At the start of 2012, the European Music Office and Eurosonic Noorderslag helped publish a report based on results gained from analytics company Nielsen, on the top 200 air-played and legally downloaded songs in France, Spain, Germany, the Netherlands, Poland and Sweden. The report showed that Swedish radio stations display the highest level of support for their home-grown artists of all countries investigated: they received 38% of the airplay; however, only 10% use mother-tongue lyrics. Heavy borrowing of English does allude to a higher rate of sales to their home country – 44% of all downloads in Sweden were of Swedish artists. This translation is due to the country being a musical powerhouse looking to globalise further.
Several of the big dance acts that have crossed over into charts in English-speaking countries have been from Sweden which is no surprise given that they are the world’s third largest exporter of music behind the US and UK – in 1999 Sweden’s Ministry of Finance report found that royalties from external territories was higher than that of the US, per capita. Much of this opportunity will have been afforded to them by previous breakthrough acts from the country that performed in English, e.g., ABBA, Europe, Robyn. It’s also home to Max Martin, one of the most prolific pop producers in history; since 1999 he has written or co-written and produced or co-produced 22 Billboard 100 songs, behind only Lennon and McCartney. Sweden has known how to make hits since ABBA cabbage-patched onto foreign screens, some kind of expansive in-house way of working, some kind of socialist Motown production line. Such a number of contributions in singular segments has helped push forward the lifespan of the music industry and the value of consumption, the country’s flatpacking view of technological advancement playing no small part.
Autonomy for Swedish artists to perform to the best of their domestic and global commercial ability is a far cry from the situation in France. In 1994 the country passed a law stating that 40% of all music on French airwaves must not use lyrics in a foreign language. Several of the main radio stations feel the quotas are unfair due to the popularity of French artists like Daft Punk who choose to produce in English, this is why they work. A big part of the globalisation of English-speaking music has been through the easy access over most first world countries to services like Spotify, not subject to any quotas, simply helping people worldwide find what they want to hear, whether they be American or British or otherwise – this was an argument put forward by radio stations to protest the sanctions. In response the SNEP (Syndicate National de l’edition Photographique) and other bodies that defend the quotas have encouraged people to refer to a similar bill passed in Canada in 1971 regarding the protection against dominance from US acts to preserve and expand the local music scene. In the report it was found that only 25% of music on French radio used French lyrics and only 31% were works from home-grown artists.
In 2015, digitally distributed music became the primary revenue stream in recorded music, overtaking sales of physical copies – in percentages digital sales made up 45%, whereas physical were 39%. In 2016 IFPI published a report detailing a 10.2% increase in digital revenues, leaving the figure in the region of $6.7 billion. From a different direction this report shows the clear modernisation when there is also a 45.2% rise in streaming revenue, leaving 2016’s streaming figure at $2.9 billion – in 2014, 80% of Sweden’s recorded music market income came from streaming. This has slowed down the record labels recouping losses in transitioning to the predominantly digital model; they still want to wedge a foot back in the door, and with the size of services like Spotify they can’t beat them so might as well join them.
In 2015 The Verge came across a contract between Sony Music and Spotify from January 2011, two months before Spotify set up in the US, it’s most profitable territory. It was a two-year deal with the option of a one year extension, laying out Spotify’s obligations regarding annual advances to the label, target subscriber numbers and the early calculations for how plays would transfer to royalties.
A particularly dodgy part of the agreement is the Most Favoured Nations clause, saying that Sony must keep its triggered-through-met target advances higher than those for other labels. In section 4(a), Spotify agrees to pay a $25 million advance for the two years of the contract: $9 million the first year and $16 million the second, with a $17.5 million advance for the optional third year to Sony Music. The contract is spread over 42 pages; however, it fails to detail another eyebrow-raising area in the 15% of ad revenue: in 2014 it earned $110 million from this area alone – how is this used? Also with the advance money paid to Sony, whether it is divided as a kitty amongst those who need to have a presence on Spotify, thus earning their advances, or if it’s kept to themselves.
After Taylor Swift’s departure from the platform, many musicians popped up to support her, naming streaming services that paid a shameful price of penny per play, Thom Yorke lamenting a similar and more abrasive expression. This contract shows Spotify cannot be working alone on their endgame. According to its financial disclosures, the majority of Spotify’s revenue, around 80%, has been flowing to the rights holders. Almost a full 10 years after its launch, it’s the widest shoulder-padded middleman in the music industry, yet can’t seem to turn a profit.
There are some powerful industry voices saying labels are by far the main instigator of any shady dealings with service providers. Artist’s royalties from songwriting are a varying part of the debate, changing in importance over genres. In 2014, Pandora won a court case against ASCAP, complaining it couldn’t afford to allocate the agency collecting for songwriters more than the 1.85% it paid their clients at the time due to the fact it was paying labels 49% of its revenue.
