Korea is one of the most important markets for Spotify. K-pop is no longer music that only a dedicated fan base listens to, but has taken root as a mainstream genre that resonates around the world.
Gustav Gyllenhammar, vice president for market and subscriptions at Spotify, met with ChosunBiz at Anderson C in Seongsu-dong, Seoul, on the 10th and said, "Korea is a core strategic market that Spotify is focusing on." He said, "We will continue to invest in localization and marketing, and expand collaboration with Korean corporations to strengthen our footing in the Korean market."
Spotify is the world's largest music track streaming platform, used by 770 million people worldwide. Of these, paying subscribers recently surpassed 300 million. Among content streaming platforms, the only corporations with more than 300 million paying subscribers who pay a monthly subscription fee are Netflix and Spotify. It entered Korea in 2021.
Gyllenhammar, who leads Spotify's global subscription business, noted the impact of K-pop. He said, "K-pop has become mainstream music that is naturally included in major countries' users' playlists." Last year, royalties generated by K-pop on Spotify increased 31% from the previous year, and 92% of royalties generated by Korean artists on Spotify came from outside Korea. That means Spotify's K-pop-related streaming and revenue have also increased by that much.
He further assessed that as the influence of K-culture spreads worldwide, streaming of Korean indie, rock, band, and hip-hop music is continuing to increase beyond K-pop. Reflecting this trend, Spotify prepared the music festival "Spotify House Seoul," held in Seongsu-dong, Seoul, from the 10th to the 13th of this month, on the largest scale ever, and added indie and hip-hop artists to the lineup of singers performing live. He said, "I believe the Korean artists taking the stage this year have the potential to become global superstars within three to five years," adding, "Spotify will support them so they can enter overseas markets."
He said, "Thanks to the ad-supported free plan 'Spotify Free,' launched in Oct. 2024, and our partnership with Naver, the number of Korean users is growing rapidly." According to Wiseapp Retail, as of Aug. this year, Spotify's domestic monthly active users (MAU) stood at 6.96 million, ranking second after YouTube Music (9.58 million). Melon (5.68 million), the homegrown platform that had long dominated the Korean music track market, fell to third.
Spotify plans to speed up its push into the domestic market by touting artificial intelligence (AI)-based personalization features and cooperation with Korean corporations. In particular, the sophisticated personalized recommendation function is cited as the reason Spotify has maintained the lead in the global music track streaming market, ahead of formidable rivals such as YouTube Music and Apple Music. Gyllenhammar explained, "More than 700 million users worldwide consume content such as music, podcasts, and audiobooks on Spotify every day, generating 3.4 trillion 'taste signals,' and based on this we built a 'Large Taste Model' that analyzes and predicts users' preferences."
It also plans to expand experiential events to provide Korean users with a differentiated music experience. "Spotify House Seoul" is part of this strategy. Gyllenhammar said, "The strategy of linking online and offline is delivering significant business results," adding, "We will continue efforts to realize the Spotify brand in offline spaces in various ways."
The following is a Q&A with Vice President Gyllenhammar.
— What is the secret behind Spotify's steady growth in paying subscribers?
We recently reached the milestone of 300 million paying subscribers. When I first joined Spotify (in 2013), there were 5 million paying subscribers, which means we grew 60-fold over 13 years. I believe Spotify's rapid growth is the cumulative result of the "freemium" business model, which we have pursued since our early days, and our advanced personalization features. "Ubiquity"—being able to use Spotify anytime, anywhere across ecosystems of various devices such as smartphones, PCs, TVs, cars, and game consoles—and seamless compatibility are key growth drivers.
— What strengths set Spotify apart from competitors such as Apple Music and YouTube Music?
Personalization is a unique asset of Spotify that differentiates it from other music track platforms. Based on the vast records accumulated as users worldwide have listened to music and used the service for years, we recommend tailored content to each user. As the world's largest music track streaming service, Spotify not only has more users than rivals, but also has longer user dwell times and higher service engagement.
