Spotify and Kakao M fight over K-pop control
Back in early February, Spotify landed in Korea after years of anticipation only for fans to find out that music from artists like IU, MONSTA X and Zico were excluded from the platform. Just a month later, hundreds of K-pop releases have now been removed globally due to the ongoing disagreement between the streaming service and distributor Kakao M.
The hashtag #Spotify began trending Sunday morning along with several artists totally or partially removed off of the platform. The Spotify hashtag totaled at 1 million tweets by 10:40 a.m., with a growth of 150,000 tweets in 30 minutes. It was the №1 hashtag trending worldwide, tied with the company, Kakao M.
The fan base of removed k-pop stars has been active in voicing their unhappiness on social media and are canceling their subscriptions in bulk.
To understand this issue, it is necessary to take a look at the underlying strategy of streaming services here. Kakao M has their own streaming service ‘Melon’ and they are almost dominating the Korean music and streaming industry.
In 2016, Apple Music service arrived in Korea and sought a license of Korean music. They signed a music contract with three major agencies (SM, JYP, YG), but failed to get a contract from Kakao M. Kakao M insisted on the absurd allocation of revenue to protect Melon’s monopoly in Korea. So, Apple started the half-service by giving up the sound source of Kakao M, as of now its current share in Korea is a mess.
Back in 2021, Spotify launched a service in Korea. One of the compelling reasons customers in Korea preferred Spotify over Apple is it is much easier for Koreans to use overseas services through VPN than Apple Music. Spotify’s streaming service is free of charge, and if you know how to use VPN, you can use overseas Spotify to avoid the tyranny of Kakao M so of course, you’ll throw away Melon. When the official Spotify service starts and the official website of Korea is established and promoted, the advantages will become more known to people. It also means melon’s monopoly is faltering.
So Kakao M decided to block their music license in Spotify all over the world.
If you block the sound source on Spotify and leave Apple music open, users will leave to Apple Music and Spotify will be anxious and would want to negotiate the contract with Kakao M on favorable terms and maybe this is what Kakao M wants.
As of now, this seems like such a lose-lose situation because a lot of international listeners don’t listen to Melon, and it’s going to be harder for the groups affected to gain more international listeners (as Spotify is the leading international music streaming site with 130M subscribers and 286M listeners, next to being Apple Music with 70mil).
This impact is not only for fans but will also be felt by artists both famous and newcomers since many labels and artists use Kakao M as their distributor.
For the big 4 entertainment agencies: SM, YG, JYP, and BH there would be hardly any impact, but anything from a smaller label has a good chance of being gone. Under this licensing war: GFriend’s discography is mostly gone because Source distributed through Kakao M, not Big Hit.
Kakao M has for years enjoyed the monopoly of streaming music in Korea and Asia. No doubt healthy competition is good, it allows companies to unleash their creativity while providing maximum benefit to end customers. Maybe Spotify should ditch trying to sign a new contract (they’ve been trying to for 1.5 years though!), and just solidify their stand and position in Korea and get K pop artists and their labels to sign up to stream their music since they have a greater global presence than Kakao M., In the end, it will be Kakao’s loss. Take for instance US singer The Weekend who has over 2 Billion streams! and this is just one of the many US singers. Kakao M does not even come close.