What is KKBOX and can it take on Spotify with a $104m funding round?
Most Rockol readers will probably have never heard of KKBOX. The company is a music streaming service available in six Asian countries including Japan, Taiwan, Hong Kong, Singapore, Thailand and Malaysia.
KKBOX already reached to major milestones: a catalogue of 10 million tracks and over 10 million users of the service (2 million paying subscribers), and now the company has raised $104 million from Singapore GIC, a government-backed investment fund.
The company has displayed impressive longevity in the midst of challenging transitions and market conditions. Started in 2004, KKBOX is perhaps second only to Rhapsody when it comes to the largest streaming music services that are still in circulation today.
The cash the company just raised is going to fuel further international expansion, not towards saturated markets in the West, but rather in territories like Indonesia, the Philippines and Vietnam.
Western streaming services that have launched in Asia are struggling to license significant chunks of the local catalogue, whilst KKBOX counts on its ability to aggressively license local content in order to provide a bespoke experience in each territory.
Not all companies operate in the same way though. Spotify has been pretty meticulous in ensuring that it obtains licenses to key regional content from the get-go (which is probably why the service is yet to launch in Japan), including independent labels.
On the feature front, KKBOX has two in particular that set it apart from companies like Spotify, Deezer and Rdio.
First of all KKBOX has created a way to tune into what your friends (and all users that are online on the service) are listening to in real time. This means that anyone can be a DJ for their friends and program a “radio station” in real time that people can tune in and out of, opening up interesting ways to consume “socially” and comment in real time on someone’s musical choices.
This can also be used as a way for fans of an artist or of a celebrity of any kind to feel close to their idol by listening to the feed - a little creepy perhaps but effective.
Second, the company has integrated scrolling lyrics on its mobile app, enabling what it describes as “the ultimate karaoke experience”.
This feature is currently available from third party apps (like MusixMatch for example) but lyrics are not yet available directly on the Spotify or Deezer app.
All in all, KKBOX has the potential to perform well across Asia. It’s going to be interesting to see whether in the long run mainstream users will decide to adopt a Western brand like Spotify - the company is making big investments across a number of markets there - or opt for KKBOX.
(Andrea Leonelli)