounts for 53% ($329 million) of all recorded music sales in South Korea, while long-dominant physical formats still make up 36% ($223 million) of purchases, partly driven by high demand for K-pop collectables.

To carve out its own slice of the pie, Spotify has installed a “small but mighty” team of local editors and artist and label relations staff in the South Korean capital of Seoul, headed by managing director David Park, who previously worked as a creative strategist and content manager for YouTube in Asia. Further support will come from Spotify’s Asia office in Singapore and its global team in the U.S., where Erlich is based.

Pricing will be set at 10,900 South Korean Won (around $9.74) plus VAT a month for premium subscribers, and 16,350 South Korean Won ($14.62) plus VAT for its duo plan. Upon launch, Spotify is not offering South Koreans the freemium ad-supported model that it traditionally uses to tempt new subscribers.

“We want to be a significant and important player in the market,” says Erlich, declining to discuss licensing negotiations. He says the company waited a long while to launch in South Korea because “we wanted to do it the right way.” South Korea, he says, “is obviously a mature market. There are incumbent players, and we respect them, the local culture and the local dynamics, so we took our time.”

Erlich is confident that Spotify offers “something different” to its established rivals and when local users and musicians get a chance to use its artist discovery tools for themselves, they will see “how we can help their music grow, both in Korea and outside of Korea.”
“For those [artists] that are globally minded, to have the entire power of the Spotify network behind them will only help grow their audience,” says Erlich.

He points to the existing popularity of K-pop acts like BTS and BLACKPINK on Spotify’s global charts as evidence of how the platform can help grow artists’ careers far beyond their home market. And he believes many more Korean acts, spanning multiple genres and not just K-pop, stand to benefit from Spotify’s entry into South Korea.

“We can already see how big Korean music is globally on Spotify,” says Erlich. “When you add domestic consumption to those numbers, I think you’re going to see the visibility of Korean culture throughout the world amplified.”

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