YouTube rolled out a low-priced plan without music service under pressure from the Korea Fair Trade Commission's tying sanctions, but there has been no clear change in the domestic music market landscape. On Jan. 30, "YouTube Premium Lite" officially launched, offering an option without music service, but no outflow of existing YouTube Music users was detected. Instead, overseas platforms such as Spotify expanded their market share, while homegrown platforms such as Melon and Genie Music continued to see a decline in users.
According to the app statistics analysis platform Mobile Index on the 4th, YouTube Music's monthly active users (MAU) in February this year totaled 7,876,419. That was down 2.7% from 8,095,911 the previous month, but considering February's shorter days and the variable of the low-priced plan launch, it is interpreted that the existing user base was effectively maintained. Compared with March 2021's 3,341,343, the figure has increased to about 2.3 times, and it also rose by more than 600,000 from 7,241,420 in the same month a year earlier.
YouTube Music's dominance was even clearer in the daily active users (DAU) metric, which shows usage intensity. The average daily users in February were about 2.84 million, up by around 50,000 from about 2.79 million in January before the plan's launch. Even though the low-priced plan created an environment where users could exclude the music service, actual usage did not decline.
Spotify, on the other hand, continued a clear upward trend. February MAU was 2,036,959, up 2.1% from 1,994,540 the previous month. It surpassed the 2 million mark for the first time since entering the domestic market. From 214,966 in March 2021, the user base has grown nearly tenfold in five years. Showing growth even in February, when the overall market contracts due to seasonal factors, it is interpreted to have absorbed both YouTube Music's potential churn and users leaving domestic apps.
Homegrown platforms did not reap any windfall gains. Melon's February MAU was 6,879,129, down from 6,958,879 the previous month. Genie Music fell from 2,914,147 to 2,796,564, dropping below the 2.8 million level. FLO came in at 1,857,772, falling below 1.9 million, while VIBE at 451,205 and Bugs at 278,087 also continued to decline.
This user decline is leading to business restructuring. On Jan. 15, NHN disclosed it would sell a 45.26% equity stake in NHN Bugs, the operator of the music platform Bugs, to NDT Engineering and others for 34.7 billion won. SK Square also moved to downsize its business by selling a significant portion of its controlling equity stake in Dreamus Company, the operator of FLO.
The industry sees the "lock-in" effect of overseas platforms as blocking a rebound by domestic operators. With preference data-based recommendation algorithms and global content distribution networks already in place, analysis suggests that merely tweaking pricing structures is unlikely to drive user migration.
A source in the music streaming industry said, "These days, users don't just listen to music; they consume it in connection with video and short-form content, so they compare the entire ecosystem a platform offers," adding, "Even if a simple low-priced plan comes out, it's hard for users already trained on sophisticated algorithms to return to domestic apps."