Melon, the homegrown platform that once led Korea's music streaming market, has yielded its user ranking to Spotify after YouTube Music. Early this year, the launch of "YouTube Premium Lite" raised the possibility of a rebound for domestic platforms, but in the end, foreign platforms such as Spotify expanded their share, and the decline in users of domestic platforms has continued.
According to market research firm WiseApp Retail on the 28th, Melon's monthly active users (MAU) last month totaled 5.93 million, falling to third place behind Spotify (6.22 million). YouTube Music ranked first with 9.49 million, followed by Spotify and Melon, then Genie Music (2.37 million) and Flo (1.67 million). Early this year, Melon's MAU was 6.07 million, outpacing Spotify (5.02 million) by about 1 million, but the rankings flipped in just a few months.
However, in tabulations by another market research firm, Melon still holds second place. According to app analytics platform Mobile Index, last month's MAU was YouTube Music 8.51 million, Melon 7.13 million, Genie Music 2.88 million, Spotify 2.38 million, and Flo 1.93 million. Because market researchers derive user numbers through sampling, results can differ depending on the sample composition each firm secures.
Spotify, which entered Korea in 2021, stuck to a paid-subscription-first strategy for its first three years and remained in fifth place among domestic music platforms. But after introducing the ad-supported free streaming service "Spotify Free" in Oct. 2024, users grew quickly, and in less than a year it overtook domestic platforms such as Genie Music and Flo. On top of that, it pursued aggressive marketing, partnering with Naver early this year to link Spotify subscription benefits to Naver Plus Membership, and last month it even surpassed Melon.
Domestic platforms continued to see user declines. Over the past year, Spotify's MAU increased by 2.33 million, while Melon fell by 440,000, Genie Music by 220,000, and Flo by 30,000. However, YouTube Music's MAU also dropped by 950,000 during the same period. Early this year, as YouTube responded to the Korea Fair Trade Commission's tying sanctions by launching the lower-priced "YouTube Premium Lite" plan without the music service, some users left, and a substantial share of them appear to have moved to Spotify.
Foreign music platforms have sharply increased users by leveraging price competitiveness and content scalability. Both YouTube Music and Spotify have pursued a strategy of acquiring users through ad-supported free services and then naturally nudging them to paid subscriptions. Global platforms also have a clear edge in content experience. YouTube Music offers songs and music videos on one platform, and Spotify is expanding its music video service. In contrast, domestic platforms remain centered on audio listening.
As user losses continue, the restructuring of the music platform business is gaining momentum. NHN sought to sell its equity in Bugs early this year, but the transaction fell through, forcing it to rework its business strategy. SK Square also sold a significant portion of its controlling equity in Dreamus Company, the operator of Flo, exiting the music platform business.
A content industry official said, "Music services are a zero-sum market competing for a limited user base, so aggressive marketing and price competitiveness are crucial," and added, "Foreign platforms effectively used free plans and partnership perks as they entered the domestic market."
The official added, "In particular, for younger users who value audiovisual experiences, the video-and-recommendation ecosystems built by YouTube Music and Spotify are creating a strong comparative advantage," and said, "Domestic platforms need to go beyond merely offering audio tracks and strengthen differentiated content and service experiences to maintain competitiveness."