[이슈IN]Spotify wins’Strength Competition’, got Kakao Entertainment’s sound source

Is Spotify’s precipitation through? On the 11th, Spotify and Kakao Entertainment (hereinafter referred to as Kakao Entertainment and formerly Kakao M) said, “We have concluded an agreement on the renewal of global music licensing.” As the two companies’ “struggle competition” ended in 10 days, it was possible to listen to the music of Korean singers distributed by Kakao Entertainment on Spotify services around the world, including Korea.

Earlier, Spotify started its service in Korea on the 2nd of last month. Kakao Entertainment was distributing music through Spotify in the global market excluding Korea. However, when Spotify entered Korea, it is known that Kakao Entertainment showed a lukewarm attitude toward domestic distribution contracts. Kakao, the parent company of Kakao Entertainment, is operating’Melon’, the largest music streaming service in Korea. For this reason, the interpretation that Kakao Entertainment, which dominates the market share of 37.5%, is refusing to supply sound sources to contain Spotify, weighed on the interpretation. Apple Music, which landed in Korea before Spotify, also failed to sign a contract with Kakao Entertainment.

Spotify also has a’match-fire’. As of the first day, it has been announced that Kakao Entertainment will stop supplying sound sources. An explanation continued that the two companies had different opinions on the terms of the renewal of the contract. At the time, Kakao Entertainment explained that “the overseas contract has expired in accordance with the Spotify policy that international and domestic contracts must be carried out at the same time.” Although Spotify requested to sign a contract’together’ for domestic and overseas music sources, it is read as meaning that Kakao Entertainment did not accept it. However, Spotify denied that “overseas licensing contracts have nothing to do with the launch of Korean services,” and “we have been negotiating for a year and a half.”

The breakdown of negotiations doesn’t seem to have benefited Kakao Entertainment either. This is because Spotify accounts for about 40% of the world’s music streaming subscription services. There were also protests from fans around the world. They complained of inconvenience by engaging in hashtag campaigns such as’#SpotifyKakaoM’ and’Kakao M OUT’ through social network services (SNS) such as Twitter. Epik High’s Tablo also strongly criticized the situation, saying, “Why do artists and fans suffer when companies prioritize greed over art?” Some artists have also changed distribution companies. The Blue House National Petition even posted an article titled’Please make a law to prevent monopoly in the music distribution industry for K-pop’.

After 10 days, the two companies narrowed their disagreements and signed a contract, and fortunately, this situation ended with’Happening’. Spotify said, “We are now able to provide the music of Kakao artists to fans around the world and more than 345 million Spotify listeners in 170 countries. We will continue to strive to have a positive impact on the streaming ecosystem.” Kakao Entertainment also said, “After negotiating a contract for music distribution with Spotify, we have decided to resume supplying music to global services including Korea.” Kakao Entertainment also said, “Kakao Entertainment will continue to protect the rights of creators and promote the growth of the Korean music industry. We will do our best to create a stable creative ecosystem.”

Meanwhile, according to data on’Mobile Index’, a mobile big data platform, Spotify’s daily active users (DAU) share at the end of last month was only 0.5%. As Spotify secures Kakao Entertainment’s sound source, attention is focused on whether it can increase its presence in Korea. An industry official said, “We have succeeded in supply and demand for music, but there is no free playback option in Korea, and price competitiveness is low, so the use experience will eventually become a key factor.” “The fact that competition on the same line became possible is positive for the domestic music system ecosystem.” Said.