Spotify will not flourish in Japan, here's why

Spotify has just recently opened its doors to Japan, the second largest music market in the planet. Its music streaming services is available as an invite-only access however it plans to go full-service come November. But with the excitement that goes with Spotify's free service offer, there are speculations that it will not be as widely accepted by Japanese.

TechNewswires mentioned that different roadblocks that will hinder Spotify's chances of gaining the upper hand in the Japanese music market.

CEO David Ek of Spotify was in Tokyo for a press conference regarding its launch. He mentioned that he was excited to be there and to bring 2 million artists all over the world to Japan. He also cited that he is also ready to take Japanese artists to the rest of the world. Spotify will also introduce a new feature with song lyrics displayed on the screen while it is playing similar to karaoke.

According to an article in Forbes, Spotify may have neglected the fact that Japanese music market is very focused on promoting Japanese artists and bands. Therefore it seems to be unnecessary to offer labels from other countries. It was also mentioned that Spotify has made agreements with Japanese labels however it still had limited reach. According to a music consultant in Japan, less than half of the songs found in the Oricon Chart are found in Spotify.

The new karaoke-like feature is another thing. While karaoke is extremely popular in Japan, it is more of a phenomenon. Almost every town has a bar equipped with karaoke machines. It's not really something that Japanese people enjoy at home. And karaoke bars in Japan are not simply sing-along bars; these are equipped with sound systems already with scrolling lyrics.

Converting free users to paying users may be another hurdle that Spotify will come across in Japan. Most of the music streaming services launched in the country has had great numbers of members initially. However once free-subscription is over, it would only leave around 40% who would still be willing to pay for the service. And with the number of Japanese artists and songs featured in Spotify, it is expected that conversion rates will be lower than what is expected.  

Spotify is set to offer paid subscription for 980 yen or $9.60 quite similar to paid subscription rates of Apple Music and Google Play.