Spotify Japan Launch: Music-Streaming Service Comes To $3 Billion Market Dominated By CDs

Music streaming app Spotify launched in Japan Thursday, making its official debut in the second-largest music market in the world about 18 months after it set up an office in Tokyo.

Daniel Ek, CEO of the Swedish company, held a press conference in Tokyo where he announced two version of its service: a free one with ads and the other for 980 yen ($9.7) a month. Ek added that the service will also be available through the popular PlayStation video game consoles, manufactured by Japan’s Sony Corp, Bloomberg reported.

However, the music market in Japan — estimated to be worth about $3 billion — may prove to be a tricky one for Spotify, as it has been for most music streaming services that operate in the country, given that CDs are still the most popular format for music sales. The continuing popularity of conventional physical formats of music storage, including vinyl records, was one of the reasons for Spotify to delay its launch there.

However, it is currently the only free music streaming service in Japan. Rivals like Apple, popular messaging app Line that began offering music streaming in 2015, and local e-commerce player Rakuten, all offer only paid services. That may give Spotify an edge over competition.

Paying users worldwide at Spotify crossed the 40-million mark earlier in September.

Spotify, which began in 2008, entered Asia in 2013 when it launched in Hong Kong, Malaysia and Singapore. It began operations in the Philippines in April 2014 and its next (and last) expansion in Asia was when it launched in Indonesia in March this year. The company is also said to be considering entering India, the world’s second-most populous country with a large number of mobile-first and mobile-only internet users.