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Summary:

Spotify’s early traction in its native Sweden gives the world a glimpse at what a market looks like when strong music subscription services…

Daniel Ek And Martin Lorentzon
photo: Spotify

Spotify’s early traction in its native Sweden gives the world a glimpse at what a market looks like when strong music subscription services flourish, converting listeners from ownership to access.

Spotify is huge in the land of the midnight sun, and has real market-moving gravity.

According to Swedes And The Internet, a wide-ranging new consumer survey from Sweden’s Internet Infrastructure Foundation

  • “Just over half (57%) of the Swedish people listen and download music via the Internet.”
  • “The percentage of file sharing (21%) have never been greater.”
  • “But the proportion who listen to streaming music using Spotify is even greater.”
  • “Amongst those aged 16 to 25 years, almost 9 out of 10 (85%) are on Spotify and half (55%) listen daily.”
  • “The older people buy CDs and pay per song, while the younger subscribe, share files or listen to Spotify.”
  • “If we compare file-sharers with those who do not share files, we find that there is no difference in how often they buy CDs. However, a larger percentage of file sharers pay to download individual songs than those who do not share files.”
  • “One in three people (37%) listen to Spotify during a month, which is twice as many as file sharing (18%) and many more than those who buy a CD (9%) or pay per song (4%) during a month.”
  • In Sweden, Spotify usage is even running ahead of use of community sites, IM, blog reading and game playing.

Where are all these consumers coming from? Well, Spotify got a head start by launching at home in Sweden in 2008. In October 2009, it signed a deal to bundle its service to subscribers of the Telia broadband, TV and phone provider.

By 2009’s end, national music revenue had grown by 10.2 percent jn Sweden, after a more than four-fold streaming income boom pushed streamers’ share of Swedish music revenue from 17 percent to a whopping 46 percent (see our report at the time).

As of November 2011, a whole quarter of Spotify Premium subscribers there were acquired through Telia.

The Swedish office of the global music industry’s umbrella IFPI said anti-piracy legislation implemented at the time was partly responsible for six out of 10 Swedish file sharers stopping the activity.

All of this is remarkable. For years through the 2000s, Sweden was basically the world capital of digital piracy, land of The Pirate Bay and many principled objectors to IP legislation.

Now, legislation coupled with a homegrown, easy-to-use music product is showing everyone a way ahead. But the move from ownership to access models makes it more crucial than ever that the economics of this new model stack up for everyone in the value chain.

  1. All well and good but what does Spotify pay artists?

    — MrJM

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    1. Spotify doesn’t pay the artists anything!  They pay the labels and rights holders, who in turn take a penny and chop it up and give a piece of it to the artists.

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      1. … just like they do with the income from the sales of physical records. Spotify pays up. It’s the labels that don’t.

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    2. Spotify don’t pay the artist, they pay labels. Just like iTunes and any other retailer does. The issue is artist/label contracts.

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      1. The issue isn’t artist/label contracts. Many unsigned artists have their work on Spotify, and they too get a pitiful percentage rate.

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  2. Only 57% of Swedes download music over the internet?  How do the other 43% download their music?

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