Why Spotify Is Failing in South Korea
Spotify launched in South Korea, February 1st 2021. Despite the initial hype, not much has changed in the streaming market of South Korea.
Spotify had finally arrived in Korea after a long await. A few of my friends had been using Spotify by downloading a VPN service and downloading it using the VPN. On and on they would compliment Spotify’s recommendation algorithm and how it would continuously spit out good music like magic. Naturally, I became excited when Spotify announced they were coming to Korea and you could download and use it with ease.
About 2 months has passed from the initial arrival and at the current state, its hard to say if Spotify is having an impact on the streaming market at all. No one seems to be using it to consume music and ‘Melon’, the number 1 streaming app of South Korea continues to be dominant. So why hasn’t Spotify getting the spotlight it is receiving everywhere else in the worl
- Lack of Content
Music streaming services, unlike video streaming services, all seem to have similar music content. The music Spotify has, Melon or Genie music, which are the #1 and #2 music streaming apps of Korea, probably have as well. Currently, Spotify actually has a bit of a lack of Korean music and this can be an extreme drawback to many Korean music consumers. In the case of video streaming, you can see that there are some TV shows or movies that are explicit to one service such as the Marvel TV shows on Disney Plus. However, this isn’t the case for music streaming apps and seeing that Spotify actually has less content compared to other apps, its hard to recommend your friends to use it currently.
2. Forced to Create a New Playlist
Even if there were a wide variance of content between music apps, I don’t think it would be a strong enough incentive for someone to change his/her music streaming app. A lot of users put in a lot of time and effort to create good playlists for their music apps and also save albums or artists they want to hear later on. Switching apps means you have to create a whole new playlist from scratch and I don’t think people have a strong enough motive to do so currently.
3. Its Just Too Expensive (in Korea)
There are 3 main telecommunication companies in Korea. SKT, KT, and LG Uplus. If you have a smartphone, you are almost 100% going to have a contract with one of these 3 companies. These telecommunication companies actually give you a discount on music streaming apps if you are using their services. For example, if you are using KT or LG, you can get a pretty good deal for the music app ‘Genie’. Spotify doesn’t have any of these partnerships.
In addition, another one of Korea’s music apps, Bugs Music, provides similar services but at a price that is much cheaper than Spotify. Bugs however doesn’t have a partnership with a telecommunication company but still provides their services at a much cheaper price. Seeing music services are a subscription and you have to keep paying, its hard to choose a service that is more expensive than its very similar competitors.
So What Should Spotify Do?
Do whatever they can to give consumers a taste of their app and algorithm.
What I feel is vital for music recommendation services is for people to actually try out their service. If you have a good enough system, you have a high chance of getting them hooked. In the case of Spotify, they have one of the most advanced recommendation systems in the world and I’m sure consumers will appreciate it. However, the main problem is people aren’t using the service at all. In other words, nobody seems to want to change their music app. Most of my friends have been using the same streaming service for 6–7 years.
So what Spotify needs to do is try and get anyone to use their service for a certain period of time. Once people find out how good their recommendation system is, it will hard for them to switch to a different app. And if this leads to people starting to curate their own playlists on Spotify, they’ll be completely locked in.
Currently Spotify is doing a promotion where you can use the app for 3 months, free-of-charge. But that clearly isn’t enough. They need to concentrate more on marketing in such ways as giving people free coupons of using Spotify when they buy a particular product. For example, they could team up with phone companies so if anyone buys a phone, they will be given a coupon to use Spotify for 6 months for free. 6 months is a sweet deal and since people will be downloading apps on their new phone, they might just decide to download Spotify and use their free coupon.
Not much time has passed since Spotify first arrived in Korea. I’m sure they have a lot more planned and I’m truly curious on what strategies they’ve built to widen their user pool.
