Spotify helps Swedish music sales rise 30.1% in first half of 2012


Streaming music now accounts for 89% of digital music sales in Sweden, according to figures released by GLF, the local arm of music industry body the IFPI.

In fact, the entire music market in Sweden is buoyant. Overall music sales increased by 30.1% year-on-year in the first half of 2012 to SEK 446m (around $63.5m), with digital music accounting for 63.5% of all music sales.

So, while physical revenues fell by 2.2% in the first six months of 2012, digital revenues were up 60.5%. Streaming revenues rose 79.4% to SEK 252.7m ($40m), while ‘other’ digital revenues (i.e. downloads) fell 14% to SEK 30.7m ($4.4m).

Or, to put it a different way, streaming is cannibalising downloads in Sweden, but the growth of the former is far outweighing the fall of the latter. And, in fact, streaming growth is also more-than compensating for the ongoing slump in physical music sales.

The popularity of Spotify – while other streaming services are available in Sweden, it’s really Spotify we’re talking about – might be bad news for Apple’s iTunes, but it looks like good news for labels, publishers AND artists. With the caveat that this relies on artists getting their fair cuts of these streaming revenues through their labels – an ongoing debate.

“The Swedish music companies have been extremely quick to adapt their business models to today’s parallel sales channels. What’s more, Swedes have shown that they really like streaming music. Now, when buying music in a way that suits the consumer is easier than ever before, music sales increase,” says Ludvig Werner, MD of IFPI Sweden.

“The first half of 2012 has not only been characterized by a very strong period for streaming music, but even the sales of CDs have been strong, with a decrease of only 1%.”

Werner warns that this must be seen against a backdrop of severe slumps in previous years – “these half year figures are 40 percent lower than in the first half of 2000” – but the figures certainly make Sweden a poster market for streaming music.

The question now is whether this pattern, four years after Spotify launched in its home market, will be repeated elsewhere in the world. Spotify itself has jumped on the figures this morning, gathering quotes from label execs and one artist manager reacting to the IFPI stats.

“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,” says Universal Music Sweden’s MD Per Sundin.

“We’ve seen massive change in music consumption, where music fans are now listening to more music than ever, in an entirely legal environment. This means that revenues are increasing all the time, and artists get paid every time their music is played. Our artists get significant revenues from Spotify, which is our biggest income source for Sweden. A positive side effect is that we’re investing a lot in new talent.”

Mark Dennis, CEO of Sony Music Sweden, makes the same point: “One of the most gratifying consequences of this is that it gives us the opportunity to sign more artists, and record more new Swedish music than ever. In fact, for most of our artists, streaming music now represents the majority of the revenue.”

Yes, Spotify would hardly be putting out quotes from people who aren’t so enthusiastic about its impact. Even in Sweden, there are still dissenting artists who complain about the payouts they get from their music being streamed.

Today’s figures may inject new fuel into that debate: the more money Spotify makes for the music industry, the more artists who feel they’re getting a raw deal may turn their attention to the contracts they signed with their labels, and ask some tough questions.

Written by: Stuart Dredge