The world of digital music distribution has received long awaited news. Spotify launched its music streaming service in Japan.
The move by Spotify has been in the works for years. There were rumors that the company was going to go ahead with the launch by the end of the month. Spotify delivered the news a couple of days short of the end of September.
Spotify Enters the Japanese Market
Spotify had set up in Japan for the past year and a half. The company has had an office in Tokyo for 18 months, possibly even more. However, negotiations with record labels and representatives of the record industry took a long time. So, in the meantime, the competition has entered the Japanese market. Rival companies Apple as well as Line and Rakuten have already gotten a foothold in Japan. By now, they have already attracted users to their similar services. Spotify is going to have to compete with these companies to get a share of the market.
Spotify offers two types of services in Japan. There is the free version that is widely available. There is also the paid option that costs 980 yen a month. That’s $9.60.
Japan is a very lucrative market when it comes to the music sector. Estimates of sales say that nearly $3 billion changes hands each year on this market. That makes it the second largest market in the world, after the United States. But Japanese buyers have different purchasing habits than their American counterparts. Whereas in the US, buyers are used to downloading and streaming music digitally, the situation is different in Japan. Here, consumers prefer to buy their music in a physical format rather than download it digitally. However, providers of streaming services see that as an opportunity, not as a negative.
Spotify’s Plan for Japan
Spotify is counting on this move of launching its product in Japan. Success on the Japanese market could give the company some momentum as it enters 2017. There is speculation that next year is the year Spotify is going to go public.
The company recently passed a milestone. It currently has over 40 million customers an a paid-for option. Expectations are that they will add many more from the Japanese market.
Spotify does have some things going for it in Japan. Right now it is the only streaming service that has a free option. Introducing the free option was a difficult task to achieve. Securing deals with record labels, considering you can use Spotify for free, was a challenge. It’s possible that’s why it took the Swedish company so long to enter the market. Unlike its competitors, it had the free option to negotiate.
But the free option could prove to be a winning advantage for Spotify. Japan is a country where users are not used to paying for listening to music digitally. The free option on Spotify could help the streaming service gain some momentum in the country.
The launch is Spotify’s second major move in Asia this year. In March, the company entered Indonesia. Spotify entered Asia in 2013, when it launched in Hong Kong, Malaysia and Singapore. Since the big launches in 2013 it had only expanded to one more market, the Philippines. The year 2016, however, brought two new markets, Indonesia and now, Japan.
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