Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
Will domestic music streaming services regain market share after YouTube's new subscription program?
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By Lee Gyu-lee
With the Fair Trade Commission (FTC) set to opt against imposing fines and instead accept Google Korea’s proposal to roll out a YouTube Premium subscription option without YouTube Music, there are questions over whether struggling local music streaming platforms can reclaim their market share from the global tech giant.
The FTC said Thursday it initiated a resolution of agreement procedure to review Google Korea’s own proposal to address its practice of bundling YouTube Music with YouTube Premium.
A resolution of agreement allows a company under investigation to propose its own corrective measures, and if accepted by the FTC, the case can be closed swiftly without fines or other sanctions.
Google Korea proposed introducing a YouTube Premium Lite membership, which allows ad-free video viewing only, unlike the original Premium plan that includes ad-free access to music and music videos, video downloads and background play.
The tech giant also included offering a total 30 billion won ($21.7 million) worth of fund to support Korea’s music industry, artists and creators.
If the proposal is accepted at an FTC commissioners' meeting, the investigation, which began in 2023, will be closed without any sanctions on Google Korea, despite competitors' lingering criticisms.
Local stream service operators welcomed the decision, but not with open arms, as the self-corrective measure comes about seven years after the subscription's launch.
When Google released the YouTube Premium subscription in 2018, bundling its music streaming service, YouTube Music quickly grew its share in the local music streaming market, leading the number of users of local services like Melon, FLO and Genie Music, to sharply decline.
According to mobile market research firm WiseApp Retail Goods, YouTube Music recorded about 9.79 million monthly active users last month, compared to the previously dominant player Melon, which was at 6.01 million. Genie Music saw 2.6 million monthly users, whereas FLO was at 1.76 million.
YouTube Premium subscription page / Captured from YouTube
In 2021, YouTube Music only had about 4.03 million users, which was much lower than Melon's 6.89 million. However, as YouTube Premium subscribers surged, it quickly surpassed Melon, becoming Korea’s largest streaming service in just two years.
Local streaming service operators are skeptical about Google Korea's self-corrective measure, questioning whether it can meaningfully alter the deadlock dynamics of the streaming market that has already shifted in Google’s favor.
"It's fortunate that an opportunity has been created to correct the unfair environment, at least now, but honestly, it's just way too late," an official from a local streaming service told The Korea Times. "YouTube Music has already grown too much.”
“It would have been better if this had happened about two years ago. But this unfair competition has already been well-established, so there are disappointing aspects to this.”
YouTube Premium Lite is an existing pricing option in countries such as the U.S., Canada, Thailand, Germany and Australia.
The subscription’s price in Korea is not yet determined, but considering the prices in the available countries, it is expected to be around 7,000 to 9,000 won per month, as the Lite version in those countries is about 40 percent lower than YouTube Premium.
With a YouTube Premium subscription still available for a few thousand more won than the Lite version, it is unlikely for consumers to opt out of their original subscription to shift to a different music streaming platform, especially with the Premium subscription also available through some mobile carriers' membership plans, including SK Telecom’s T Universe.
“In the subscription-based platform industry, recovering lost market dominance is nearly impossible, making it critical to maintain a leading position," another industry official said. "From that perspective, the latest measure is unlikely to yield significant practical results."
The FTC’s decision to review Google Korea’s proposal is also being criticized for taking an easy way out and avoiding becoming entangled in the ongoing trade conflict with the U.S.
As the U.S. Donald Trump administration has flagged regulations on the U.S. digital platforms as nontariff barriers, the decision is viewed as the Korean government prioritizing diplomatic caution to avoid upsetting the U.S. government amid its efforts to reach negotiations on the U.S. imposed “reciprocal” tariffs.