SHARE
COPY LINK

FILE-SHARING

Spotify boost for Swedish music firm coffers

Swedish online music service Spotify is starting to become a major revenue stream for Swedish music companies as digital sales are forecast to account for 25 percent of income in 2010.

“We can see a continued positive trend, and that is very exciting,” said Per Sundin at Universal Music Sweden.

Sundin is referring to the development of the Swedish music market to date in 2010, after a 2009 which signalled a break in the negative trend with total revenues climbing in real terms for the first time since 2002.

While digital sales accounted for the greatest part of the increase, CD and vinyl remain popular and also recorded gains.

Income from so-called streaming climbed by a whopping 438 percent to 65 million kronor ($8.24 million), which a large part coming from Spotify.

Per Sundin expects over 25 percent of sales to come from digital sources in 2010, in comparison with 16 percent in 2009. He confirmed that “a large part” of the digital money comes from Spotify.

“Spotify has been incredibly successful and attracted even more paying customers, who pay 99 kronor per month,” said Sundin.

He pointed out that Apple’s iTunes and Nokia’s equivalent have also shown positive sales development, with Universal expecting further alternatives to come onto the market.

“We are testing subscription models, advertising-funded models… We are trying everything at the moment as we want the consumer to decide how music should be consumed.”

Rival firm EMI has also reported that digital revenues are on the increase. Stefan Blom at EMI forecasts that digital revenues will account for around 20 percent of sales in 2010.

“But I want to underline, that when we talk about streaming it is not only Spotify. There are in fact other up and coming services, and YouTube also accounts for a significant proportion of listeners and watchers, Blom said.

Stefan Blom at the same time pointed out that Spotify is starting to become a very important income source for the sector, thanks to the continual increase in the number of paying users.

“It is growing month by month. This means that future prospects are very good, for us and for the artists,” he said.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

BUSINESS

Spotify reports strong growth in users as it announces price rise

Spotify on Tuesday reported a bigger-than-expected rise in active users at the end of the second quarter, a day after the music streaming giant announced price increases for its premium service.

Spotify reports strong growth in users as it announces price rise

The Swedish company, which is listed on the New York stock exchange, said it’s total active users rose 27 percent to 551 million year-on-year, or 21 million more than it expected. The number of paying subscribers also rose, with a 17 percent jump to 220 million — three million more than expected.

On Monday, the company announced it was raising its prices for premium subscribers “across a number of markets around the world,” following in the footsteps of similar moves by competing music services from Apple and Amazon.

Despite the boost in users, Spotify reported a bigger operating loss of 247 million euros ($273 million) in the second quarter, compared to a loss of 194 million euros for the same period a year earlier.

The company said it was “primarily impacted by charges related to our actions to streamline operations and reduce costs.”

In early June, Spotify announced it would be cutting some 200 positions working with podcasts.

That move came after a January announcement that Spotify was cutting around 600 jobs — equalling about six percent of its workforce — following similar moves by other tech industry giants.

Spotify has invested heavily since its launch to fuel growth with expansions into new markets and, in later years, exclusive content such as
podcasts. It has invested over a billion dollars into podcasts alone.

In 2017, the company had around 3,000 staff members, more than tripling the figure to around 9,800 at the end on 2022.

The company has never posted a full-year net profit and only occasionally quarterly profits despite its success in the online music market.

SHOW COMMENTS