MUSIC STREAMING FROM A SCANDINAVIAN PERSPECTIVE
Agenda • Revenue streams • Why is streaming a succes in Scandinavia? • Current discussions in Scandinavia
REVENUE STREAMS IN SCANDINAVIA
Millioner!
Music Turnover in Denmark! 1.600!
1.400!
1.200!
1.000!
800!
Koda! IFPI!
600!
400!
200!
0!
Where did you last discover a song you liked? 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
All
12-17 year-olds
Millioner
Recorded Music Revenue " Denmark 600
500
400
300
Vinyl CD Streaming
200
100
-
Download
2008 2009 2010 2011 2012 2013 2014
Digital Dominance Danish IFPI Revenue 2014
26% Streaming Downloads 16%
58%
Physical
Streaming Market Share 90% 80% 70% 60%
Denmark
50%
Norway
40%
Sweden
30%
USA
20% 10% 0% 2010
2011
2012
2013
2014
WHY IS STREAMING A SUCCESS IN SCANDINAVIA?
http://www.koda.dk/fileadmin/user_upload/docs/1Press_Release_PolarisNordic_Digital_Music_Survey_2014__3_.pdf
Structural Framework • High smartphone penetration • Bundling music streaming with telco subscribtions • Effective mobile 4G LTE Network
Smartphone Penetration Serie 1 70% 60%
59%
56%
50% 40% 30% 20% 10% 0% Denmark
USA
CURRENT DISCUSSION TOPICS IN SCANDINAVIA
IS STREAMING A SUPERSTAR ECONOMY?
Digital tracks USA 2011 100% 90% 80%
2‰ represent 40% of sales
70% 60% 50%
94% sold less than 100 copies
40% 30% 20% 10% 0%
antal titler
antal kopier
102
189.758.000
100.000-999.999
1.412
318.473.000
10.000-99.999
13.492
374.827.000
1.000-9.999
74.246
212.571.000
100-999
382.720
111.117.000
10-99
1.620.959
48.697.000
1-9
5.927.729
15.722.000
1.000.000+
Source: Elberse 2013: Blockbusters
All streamed artists August 2013 100%
1,7 ‰ of streamed artists
90%
40,6 % of streams
80%
70%
100.000+
60%
10.001-100.000 1.001-10.000 50%
101-1000 11-100
40%
2-10 1
30%
20%
10%
0% Data: Danish WiMP users in August 2013
Artists
Streams
Superstar Economy?
Streams
Top 1% of artists account for " 70% of streams
Bottom 95% of artists account for " 10% of streams
Artists
Data: Danish WiMP users in August 2013
Fona!
Spotify!
Source: IFPI Denmark
Source: IFPI Denmark
Distribution of streams! Top 5.000 artists! 4.001-5.000! 3.001-4.000! 2%! 3%! 2.001-3.000! 5%!
1-50! 28%!
1.001-2.000! 10%!
501-1.000! 12%!
51-100! 11%!
101-500! 29%!
Data: Danish WiMP users in August 2013
WILL THE STREAMING ECONOMY EVER SCALE?
Distribution of a " DKK 99,- subscription 100,00 90,00
19,80
80,00 70,00
VAT 23,76
60,00 DKK 50,00
9,50
40,00
10,00 0,00
Koda Label
30,00 20,00
Streaming Service
45,94
Danes aged 12-‐64
Popula6on
monthly revenue
annual revenue
1%
38.468
1.767.202 DKK
21.206.424 DKK
5%
192.338
8.836.010 DKK
106.032.120 DKK
10%
384.676
17.672.020 DKK
212.064.240 DKK
20%
769.352
35.344.040 DKK
424.128.481 DKK
30%
1.154.028
53.016.060 DKK
636.192.721 DKK
40%
1.538.704
70.688.080 DKK
848.256.962 DKK
50%
1.923.381
88.360.100 DKK
1.060.321.202 DKK
75%
2.885.071
132.540.150 DKK
1.590.481.803 DKK
90%
3.462.085
159.048.180 DKK
1.908.578.164 DKK
100%
3.846.761
176.720.200 DKK
2.120.642.404 DKK
Share of Danes (aged 12-64) with a paid " music streaming subscription 20%
18%
14%
15%
15%
11% 10%
5%
0% 2012
Source: Koda’s Media Habit Survey 2015
2013
2014
2015
http://www.koda.dk/fileadmin/user_upload/docs/1Press_Release_PolarisNordic_Digital_Music_Survey_2014__3_.pdf
Challenges
Challenges
International Markets • Global competition • International niche markets
IFPI Denmark: DK vs Int repertoire 900.000.000 800.000.000 700.000.000 600.000.000 500.000.000 Dansk repertoire Internationalt repertoire
400.000.000 300.000.000 200.000.000 100.000.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Polarization (or Consolidation?) • Increased opportunities for mega stars, but harder competition for the ’middle layer’ • New economic cycles – Takes longer to recoup investment with streaming – Privileges Major labels
Distribution Policies • Pro Rata vs. User Centric settlements –
http://www.koda.dk/fileadmin/user_upload/docs/Analysis_Music-Streaming-In-Denmark_2014.pdf
Rasmus Rex Pedersen rasmusrex@rmc.dk (+45) 2238 2229