Towards a music streaming economy – Scandinavia part 3

Part 1 of the blog series highlights that the Scandinavian countries are the world’s music streaming avant-garde due to a well-established broadband Internet infra-structure, a high smartphone penetration rate and domestic business innovations (see also part 2). The most influential Scandinavian business innovation was Sweden’s Spotify, which was launched in October 2008 at the culmination of The Pirate Bay lawsuit. However, several other services early offered music access to music in Scandinavia. In 2009, Finnish smartphone company Nokia launched the Comes-With-Music service, which allowed unlimited music access for a year on special Nokia Comes-With-Music phones. In the same year, Swedish Sony-Ericsson in collaboration with Norwegian Telenor offered the PlayNow plus service on its special edition of Sony Ericsson Walkman phones (IFPI 2009: 8). However, the mobile phone manufacturers failed to meet the music consumers’ convenience. Nokia’s music was DRM protected until 2010 and limited to special Nokia devices, whereas Sony Ericssons’ music was DRM free, but limited in time and to special devices.

In 2011 both services were, therefore, were discontinued,[1] when Spotify, WiMP and TDC Play started to dominate the digital music market. In 2009, the Danish TDC Play was the first ISP music service offering unlimited music streaming from 6.1 million tracks without any additional costs (IFPI 2010: 8). Spotify’s ad-supported unlimited streaming tier was also bundled in ISP TeliaSonora in Sweden and Finland and the premium tier could be directly paid on the broadband bill (ibid.: 9). WiMP’s subscription service also succeeded in Norway due to its bundling in Telenor’s mobile phone contracts (IFPI 2011: 9).

Consumer convenience, therefore, was the key success factor for music streaming services in Scandinavia. It was easier to access music by a streaming services than downloading music from P2P file sharing networks with the risk of malwares and viruses. Music consumption studies in Norway and Sweden highlight this shift from P2P file sharing to music streaming as outlined in the following analysis.

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Is Streaming the Next Big Thing? – What Consumers Want

The question if streaming is the next big thing for the music industry will be eventually answered by the music consumers. Several studies were conducted in past few years – most of them commissioned by music industry bodies – to assess the future potential of music streaming. It is essential for music streaming services and the copyright holders (labels and music publishers) if consumers are aware of streaming services, if they are using them frequently and if they are prepared to convert from Freemium to subscription models. Therefore the results of the studies are important indicators for the future development of the music industry. Although they provide different and even contradictory results – due to a different methodology – they help us nevertheless to understand music consumption behaviour in the digital age. In the following I would like to review some of the studies published in the past three years.

How Bad is Music File Sharing? – Part 25

The Joint Research Centre (JRC) of the EU Commission recently published a study entitled “Digital Music Consumption on the Internet: Evidence from Clickstream Data” with remarkable results. The authors, Luis Aguiar and Bertin Martens, concluded that music file sharing as well as music streaming have a significant positive impact on legal music downloads. The study is based on Clickstream data from Nielsen NetView. The database contains all the clicks of 25,000 Internet users in France, Germany, Italy, Spain and the United Kingdom for the calendar year 2011. In the following the main finding “(…) that digital music piracy does not displace legal music purchases in digital format” will be further investigated.