Unsurprisingly Sweden’s STIM showed a patriotic and collaborative attitude to help get Spotify off the ground, also the UK’s PRS offered Spotify extremely low rates, which may have started the slippery slope in the seemingly offensively low rate in what artists get paid – those supposed to be in their corner are part of the problem. Artists, publishers and collection societies could feel that getting out of the streaming environment completely would be beneficial, as they wouldn’t really feel the effects of that lost revenue stream, while keeping some exclusivity or possibly partnering up in a more lucrative manner – in the US this is not an option, but Europe is a more democratic operation. One of the key players in the UK industry is the Beggars Group, all of their imprints split all royalties 50/50 with artists – although even they are not free from the subliminal scathing of some of their biggest artists like Mr Yorke and Adele who are more than conservative with uploading to the service. The in-house attitude of Sweden may be part of the problem too, as 2013 saw a number of Swedish artists gearing up to sue Universal and Warners – the other major label not involved in the process was Sony, who was already familiar with Spotify.
Although Spotify have championed ownership to artists, going so far in cases to remove work from the service upon finding out the rights holders weren’t paying their artists, they have not chosen to carry themselves as transparently when the query comes to their own profits. Morals tend to intensify with self-awareness. There is far less label reliance to have music heard through streaming, no packaging with worldwide physical distribution or a traditional marketing plan – the split should be far more even than 90% of the streaming revenues going to the labels, according to the Swedish MU who have supported the artists in their attempts to sue the two majors.
Spotify have also benefited greatly from the country’s standing in the piracy capability league. Daniel Ek is far from small fry in the community of file sharing line peddlers – links with uTorrent gave him access to co-developer Ludvig Strigeus, who has been referenced as the means behind Spotify’s music being heard sooner than when using their competitors after hitting play; a feature that could easily be deemed indispensable in the increasingly impatient senses of the consumer.
Another Swedish contribution to the industry came in 2003 with The Pirate Bay – in 2001 the country’s revenue from recorded music sat at 1.6 billion SEK, in 2008 it was 782 million. In 2008 Spotify was launched, the streams leading to near the billion kronor mark again at 991m SEK. The following year would be breakthrough moment for the industry inside Sweden; the trial and subsequent conviction of The Pirate Bay’s creators, a Europol imposed law forcing ISPs to provide a name of IP address owners thought to be sharing files as if they were Linda’s pictures from Tenerife and the unbelievable burst of Spotify users, due in part to the invite-only basis. An industry that was 60% smaller worldwide since the turn of the century suddenly had a new stream of revenue.
Dr Ola Johansson wrote an article in 2010 where he applied theories of political, social and economic landscapes in Sweden to gain an understanding of why they’re so good at pop. He states that the preternatural creation and admiration of role models date back to sporting greats such as Björn Borg being the country’s first real superstar – ABBA being present at the same time; creating the airy faceless music they did created something similar to a sub-genre of export. The fact that Swedes have the world’s highest percentage of English-as-a-second-language speakers can only help when relating to imports from the two edges of the Atlantic – there are strong cultural and linguistic links between Sweden and the UK/US; nuance is easily picked up and there is a shared priority of melody in production. Modern and minimalist aesthetics have placed the country at the forefront of mainstream trend; their taste in music has verged to more niche trends, giving off cool fumes and making it an attractive touring option. The late 80s and 90s saw more sharing with the outside world made available to consumers – particularly MTV acting as Spotify does now; access on tap, dependable vagueness. The Ford model applied amongst local creatives is also a factor, Johansson believes. He references geographic researches at Uppsala University relating Michael Porter’s theories to the local industry and found perfectly aligned networks of creators and professionals, particularly in the capital. That city can lead to a problem in this domain – it’s too one-dimensional. The entire country has the same population of London and a similar number of grime artists find themselves able to expand into foreign territories to claim their livestock and women. Sounds considered niche in Stockholm’s parameters tend to age well over the course of compiling foreign press kits; historically death metal has been made up of a considerable number of Swedish line-ups, more presently there is a budding and trendy rap scene that has produced artists like Silvana Imam and Erik Lundin who are gaining appreciation home and abroad. 30% of school-aged kids attend government provided extra-curricular music-based programs, this support doesn’t stop when the jobs start. The Swedish Arts Council dishes out an estimated $40 million annually to help support artists, venues and programs; it’s also notable that there is great transparency between funding agencies and artists.
The ever-changing landscape of the music industry is at fever pitch where profitability is concerned, Sweden is a crucial deciding factor in the next implosion. With the growth in popularity of foreign language music from across Europe in English-speaking countries, keeping the bronze medal will be no easy task. The winner-take-it-all attitude being displayed by the gatekeepers and their international cohorts could easily mean the shutting down of the powerhouse – given the viably expansive infrastructure that objective hit-making afforded them, any falling off would make such a concession all the more disastrous.
