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Streaming services ‘save’ Swedish record industry

While Swedish CD sales are continuing to drop significantly, record companies’ streaming revenue is soaring and digital sales now amount to over half of the companies’ proceeds, according to fresh figures from the International Federation of the Phonographic Industry (IFPI).

Streaming services 'save' Swedish record industry

The rise in overall record company revenue doesn’t amount to more than 0.5 percent, some 829 million kronor ($123 million).

But for the first time, digital sales makes up more than half, 51 percent, of the total revenue.

“Perhaps we have an odd situation in the music industry but we are pleased that the overall market increases by 0.5 percent. If you were to compare that to any other business few would be overjoyed with that kind of growth. But we are not used to growth at all,” said Ludwig Werner, IFPI Sweden CEO to news agency TT.

According to IFPI, digital sales amounted to 51 percent of the total revenue, a rise in 65 percentage points since last year.

This kind of purchasing is continuing to rise in Sweden with 82 percent from streamed music services like Spotify (compared to 66 percent in 2010) and 18 percent from other internet services (34 percent in 2010).

More surprising perhaps is that 46 percent of the record companies’ revenue is still amassed from the almost 10 million actual discs sold, to a value of 385 million kronor.

“With the media and the industry so focused on the digital market since a few years back, it is actually almost more surprising that the CD still makes up for almost half of the companies’ revenue,” said Werner in a statement.

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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.

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