Is Melon only available in Korea?
Melon is an online music streaming service based in South Korea. Originally launched in 2004 by SK Telecom, Melon quickly became the leading music platform in South Korea. At its peak popularity in the late 2000s, Melon had close to 90% market share of the South Korean online music market.[1]
As the largest music service in South Korea, Melon has been an integral part of the Korean Wave (Hallyu), helping spread K-pop to an international audience. Over the years, Melon has evolved from focusing solely on downloads to providing streaming access to over 7 million tracks.[2]
While firmly established in its home country, Melon has struggled to expand and compete globally against services like Spotify and Apple Music. However, within South Korea, Melon retains its standing as the dominant platform for music discovery and streaming.
[1] https://core.ac.uk/download/pdf/161122477.pdf
[2] https://koreajoongangdaily.joins.com/2016/01/11/etc/Kakao-buys-Loen-and-its-MelOn-music-service/3013810.html
Melon’s Origins in South Korea
The online music service Melon was first launched in South Korea in November 2004 by major South Korean telecommunications company SK Telecom (https://en.wikipedia.org/wiki/Melon_(online_music_service)). It quickly became one of the most popular music streaming services in the country. Within just a few years of launch, Melon had millions of users and dominated the South Korean digital music market.
As a service created specifically for the South Korean market, Melon was designed with Korean music fans in mind. The streaming library focused on Korean pop, rock, hip-hop and other popular domestic genres. Melon also incorporated social features, music charts and video content to cater to local listener preferences.
With SK Telecom’s resources and extensive user base, Melon was primed for success in South Korea right from the start. The service capitalized on the rapid growth of high-speed internet access in the country in the early 2000s to provide fans a new way to conveniently access the latest Korean hits online.
Melon’s Popularity and Market Share in Korea
Melon has dominated the music streaming market in South Korea for over a decade. As of January 2023, Melon was still the most popular music streaming service in South Korea, used by 32.8% of survey respondents according to Musically. Although Melon’s market share has declined slightly from 34.6% in 2021, it still maintains a significant lead over other streaming platforms in Korea.
Melon’s closest competitor is YouTube Music, which had 24.4% market share as of January 2023, per the Musically survey. Spotify, the global market leader, has struggled to gain traction in Korea with only 2.6% market share. Melon’s domestic dominance highlights its strong branding and catalog tailored to Korean listeners.
However, there are signs Melon is losing ground, especially among younger demographics. According to Statista, 55% of respondents aged 10-19 used Melon in 2023, down from 65% in 2020. As competitors like YouTube Music gain popularity, Melon will need to continue innovating to maintain its lead.
Expansion Outside of Korea
Although Melon originated in South Korea, the service has expanded to other Asian countries over the years. In 2013, Melon launched in Japan in partnership with local music and entertainment company Pony Canyon [1]. The Japanese version of Melon provided access to both Korean pop music and Japanese music. Melon saw strong growth in Japan due to the popularity of K-pop in the country.
Melon also launched in Taiwan in 2015, offering a mixture of Korean, Japanese, and Taiwanese music. According to market research, Melon captured over 50% of Taiwan’s music streaming market just a year after launch [2]. The service found success by catering to the Taiwanese audience’s taste for music across multiple Asian countries.
Attempts to Launch in the US
Melon tried to expand into the US market around 2010 but ultimately failed to gain traction. The company launched a US version of its streaming music service, hoping to compete with services like Spotify, Apple Music, and Pandora that dominated the American market. However, Melon struggled to attract users, build partnerships with record labels, and adapt its business model to the US (Corporate Traveler Launches Melon, A New Travel Platform Built Exclusively for SMEs, 2021).
Part of the issue was that Melon faced entrenched competition from streaming incumbents in the US. Spotify in particular already had a strong foothold, making it difficult for a new streaming service to differentiate itself. Melon also lacked the licensing deals needed to offer a comprehensive music catalog on par with other US platforms. Without a competitive library or unique selling point, Melon failed to convince American consumers to switch over from their existing streaming providers.
