NHN to sell Bugs, exiting Korea’s homegrown music streaming platform

NHN Bugs CI

NHN is selling NHN Bugs, marking its exit from one of South Korea’s first-generation homegrown music services, after the platform struggled to gain traction in a market increasingly dominated by global players.

On Thursday, NHN Bugs said its largest shareholder, NHN, signed a share purchase agreement to sell 6.71 million shares, representing a 45.26 percent stake, to a group of four buyers including NDT Engineering and three Green Harbor & Bugs investment funds. The transaction is valued at 34.7 billion won ($23.8 million).

Following the deal, NDT Engineering will become the largest shareholder with a 13.96 percent stake, the company said. NDT Engineering manufactures and sells nondestructive testing equipment and aircraft parts, and is the market leader in nondestructive inspection for steel pipes in South Korea.

Founded in the early 2000s, Bugs rose to prominence as a leading domestic music streaming platform and was listed on the KOSDAQ in 2009. NHN, then known as NHN Entertainment, acquired the service in 2015.

Since then, however, Bugs has steadily lost ground amid intensifying competition from local rivals such as Melon and global platforms including YouTube Music and Spotify.

According to Mobile Index, Bugs’ monthly active users totaled just 310,000 as of October last year, far below YouTube Music at 7.97 million and Melon at 7.05 million. Other competitors also outpaced Bugs, including Genie Music with 3.03 million, FLO with 2 million, Spotify with 1.73 million, and Vibe with 530,000 users.

Bugs’ revenue has also declined steadily, falling from 65.8 billion won in 2022 to 56.8 billion won in 2023 and 52.1 billion won in 2024, the company said.

An NHN official said the decision was made as part of a broader effort to improve management efficiency by sharpening the group’s focus on core businesses and better aligning its content portfolio with key growth areas.