— How does Spotify's personalized recommendation work?
More than 770 million Spotify users worldwide listen to music and consume various content on the platform, generating about 3.4 trillion "taste signals" every day. We feed this into our AI-based "Large Taste Model" to design a personalized user experience that reflects each user's preferences.
In the past, we had to build personalization services based on users' click histories, content added to their libraries, and songs included in their playlists. But with AI in place, the volume of signals we can analyze has increased significantly, and our ability to grasp users' preferences has improved dramatically.
— How are you responding to changes in the music track market in the AI era?
AI is an excellent tool that helps Spotify, a technology company and cultural company, accelerate innovation and develop and roll out new features faster. The majority of Spotify's employees are developers, and AI helps them code faster and more efficiently. As overall development productivity rises, we have been able to roll out AI-based products and services more quickly.
A representative example is "Prompted Playlists," which lets users write out the specific conditions of the playlist they want and request it. "AI DJ" is also a conversational service for paying subscribers. It analyzes users' music tastes to play tailored music and, like a real radio DJ, provides related commentary in an AI voice between tracks.
— You have expanded into 184 countries worldwide. What is unique about the Korean market?
Korean users are more proactive than any other market in creating their own playlists and sharing them with other users. Korean users rank No. 1 worldwide in the number of Spotify playlists they create. Monthly average usage time and days of use on the Spotify platform are also among the highest globally.
— What share does K-pop currently occupy on Spotify?
The number of users who enjoy listening to K-pop on Spotify is increasing every year. In the past, it was popular in Asian markets such as Korea and Japan, but now it has taken root as mainstream music in many regions around the world. Rather than merely securing a dedicated fan base in each country, it is being naturally included in playlists that contain various genres. When popular groups such as BTS and LE SSERAFIM release new songs or albums, they sweep charts in dozens of markets around the world.
— How do you assess the future growth potential of K-pop and Korean music?
Genres whose market sizes had been relatively small—such as Korea's indie, rock, band, and hip-hop—are showing explosive growth beyond Korea in overseas markets. This shows that the music Korea can export is not limited to K-pop amid the global spread of K-culture.
That is why this year's "Spotify House Seoul" assembled a lineup to encompass diverse genres in the Korean music market, including K-pop, indie, and hip-hop. I believe the artists taking the stage have the potential to become global superstars beyond Korea within three to five years. Spotify will work with partners in the music industry to support them so they can enter overseas markets.
— What strategies are you focusing on in the Korean market?
Korea is one of the most important markets for Spotify. Just two to three years ago, Spotify's recognition in Korea was low, but now you would be hard-pressed to find anyone who doesn't know Spotify. The number of users is also growing rapidly. To strengthen our presence and pursue growth in the Korean market, we are investing in localization, marketing, and partnerships with major corporations.
Launching a free plan in the Korean market at the end of 2024 was a key turning point, and our partnership with Naver has also been a driving force behind the increase in paying subscribers. In particular, the partnership with Naver is meaningful in that Spotify is integrated into various services within Naver's ecosystem, such as Maps and Search. In the global market, we are also working closely with Samsung.
— What other businesses or markets are you focusing on?
We are focusing on extending Spotify's online experience into offline spaces. "Spotify House" is also an extension of our strategy to link online and offline. Users want to meet friends or fans with similar tastes in person to share music and have different experiences.
In Korea as well, we will continue trying to create various spaces so users can experience Spotify in unexpected places. When BTS released a new work, we launched a cruise on the Han River and held a "Swimside" event with fans, and when LE SSERAFIM released a new album, we also set up an offline experiential event.
— What are your goals going forward?
Our goal is to increase the number of paying subscribers from the current 300 million to 1 billion over the long term. I believe it is fully achievable if we continue to secure paying subscribers in high-potential markets such as India, Africa, and Southeast Asia. For Korean users, we will continue to offer a window into music from around the world while steadily rolling out content that reflects Korean culture.