“Spotify-Effect” on Music Records Income: Norway 2012

Last year, the Swedish music market announced a big surprise for the Global music industries: Its revenues noticed a large increase due to streaming services like Spotify, which made more revenue than iTunes in the first half year of 2012. As I mentioned in the article about the Swedish music market, there has been a lot of discussion how the music sales and income evolve with the opportunity to access all music via Streaming services. The Swedish top-line was one of the first large “Hurray”s in terms of this discussion. However, this was in Spotify’s original country.

Norway, the neighbours of Sweden, brought up a new positive news around music records revenues and Spotify: A plus of 8 % in 2012 due to a growth of subscription services of 116 %. Overall digital revenues reach 61,5 % now and, therefore, have taken over physical revenues. Another benchmark: Streaming in Norway accounts for 45 % of all record sales income. Digital sales are also growing, albeit less than streaming income. Physical sales decline.

How can we evaluate these news? It needs to be mentioned that Norway has the second highest spending-per-person on music (28 US-$ per year; Japan is first with 32,3 US-$, Germany: 20,8 US-$, UK: 22,3 US-$). So, either they have passionate music consumers, or low illegal music consumption, or both.  Techdirt reported that the Scandinavian countries could strongly motivate former illegal downloaders to use legal streaming services, which is one big hope of the Global recording industry to achieve this effect with pushing streaming services forward. So, this might be the largest advantage of streaming services to the industry.

One large “question mark” is still the impact of streaming services on those consumers, who have previously bought downloads and physical records. My personal consumer behaviour has evolved to a streaming and physical records combination. I am using Spotify, Podcasts and (Web)radios, and often buy physical records of my favourite artists and albums.

But, which impact have streaming services on download sales, respectively consumer behaviour who generally buy downloads? There is little difference in the usability between streaming music and playing purchased downloads from the hard drive.

I will keep my eyes open for answers on this question. And certainly on the development of streaming in large music industry countries like Japan, USA, Germany and UK.

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