While most companies are now clamoring to be associated with the K-pop industry, Spotify seems to be in the midst of distancing itself from K-Pop stars having removed hundreds of songs. The move came following the Swedish music platform’s dispute with South Korean entertainment company and music distributor Kakao M and comes just a month after Spotify’s entry into South Korea.
The disagreements emerged due to the fact that Spotify's existing licensing deal with Kakao M, one of South Korean's biggest music distributors, had come to an end. In a statement to MARKETING-INTERACTIVE, a spokesperson from Spotify said: "Spotify can confirm that starting 1 March 2021, Kakao M’s catalogue will no longer be available to our listeners worldwide due to the expiration of our licence. We have been working with Kakao M over the last year and a half to renew the global licensing agreement, so that their artists’ music would remain available to Spotify’s over 345 million listeners in 170 markets around the world. Despite our best efforts, the existing licensing deal we had with Kakao M (which covered all countries other than South Korea) has come to an end."
"The fact that we have not yet reached agreement on a new global deal is unfortunate for their artists, as well as for fans and listeners worldwide. It is our hope that this disruption will be temporary and we can resolve the situation soon. We remain committed to working with local rights holders including Kakao M, to help grow the Korean music market and overall streaming ecosystem together," the spokesperson added.
Meanwhile, Kakao M has shot back that the delay was caused by Spotify for switching its stance. A statement from Kakao M on South China Morning Post said that Spotify had previously asked for a separate agreement for the South Korean market, in addition to its existing global license. However it had since changed its stance and requested for a licensing agreement that merges both global and domestic markets. This, Kakao M added, extended its discussion, and the global licensing agreement expired before a both parties came to a consensus. Due to the timeline of agreement, Spotify as such removed artistes such as Mamamoo, HyunA and Monsta X, and various Korean hip-hop and R&B artists. A quick check by the MARKETING-INTERACTIVE showed that, at the time of writing, songs by these artistes are still available in Singapore.
What might be even more detrimental to Spotify however, is the fan base of these stars who have been active in voicing their unhappiness on social media and cancelling subscriptions in bulks. Many users are boycotting the streaming platform by cancelling their Spotify subscription. One netizen summed up what K-pop fans were feeling on Twitter with a tweet that said: "you can't take away my kpop and expect me to stay". Meanwhile, another netizen said: "I cannot live in a world without Kpop artists such as IU, Jesi and the likes, so I'm saying goodbye to Spotify and going to the lesser well known #Deezer who has the complete catelog [sic]. Bye!"
K-pop fans also stated their disappointment over the removal of their favourite songs. One Twitter user said he or she had a playlist with 23 hours worth of songs, but after the removal, the playlist is also left with five hours worth. Another netizen lamented: "I will not stop talking about this because it is just so disappointing and horrible. You guys literally took one of the biggest connections we as listeners had with the artists." Hashtags such as #BoycottSpotify and #SpotifyIsOverParty were also created from the situation.
The K-pop industry has often attributed its success to its extremely passionate fan base. In 2018, the industry was estimated to be worth US$5 billion and the global phenomenon has only grown. In 2020, The Straits Times reported that BTS single-handedly brought in US$1.5 billion with its song "Dynamite" for the South Korean economy. Additionally, each member of BLACKPINK is said to be worth over US$8 million. Beyond the usual support in purchasing of merchandise and tickets, K-pop fans are also known to be very defensive of their K-pop idols.
As such, the wrath of K-pop fans could leave Spotify in a tricky position a month into its entrance into the sixth-largest music market in the world and a critical one in its global expansion journey.
“We always want to be where the listeners and artists are, and South Korea is rich in both,” said Alex Norström, chief freemium business officer, Spotify during the launch previously. “This launch presents a massive opportunity for us to not only further our mission of bringing new and quality content to more audiences, but also help local Korean artists tap into Spotify’s 320 million listeners worldwide. We hope to create more opportunities for Korean artists across all genres to be discovered by listeners around the world.”
The statement also explained that South Korea was chosen as its next market as it is one of the most digitally-inclusive markets in the world, and also widely recognised as a cultural and music epicenter, in part due to the global phenomena K-Pop. Spotify added that since it first launched K-Pop playlists in 2014, the share of K-Pop listening on the platform has increased by more than 2,000%. With its launch in South Korea, Spotify said it plans to accelerate the growth of Korea’s entire music streaming ecosystem, benefitting creators, labels, distributors and fans.
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