What Sweden Has To Tell Us About Streaming’s Future

Although none of it is shocking new data from the most recent IFPI study has given us a glimpse of what a later stage streaming economy might look like, thanks to the numbers coming from Spotify's home country of Sweden.

_______________________

Guest post by Bobby Owsinski of Music 3.0

The latest IFPI annual study on last year’s global music sales has posted and there’s a wealth of data there, although no surprises. There is one piece of data that Mark Mulligan of the Midea research group dug out that may give us a look at the future of streaming. Mark noted that IFPI’s report showed that Sweden’s music revenue only had a 4% growth last year and it’s streaming revenue growth was only at 4%, as compared to double digit growth in previous years.

Mulligan also noted the following about the uniqueness of the Swedish music market:

“Sweden is the home of Spotify, so adoption over indexes
Incumbent telco Telia provided a lot of early stage growth for Spotify
iTunes never really got going in Sweden, so the legacy download market was a much smaller part of the market than it is globally
Physical music sales are further along in their decline (now just 10% of all revenues)”

What this means is that Spotify had a head start in the market and Swedes were into streaming way before anywhere else in the world. As a result, they’ve just about saturated the available market, meaning that there aren’t that many potential new buyers left. There are some CD buyers still left, but what will they do when they stop buying. Will they become streamers or just disappear from the market? And there’s not that many of them to really make much of a difference in the bottom line of the business anyway.

For sure streaming has a lot of growth ahead globally before it reaches the same point as Sweden, but the question then becomes, “What then?” Can it expand beyond its base music audience?

Of course this is crystal ball talk, but the future is here before you know it and technologies become mature faster than ever. Is there a music disruptor in the wings that we don’t know about yet?