Remember how we’ve been told for years that Spotify is the solution to the record industry’s problems? Remember how we’ve been told that Spotify is the solution to piracy? Remember the stories of how “sales are growing” in Sweden and Norway?
Well guess what? According to Digital Music News (reported by IFPI) overall sales in Sweden and Norway are actually down for 2014.
Hmmmm… Click the links below…
We’ve said it before, and we’re willing (and happy to be wrong) that streaming economics, specifically of the Spotify variety are unsustainable. That doesn’t mean the economics can’t be changed, or that streaming doesn’t work and can not work – it just means that the predictions about growing revenue via Spotify are wrong.
We’ve questioned the philosophy and math behind streaming for a while now and it appears some of our criticisms and concerns are coming true. For example we noted that the Spotify per stream rates are dropping as more users are added to the service.
If overall revenue continue to decline, especially in the most promoted and championed markets in the world, what does that say for the rest of the world?
We previously reported that the per stream rates are dropping as the service add more users (graph below). This new data suggests that not only is the per stream rate dropping, but in two the leading countries in the world overall revenues are also down.
It’s just math.