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Will Spotify become a game changer in Korea despite its high price?

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The world's largest music streaming platform, Spotify, launched its service in Korea on Feb. 2. It is a latecomer to the Korean music market, where local platforms, such as Melon and Genie, have already competed fiercely to increase their shares of the market. Spotify has brought its highly personalized music recommendation service to the forefront to attract users, but the main talking point at the moment isn't the personalization ― it's the price.

In Korea, the Sweden-based company offers two monthly subscription plans ― Premium Individual (10,900 won, or $9.75) and Duo (16,350 won). However, an individual account is more expensive than most local alternatives, which are usually around 8,000 won. Although new listeners can try out Premium for free for some time if they choose to subscribe before the end of June, Spotify offers neither a free ad-supported subscription nor Premium Family options. The latter provides up to six accounts for family members under one roof at about 16,700 won per month.

The streaming giant apparently recognizes the issue but believes, given the different value it creates for customers, that its prices are reasonable.

"I hope people try out our service before evaluating it based on the price," David Park, managing director at Spotify Korea, said Monday during its first online press conference in Korea. "We set the price following a thorough examination of the local music industry. Premium Duo is an option that is not found in any other platforms, which enables an individual to enjoy Spotify by paying about 8,000 won a month."

There is another stumbling block. Spotify has not yet secured a deal with Kakao M, which distributes the music of big-name K-pop stars, including IU and Monsta X. This means users cannot appreciate these singers' songs on the platform at least for now. Kakao M operates Melon, which owns the largest market share (34.14 percent) here as of November.

"We are currently in talks with various partners," Park said. "Given that we add about 40,000 new tracks to our platform every day, we will be able to provide better service in the future."

In fact, Spotify offers more than 70 million songs and over 4 billion playlists to over 345 million user across the globe. Issra Omer, senior product manager at Spotify, explained during the press event that the streaming giant's personalized recommendation engine has played a pivotal role in attracting people.

"Spotify's personalized recommendation engine is not simply determined by a few tracks that a user listens to, but is an advanced technology that integrates with a combination of different factors, including analysis of global data accumulated over a long period of time," she said. "Our personalized recommendations take into account thousands of signals ― what you are listening to, when and which songs you are adding to your playlists, as well as the listening habits of people sharing similar tastes."

The company has ambitious plans, such as to introduce a podcast service in which local users will have access to numerous podcast catalogs around the world, and to create an artist platform named "Spotify for Artists."

"We will center on securing local podcast content in the short run and gradually secure original and exclusive content," Park said. "In the case of Spotify for Artists, it will allow the artists to look into various statistical analyses in real time, helping them enhance their understanding of listeners and fans. They will also be able to communicate with followers by sharing their personal music tastes and other information."

Wrapping up the session, Park said the company's goal is to grow together with the Korean market.

"We will do our best to contribute to the mutual growth of the Korean music market and provide a stepping stone for the artists to grow further," he said.




source: The Korea Times
Tags: economics, music, technology / electronics
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