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Spotify may actually be reigniting music sales growth

July 31st, 2013 at 3:50 PM
Spotify Music Sales Analysis

In some ways, Sweden is the chilly laboratory of the global music industry. The local hero, Spotify, took over the country already at the end of 2011 as the cool animation by Digital Music News demonstrates. In 2009, streaming music was just 7% of music sales in Sweden. In 2013. streaming had exploded to 70% of the entire music industry sales. As the streaming revolution took off, something curious happened in Sweden: National music sales started growing robustly again, from $150 million in 2012 to nearly $170 million in 2013.

This is just one third of the level where Sweden’s music sales stood at the end of the 1990s, but at least the industry has rediscovered growth through Spotify. The collapse of physical albums sales in Sweden has been stunning: They made up 80% of total music sales as recently as in 2009. By 2013, album sales had crashed to just 24% of total music sales, according to Grammofonleverantörernas förening, Scandinavia’s gold standard of music industry data tracking.

Streaming services are likely to take over entire music industries in other markets in the coming years as well. The good news here is that it may mean music industry revenue will start rebounding robustly once that happens. The bad news is that it may still only represent one-third of the sales the music industry hit during the wild peak years of 1999 and 2000.

One intriguing question here is whether this might be a template for what happens with streaming video. Are Netflix and its ilk going to demolish 70% of the TV and movie content industry sales and then reignite growth on their own terms? Kill the whale in order to gorge on its blubber, so to speak?

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