The recorded music industry is bullish on increasing the prices of premium streaming services in key markets.
Universal Music Group shareholder Bill Ackman has been particularly vocal on this topic, repeatedly noting his belief that “regular price increases will become the norm in the audio streaming industry as they are in the video streaming industry”.
Other industry leaders to voice their belief that there is room for continuing price rises include UMG boss, Sir Lucian Grainge, Sony Music Group‘s Rob Stringer, and Warner Music Group‘s Robert Kyncl. (Kyncl, by way of example, has said: “We believe the market will bear further price increases in the future, and we’re expecting that they’ll arrive on a more regular cadence than in the past.”)
In most key music industry territories, this exact pattern is playing out.
For example, despite price rises at Spotify, Apple Music, YouTube Music, and Amazon Music last year, the United States saw its volume of individual music streaming subscriptions increase by over 5 million YoY (according to RIAA data, see below).
Spotify has just increased the price of its flagship individual Premium tier in the US for the second time in 12 months; having hiked its monthly price from $9.99 to $10.99 in July 2023, SPOT recently moved this price up again, from $10.99 per month to $11.99 per month.
(For this article, we’ll steer clear of discussing how much of the spoils from this new pricing structure will go to music vs. audiobooks!)
However, there is another traditionally important music market where a different pattern appears to have begun becoming apparent: Sweden.
Every two years, a group of three collection societies in Scandinavia – KODA (Denmark), TEOSTO (Finland), and TONO (Norway), collectively known as Polaris Nordic – conduct a survey of music listeners in the Nordics, in conjunction with YouGov.
The latest of these reports has just been published. It reflects data pooled from interviews with 4,000 separate individuals across the Nordic region in May 2024.
The report includes some positive stats for the music business rightsholders, including the fact that 55% of people in the Nordics now pay for a music subscription—up from 53% in 2022 and 49% in 2020.
One particular statistic, however, may give the wider music industry some pause for thought.
According to the YouGov survey, 56% of people in Sweden now pay for a premium subscription – either directly or via a bundle.
Yet that figure was down vs. the 59% of respondents in Sweden who said they paid for a premium music subscription in 2022.
According to the YouGov survey, in the same timeframe, the number of people exclusively listening to music via free tiers of streaming services (or free trials) shot up in Sweden, from 34% in 2022 to 39% in 2024.
So what’s going on?
Sweden, the birthplace of Spotify, has long proven itself to be an accelerated market in terms of the maturity of music streaming.
During the rapid global rise of music streaming/subscriptions from 2015-2020, Sweden often set the pace, with higher levels of market penetration than most other territories in the world.
Ten years ago in 2014, for example – just three years after Spotify launched in the United States – streaming was already claiming over 79% of the total music market in Sweden.
Sweden’s early-adopter streaming status in the modern music industry has also been reflected in pricing in the territory.
In 2021, years before it did the same in the US, Spotify raised its monthly individual Premium price in Sweden by 10%, up from 99 SEK (around USD $9.99) to 109 SEK (around $10.99).
Today, Spotify’s pricing in its homeland has evolved again.
Swedish customers who take up an individual Premium subscription are offered a month’s free trial to ad-free Spotify. After this, they must pay 119 SEK (around USD $11.21) per month.
According to the new Polaris Nordic/YouGov poll, this pricing structure may test the willingness of some Swedish consumers to spend on music.
Within the YouGov survey, Nordic consumers who don’t currently subscribe to music streaming services were asked if they agreed with a series of statements regarding why they’re refusing to put their hands into their pockets.
Two of those statements (see below) were particularly telling:
- “[The paid service] is too expensive” saw 36% of respondents in Sweden agree, up from 33% in 2022;
- “There are many options for streaming music for free, so I don’t see why I should pay” saw 27% of respondents in Sweden agree, up from 24% in 2022 (see below).
To be clear, the decline in Swedish consumers who say they subscribe to a paid music service in 2024 vs. 2022 may or may not be related to the economic sensitivity of these consumers when it comes to streaming pricing.
Also worth mentioning: According to IFPI statistics, Sweden actually saw a YoY increase of over 6% in terms of recorded music industry subscription streaming revenues in 2023.
And remember: the YouGov poll mentioned here merely reflects the answers of a 4,000-strong sample of people across the Nordics. Sweden alone houses a population of more than 10 million people.
There also still appears to be room for growth RE: music subscriptions in Scandinavia. While 55% of the 4,000 respondents said they currently pay for a music streaming subscription, that was significantly lower than the proportion who pay for TV and movie streaming, which currently stands at 83% (up from 81% in 2022).
Even so, these statistics remind us that while repeated streaming subscription price rises in key markets seem like a sensible strategy for growth-chasing music rightsholders, the behavior of consumers is never guaranteed.
You can read the new full Polaris Nordic/YouGov report in full through here.Music Business Worldwide