According to The Local, Billboard, Musikmarkt and Techdirt, the Swedish music market experienced a big up in the first half of 2012, due to Streaming Services like Spotify. Sweden’s music market made an incredible plus of 30,1 % in the first half of the year, with streaming being the most important income stream for the recording market. With this plus, the Swedish market is back on the income level of 2004 and if the development remains, Sweden will be back on the level of the “Golden 90s” in a few years. Great news for the Swedish music industry colleagues! Despite these positive news from Sweden, it must be questioned if this development can be adopted to other countries like USA, Germany or UK.
There has been a lot of discussion whether streaming is good for the music industry or bad. Advantages are that those who illegally downloaded music now have an easy and cheap consumption opportunity, which at least bring in some money to the industry and the artists. The latter is also a disadvantage that streaming licenses are not comparable to download payments. I had a lot of discussions about this topic over the last weeks and months with colleagues and friends.
Some welcome the new development and see big potential in streaming. Accounting that the small amount of licenses are paid each time when a song is played and estimating that songs are played many times in a consumer’s lifetime or by consumer’s who wouldn’t buy the song, streaming services can result in a large income stream. Especially those who previously didn’t buy music are a large group of potential customers to streaming services. Additionally, consumers may get to know more music with streaming services due to playlists, recommendations and social sharing of listener behaviour.
Some doubt that streaming will pay out as much as downloads do. Often, the problem of streaming cannibalising the download or CD market is mentioned (why buying a download, when you can stream it). The payments by streaming services are very little, so consumers need to listen to a song very often in order to be a substitute to a download in value. It might be questioned, if a consumer will ever listen to a song that many times to recoup the amount of a paid download or even CD. Additionally, how does streaming influence the perception of value of music? Any music becomes a good which is available everywhere at any time without particular payment.
It is difficult to evaluate how the market and the perception of music will evolve having these different opportunities to consume music. And in the context of this article topic, how other music market will evolve with the growing streaming market.