Fjord focus: What Scandinavia tells us about the future of streaming in the UK

Fjord focus: What Scandinavia tells us about the future of streaming in the UK

All good things must come to an end. The question is: when?

The UK has been enjoying a streaming boom for so long, it’s tempting to think it might go on forever. But all markets mature eventually, so when will streaming peak?

To predict that, it’s worth looking at our Scandinavian cousins. Sweden and Norway – birthplaces of trailblazing DSPs Spotify and Wimp (now Tidal) – have long been recognised as pioneering streaming markets. Both continue to punch above their weight on the format: Sweden is ranked the No.12 global streaming market, but only No.29 for other digital formats, and No.18 on physical. Norway is ranked No.17 on streaming, No.30 on other digital and No.25 for physical.

And, while there are plenty of differences with the UK (for example, our physical sales were never laid quite so low by piracy as in Sweden, beset by another, less-welcome domestic pioneer, The Pirate Bay), they are the most apposite comparisons available.

Looking at the stats in the IFPI’s always-fascinating Global Music Report, in terms of the percentage of trade value that comes from streaming, the UK finished 2018 slightly ahead of where Sweden and Norway were back in 2012. In 2018, streaming accounted for 61.5% of UK sales trade value. In 2012, that figure was 58.6% in Sweden and 47.7% in Norway.

In 2018, Sweden got 89.4% from streaming and Norway 90.5%, as close to saturation as any global market that once had a significant physical business gets. But that percentage has only inched up in the last few years (Sweden was at 81.7% in 2015, 83.6% in 2016 and 86.4% in 2017. Norway was at 77.4% in 2015, 83.1% in 2016 and 85.5% in 2017). So, if the UK follows a similar pattern to Scandinavia, it may only have a couple of years of explosive streaming growth, at least in terms of share of sales revenue, to go.

So what happens then? The good news is, Scandinavia has still found a way to keep expanding. And, significantly, that's happened despite Norway (94.8%) and Sweden (94.3%) deriving the vast majority of their streaming income through subscriptions, rather than ad-funded streams.

Despite streaming saturation in a nation of converts, revenues are still growing. Indeed, total sales trade value grew faster in Sweden (4.3%) than in the UK (2.9%) last year, although across all recorded music revenues, which includes sync and performance rights, the UK posted a bigger rise. Meanwhile, in Norway, Spotify actually increased the price of a streaming subscription, and income from audio streaming rose 5.3%, suggesting the market may not be quite so inflation-resistant as some would have you believe. 

Of course, not everything that happens in Scandinavia can be replicated here, otherwise we’d all be better looking and be eating reindeer for breakfast. But anyone planning for an almost-all-streaming business – and that should be almost everyone – should take a look across the North Sea. Whether it's 2021 or shortly after, the future will be here before we know it.

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