YouTube Music to Cease Forced Bundling... Domestic Music Streaming Platform Market on the Brink of Restructuring

YouTube Music, which once dominated South Korea’s music streaming ecosystem, is expected to stop integrating with YouTube Premium. As the Fair Trade Commission accepted Google’s self-correction plan, a historic shift in the domestic music streaming platform market is underway. The commission recently approved Google Korea’s request for consent-based resolution, initiating procedures to address YouTube Music’s forced bundling issue. Consent-based resolution is a system that allows companies accused of violating antitrust laws to end review processes early without penalties if they submit voluntary corrective measures. Google has requested to launch a separate “YouTube Premium Light” subscription tier that excludes the music streaming service. Since 2019, YouTube Music has experienced rapid growth by being included free of charge with YouTube Premium, which costs 14,900 won per month. The monthly user base, which was only 600,000 at the start of the service, reached 4.59 million in October 2022, surpassing Melon, the then-leading platform, and climbed to 7.24 million as of February this year. The commission believes this growth was driven by the strong marketing impact of the bundled video subscription. In a survey conducted by the commission, most users stated they would not have used YouTube Music if forced bundling did not exist. Domestic music streaming platforms suffered severe impacts as a result. Over the two years since YouTube Music became the top platform in 2023, user numbers among local companies dropped by 20% to as much as 50%. Most major platforms, including Genie Music, Flo, VIBE, and Bugs—excluding Melon—operated at a loss. Since the average monthly subscription price for domestic music streaming services (around 7,000 won) was lower than YouTube Music Premium’s price (11,900 won), forced bundling proved decisive for consumers. The industry is paying close attention to potential market restructuring following the launch of Premium Light. A representative from a music streaming platform analyzed, “It’s difficult to consider YouTube Music a platform chosen actively by consumers. Once the Light tier is launched, which platform truly ranks first as a genuine music streaming service will become clear.” Based on international examples, Premium Light is expected to cost approximately 40% less than the Premium tier. However, its ultimate success will likely depend on consumer response. Choi Chul, a professor of consumer studies at Sukmyung Women’s University, said, “Regardless of the commission’s decision, consumer preferences are a crucial factor for the actual launch of these subscription tiers. Consumer interest generated through social media and other media can significantly influence companies’ policy decisions.”