Playlists will be essential to attract home subscribers and help Spotify face up to established streaming rivals, as well as drive fans away from still popular physical formats, says the company’s global music co-director. Jeremy Erlich.
“We know that we are arriving as a new player in the city and all the success that we have had around the world does not really mean much, once we enter the field,” said Erlich Advertising panel. “We need to win internally and we need to support local culture and local artists.”
After launch, Spotify will exercise most of its domestic efforts on the global K-pop phenomenon – and with good reason. Over the past six years, Spotify listeners have broadcast more than 180 billion minutes of K-pop, with K-pop participation increasing by more than 2,000% over the same period, the company says.
With Spotify’s customer base now at 320 million monthly active users and 144 million subscribers worldwide, according to its third quarter 2020 financial results, the company is betting on Korea’s biggest music export to grow further more in popularity as K-pop reaches new audiences.
“We don’t want to focus on K-pop only, although that is the most visible part of [Korean music] culture, ”says Erlich. “We really want to help artists at all levels of the ecosystem.”
Despite its late market entry, South Korea is seen as a key territory for Spotify and brings the total number of markets in which it operates to 93. Last July, the music streamer added Russia, 12 countries from Central Europe and India in 2019.
Conquering Asia’s second music market (after Japan) won’t be easy for Spotify, 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-dominated physical formats still account for 36% ($ 223 million) of purchases , partially driven by high demand for K-pop collectibles.
To win their own slice of the pie, Spotify installed a “small but powerful” team of local editors and artist relations staff in the South Korean capital of Seoul, headed by the managing director David Park, who previously worked as a creative strategist and YouTube content manager in Asia. Additional support will come from Spotify’s Asia office in Singapore and its global team in the United States, where Erlich is based.
The price will be set at 10,900 South Korean won (about $ 9.74) plus VAT per month for premium subscribers, and 16,350 South Korean won ($ 14.62) plus VAT for your dual plan. After launch, Spotify is not offering South Koreans the freemium ad-supported model it traditionally uses to attract new subscribers.
“We want to be a significant and important player in the market,” says Erlich, refusing to discuss licensing negotiations. He says the company waited too long to launch in South Korea because “we wanted to do it right”. South Korea, he says, “is obviously a mature market. There are incumbent actors, and we respect them, the local culture and the local dynamics, so it takes time. “
Erlich is confident that Spotify offers “something different” for its established rivals and when local users and musicians have a chance to use their artist discovery tools for themselves, they will see “how we can help your music grow, both in Korea and outside Korea. “
“For those [artists] who have a global mindset, having all the power of the Spotify network behind them will only help increase your audience, ”says Erlich.
He points to the existing popularity of K-pop artists like BTS and BLACKPINK on Spotify’s global charts as evidence of how the platform can help develop the career of artists far beyond their home market. And he believes that many other Korean acts, spanning multiple genres and not just K-pop, can 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 these numbers, I think you will see the visibility of Korean culture around the world expanded.”