A stream come true: Spotify with karaoke twist launches in Japan

Spotify has unveiled plans to launch in Japan, with a new lyrics feature that is designed to appeal to the country's love for karaoke.

But the streaming service will face an uphill struggle to gain a stronghold in the world's second-largest music market, as CDs and vinyl still account for 80% of music sales.

Several of Spotify's rivals have been lured into setting up shop in Japan and vying for a slice of the $3bn (£2.31bn) market, only to close their services down.

Even (Taiwan OTC: 6436.TWO - news) though Japan bucks the trend, with digital downloads soaring elsewhere, Spotify is optimistic that its catalogue of 40 million songs will be music to the country's ears.

A new feature which allows users to access song lyrics on their mobile from within the app will also be making its debut.

Spotify's chief executive, Daniel Ek, said: "The Japanese market is very different … we want to make sure Spotify here is long-lasting."

The streaming service is initially being rolled out on an invite-only basis, but will eventually offer two tiers of membership: a free service with advertising, or an ad-free version which will cost 980 yen (£7.43) a month.

Google launched its music streaming offering in Japan last year, with Apple (NasdaqGS: AAPL - news) and Line following suit.

Spotify's latest launch means the Swedish music giant is now operating in 60 markets worldwide with more than 100 million users - 40% of whom are paying subscribers.

On Wednesday, the Financial Times reported that Spotify was in advanced talks to buy its German rival SoundCloud, in a deal which could value the website at $1bn (£770m).