Melon’s attempt to expand in the US demonstrated the challenges Korean tech companies can face when entering new overseas markets, especially ones already dominated by global players. While Melon found enormous success in Korea, the dynamics were very different in America, preventing the company from replicating that success internationally.
Key Reasons Melon Struggled Abroad
One of the biggest challenges Melon faced when attempting to expand abroad was competition from global music streaming platforms like Spotify and Apple Music. These services already had an established user base internationally, while Melon was relatively unknown outside of South Korea.
For example, when Melon launched in the US in 2011 under the name MelOn, it struggled to gain traction. Spotify had launched in the US just two years prior and already amassed a loyal following. Melon simply could not compete with Spotify’s larger music catalog and more advanced features like personalized recommendations.
Additionally, Melon’s interface and UX were designed specifically for the Korean market. The platform lacked English language support and did not account for Western music tastes. This made Melon unappealing compared to platforms like Spotify that were tailored for international markets.
In the end, Melon learned that succeeding in foreign markets requires more than just translating an app into new languages. Companies need to build products with global users in mind from the start. Melon’s South Korea-centric approach made it difficult to expand abroad in the face of stiff competition.
Melon’s Business Model
Melon primarily generates revenue through two tiers of service: an ad-supported free tier and a paid subscription tier without ads. The free tier allows users to stream music and create playlists, acting as a funnel to convert users into paying subscribers. Subscribers pay a monthly fee for unlimited access without ads. According to one analysis, Melon had over 1 million paying subscribers as of 2018, with the majority of its users on the free, ad-supported tier (Source).
Melon’s freemium model has proven successful in South Korea, where it holds over 90% market share. However, the company has struggled to replicate this success globally, in part because the ad-supported model is less lucrative outside of Korea. Additionally, Melon’s catalog and user experience may not be as robust for non-Korean audiences. Still, the fundamental elements of Melon’s business model – ad revenue from the majority of users plus subscription revenue from a smaller subset – have fueled its domestic dominance.
Melon’s Music Catalog
One of the defining aspects of Melon is its extensive catalog of Korean music. According to an industry report by Stoke Seeds, Melon offers access to over 6 million Korean songs across various genres like K-pop, hip-hop, indie, and more. This allows Melon to provide Korean users a deep library of domestic music.
However, Melon has a more limited catalog of Western and international music compared to services like Spotify. As noted in the International Catalogue, Melon’s focus on Korean music gives it an immense collection of local songs but fewer mainstream global hits. This is a major difference from Western streaming platforms. While popular with Korean listeners, Melon’s music catalog has been a challenge in expanding abroad.
User Experience and Features
Melon provides users with a personalized music recommendation system based on advanced algorithms and machine learning. When users first join Melon, they are prompted to select their favorite music genres and artists. As they continue using the app, Melon will track their listening habits and likes/dislikes to refine recommendations over time.
The app also has robust social features that connect users based on their musical tastes. Users can follow each other, share playlists and songs, and see what their friends are listening to in real time. There is also a comments section on each song page where users can discuss the music.
Melon really focuses on music discovery and helping users find new artists and genres tailored specifically to their preferences. The recommendations continue getting better the more a user engages with the app.
Conclusion
In summary, Melon has dominated the music streaming market in South Korea ever since launching in 2004. With a catalog focused on K-pop and Korean music, Melon appealed to local listeners and quickly gained millions of users. However, Melon’s attempts to expand internationally have largely failed. Despite launching in several countries, including the US, Melon struggled to gain traction outside of Korea.
Melon’s music catalog, user experience, and business model seem tailored specifically to the Korean market. While Melon offers a top-notch service for K-pop and Korean music fans, it does not have the global appeal of services like Spotify or Apple Music. Moving forward, Melon will likely remain the go-to platform for music streaming in Korea, while continuing to play a negligible role in international markets.
