Sweden-based audio streaming platform Spotify is poised to enter the South Korean digital music market worth 1 trillion won ($880 billion), according to the Electronic Times on March 18.
The local media report cited anonymous sources in the industry noting that the Swedish firm has initiated negotiations with copyright collectives to discuss the distribution rates of contents. Some Apple Korea employees have also already signed on to join Spotify Korea.
“The demand for K-pop music is increasing worldwide and at the same time it probably wants to increase paying users in Korea,” an unnamed source was quoted as saying.
Spotify has reportedly suggested a royalty rate of under 65 percent. Starting from this year, Korea raised right holders’ royalty share from digital-music services to 65 percent of the total revenue from the original 60 percent, while lowering the portion for music platforms to receive 35 percent, down from 40 percent.
Launched in 2008, Spotify is the world’s largest music streaming platform having 197 million users with 71 million paying members. The company, listed on the New York Stock Exchange, recorded sales of 4 billion euros ($4.53 billion) last year but is still in the red.
It made a foray into the Asian market in 2013 by debuting in Hong Kong. Its service is now also available in Japan and Malaysia.
The launch of Spotify might heat up competition among digital music platforms here, according to industry watchers. In Korea, Melon owned by Kakao dominates the domestic digital music market with 45 percent market share, followed by KT’s Genie Music with 23 percent, according to market research firm Korean Click.
By Park Ga-young (email@example.com)