Spotify, a Swedish company, was created as a consumer-friendly alternative to piracy, which was decimating the Swedish music-sales industry. It worked, and continues to work. IFPI Sweden released industry metrics for 2013, showing deepening loss of CD and download sales, countered by a large year-over-year gain in streaming revenue. Billboard did a good job translating from Swedish and packaging the statistics into a chart.
Streaming income gained 30% over 2012, continuing a three-year upward trend. Streaming revenue accounts for 70% of all Swedish music earnings. Because of the streaming powerhouse in Sweden, total music revenue is on a similar three-year growth curve.
American musicians who complain about Spotify royalty payments could take comfort from the idea that the U.S. market might simply be lagging behind the Swedish pioneering market. Certainly, Spotify founder Daniel Ek has preached over and over that scale is what matters — that when the service is furnishing music to a larger proportion of a total listening audience, those pennies add up and everyone will be happy. Before tipping points are reached, per-stream payouts don’t seem to compare well to CD and download sales. When a band lectures its fans to “buy our music,” it doesn’t mean “stream our music.”
American musicians might also take an early lesson from Swedish artists, who sued their labels for fairer terms in their contracts regarding streaming distribution. Label contracts sometimes regard streaming as licensing (small percentage to the artist) instead of sales (larger percentage). American singer-songwriter Billy Bragg made that point to fellow musicians recently. If streaming succeeds in replacing downloading, artists should participate in that transition fairly.