Hundreds of songs from popular K-pop acts including Sistar, IU, Monsta X, Epik High and others have been removed from Spotify in markets outside of South Korea. In a statement to the NME, Spotify confirmed that the songs would no longer be available “due to the expiry of our license”. However, the Korean company that owns the rights to the songs claims Spotify is refusing to renew the global license for its catalog.
Korea’s Kakao M is one of Korea’s largest distributors and also owns MelOn, the country’s largest digital streaming platform. Korea is the sixth largest music market in the world. Spotify was launched in South Korea just a month ago, on February 1st. While domestic licenses for Korean music continue to be negotiated, contracts for Spotify licenses to stream music in markets outside of Korea expired on March 1.
Spotify claims they were unable to renew the global license agreement despite “working with Kakao M for the past year and a half” to reach an agreement. Speaking to a local Korean news agency, Kakao M officials claim that Spotify has a policy that requires concurrent national and global agreements, meaning they cannot renew global rights without agreeing on national rights.
Some insiders have speculated that Kakao M’s ownership of MelOn, a direct competitor of Spotify in the Korean market, is likely a bargaining chip, given that the streaming giant’s control over large swaths of the global music market provides a heavy leverage in negotiations with domestic dealers . Spotify is now available in 178 countries with 345 million active listeners per month and 155 million paid subscribers as of the fourth quarter of 2020. MelOn has 8.81 million monthly active users.
While popular music comes and goes off service in different markets as individual contracts are signed or expired, Kakao M’s control of much of Korean popular music – a global phenomenon in itself – has had a more dramatic impact. While negotiations with Spotify are still ongoing, Kakao M’s music is also available on other DSPs, including Deezer and Apple Music.