Streaming music services now account for 89% of digital music sales in Sweden, Spotify’s home country. According to figures released by the local record industry trade body, overall record sales are up just over 30% year-on-year, with digital music accounting for 63.5% of total recorded music revenues.
The considerable growth of the Swedish market and the dominance of digital (it’s about 50/50 digital/physical product revenues in the UK just now) are both interesting, but it’s the fact that 89% of digital is coming from streaming services that is the biggest stand out stat of this report.
It’s been no secret for a while that labels in Sweden have been seeing impressive royalty payments – relative to the market – coming in from the streaming space, and mainly Spotify. Though that 89% figure is partly due to Spotify’s rapid growth, but also the negative impact that has had on a la carte download stores like iTunes, which totally dominates digital in many territories.
But will this Spotify-assisted digital growth enable the Swedish record industry to return to the sorts of revenues they saw before the web took off in the late 1990s and decimated CD sales? Universal Music Sweden MD Per Sundin reckons so. Music Ally quotes him thus: “We’re back to the same revenue levels as during 2004, and if the development continues in the same way we’ll be back on turnover similar to those during the ‘golden days’ of the CD in just a few years”.
Of course pessimists might question how much of the royalties paid to labels and other rights owners by Spotify comes from sustainable subscription revenue, and how much is reliant on finite venture capital, given that iTunes revenue is genuine cash that comes from real consumers. “What happens when the start-up investment runs out?”, they might ask. Realists may not be so doom and gloom, but might wonder whether digital trends in Sweden are a sign of what’s to come elsewhere, or something unique to this market.
Still, it’s Friday and the sun’s out, so let’s let the optimists have the final word. “Spotify’s saving the day, woo hah, let’s have a big fat party and piss everything away on ludicrous excess”. Oh look, it is the 1990s again.