[NEWS IN FOCUS] Can personalization really give Spotify an edge in Korea?

After launching on Feb. 2, Spotify has already topped the download lists on both the Apple and Android app stores in Korea and remains the top free music service on both lists as of Monday, with domestic leader Melon falling to second place.

Korea marked the service’s first regional launch of 2021 — the result of years of preparation to enter what it describes as the sixth-largest music streaming market in the world.

Spotify’s biggest strength is its personalized song recommendations, backed by its algorithm and massive database of more than 70 million songs.

Compared to leading Korean services that show charts of trending songs on the landing page, Spotify’s entire interface is centered on personalization. Users start the app choosing three artists of their preference and are delivered new playlists each week based on their listening habits.

At its first press event on Monday, Spotify Korea expressed confidence in its personalization technology, with regional director David Park saying “the only way to truly feel it is by experiencing it.”

And while Spotify’s confidence in personalization and its music library is not ungrounded, a big question remains in regards to its local success: Are these features enough to capture Korea’s mass audience?

Korean streaming apps are heavily focused on “top 100” trending song charts, dominated by popular local artists. To an audience that is so used to focusing solely on what's popular and trendy, recommending new songs from outside of Korea based on individual listening habits may not be that attractive.

Moreover, Spotify has not fully succeeded in closing an agreement with one notable music distributor: Kakao M. An affiliate of Melon, Kakao M has artists like IU and Zico under its wing and takes away a market share of around 30 percent in the country’s music streaming market. Domestic users of the Korean version of the Spotify app are still not able to access all of either artist's back catalogue.

David Park, Managing Director at Spotify Korea introduces the company's plans this year in an online press conference, Monday. [SPOTIFY KOREA]

“[Spotify] breaks the old concentration on music charts and constantly recommends users with new songs outside borders,” said Park. “It’s like having a personal DJ that knows music from all over the world. That’s the core value Spotify can offer.

“Of course, appealing to the masses will take a long time and Spotify is willing to put in long-term investment. But a platform where users can receive songs of their choice can become the dominant trend. And in that direction, Spotify too can be a streaming service for the mass here.”

Professor Hahm Yu-kun of business management at Konkuk University noted that while it is still important for Spotify to secure a mass audience, businesses that run on big data and algorithms often create new markets and customer needs that weren’t significant before.

“For Spotify, seeing the success of Netflix and YouTube here should have been motivating — these services all have a business model where users consume content, apply that to the algorithm and use that logic again to feed new content,” he said.

But even if a mass audience proves elusive, that isn’t the only reason Spotify has finally set foot in Korea.

The company wants to work closely with local artists. K-pop listening on Spotify has increased by more than 2,000 percent over the last six years.

Park noted that Korea is one of the few markets in the world with huge music exports.

“There’s definitely more room [for Korean artists] to grow globally and that’s the direction we want: To grow partnerships inside Korea and help Korean artists expand globally,” he said.

Spotify Korea announced Monday that it would be launching podcast services in Korea this year.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]