[Digital Simplicity] Spotify and Teleparty signal importance of new digital experience

Audio streaming service Spotify made its debut in South Korea on Tuesday, signaling a fresh round of competition among streaming apps.

A lot of digital music fans here have high hopes for Spotify, which has a library of some 60 million songs and allows users to listen to plenty of music under a “freemium” plan.

The high level of attention Spotify attracts actually reflects the solid positions of Korean streaming players such as Melon, Genie Music and Flo. Even though Apple Music, a digital music service offered by Apple, has been available in the local market, its influence is far smaller than Korean rivals, and some predict that things might change with the official debut of Spotify.

As part of the initial marketing campaign, users can listen to all music on Spotify free-of-charge for three months, after which paid subscriptions are required.

Spotify’s subscription plan is set at 10,900 won ($9.70) for a single user and 16,350 won for dual accounts, before tax. Given that local streaming providers charge an average of under 8,200 won per month, Spotify’s plan is not so competitive in terms of pricing.

Korean media outlets also point out that Spotify, just like Apple Music, does not boast the Korean catalog to meet demand here. For instance, neither Spotify nor Apple Music offer albums from IU, one of the country’s most popular singers, which is a make-or-break issue for many digital music users in Korea.

But it is too early to brush off the potential of Spotify. The giant music streaming provider has a whopping 320 million users in 92 countries and carves out a respectable 34 percent share in the global music service market. Not only its vast music library, but also a rich reserve of playlists help sort out a selection of music tailored for users with different tastes.

Melon, which controls 34 percent of the Korean digital music market, has a library of 40 million songs, with 8.78 million users. The other major players are Genie Music (23 percent), Flow (16 percent) and YouTube Music (14 percent).

Recently, Melon drastically overhauled the design of its streaming app, perhaps aware that its competitive edge might be tested as Spotify enters the Korean market. Melon’s new interface appears to be modeled on leading streaming apps, but some might be dissatisfied with the design since many of the detailed options are hidden.

The real test, meanwhile, is whether Korean streaming apps can provide something different or essential to users who are now quite familiar with customization and personalization functions based on artificial intelligence and other related technologies.

Instead of searching for new music, users want apps or services to go out and pick the best selections suitable for different situations. The core competition now lies in the technological depth that can appeal to tech-savvy users.

In line with the dominance of streaming apps in the music field, video services have shifted to streaming mode too, and something innovative is afoot.

A range of music and video streaming apps were originally designed to help users individually enjoy what they want to listen to or watch. In recent months, users of such streaming apps want to join others and create a simultaneous and collective experience.

Teleparty, formerly Netflix Party, is one case in point. The service allows Netflix users to watch TV with friends online, as the video playback is synchronized. As with other sports and PC games, music and video users want to talk about content with friends in real time, creating digital experiences that are more entertaining and rewarding that those enjoyed alone.

It is not certain whether Korean streaming players will come up with services similar to Teleparty, but what’s clear is that they have to develop better and more innovative digital music experiences to shore up their market position in the coming years.

By Yang Sung-jin (insight@heraldcorp.com)

Yang Sung-jin is the multimedia editor of The Korea Herald. -- Ed.