In 2021, Spotify has expanded the geography of its presence through several dozen countries. Among them was Korea. In the Korean market, there was by this time a well-established rating system for music streaming services. In terms of rankings, 1st place belongs to Melon, 2nd place to Genie Music, 3rd place to YouTube Music, 4th place to Flo, and 5th place to Naver Vibe.
Spotify caused a huge backlash and panic among old-timers in the Korean music streaming market. And this is not surprising, because it is the Swedish green giant that has long and confidently been the leader of the global music streaming market, occupying a share of about 35%. Wouldn’t it be reasonable to say that Apple and Amazon are among the many companies that have lost in a one-on-one match with him? Today, Spotify has over 380 million users worldwide.
The history of Spotify dates back to the early 2000s. The recording industry was going bankrupt. Napster, an American online music file sharing service that operated from 1999 to July 2001, also played a role. As music file sharing technology developed, the public began illegally copying audio sources from CDs and illegally sharing them. Even in Korea at that time, there were several exchange programs where you could download music for free.
Swedish developer Daniel Ek, then in his early 20s, was very unhappy with these illegal downloads. Now he felt the need to create a platform for legal and free music listening. Instead of changing the behavior of the public, accustomed to lawlessness, he thought about how to change the way music was distributed.
However, Spotify faced fierce resistance in its early days. It was hard for record companies and artists to come to terms with the fact that music was provided for free.
However, Spotify eventually excelled at free streaming. People who listened to music through illegal music sharing sites were willing to pay membership fees in line with the goal of “helping rights holders”. It has been estimated that Spotify changed the paradigm of the music market because even advertising revenue was shared among creators.
In particular, the positive thing about Spotify is that it has an algorithm that works “biased” against the music of small record companies and independent artists. For this reason, it also serves as a gateway for new artists to be discovered through curation.
It is expected that a significant proportion of Korean users will either leave domestic music streaming services and join Spotify, or simply choose it as their second or third music streaming service. In any case, the ratings and revenues of Korean music streaming platforms could drop significantly. So far, judging by the statistics, Spotify is ranked seventh in the Korean music market. But this green Swedish giant is not one of those companies that can be satisfied with the second, and even more so the seventh place in the ranking, albeit national.