Local music biz bucks downturn

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The global music industry has hit a sour note in recent years, but paid streaming services like Spotify and Wimp have reinvigorated the Norwegian market. While young music fans have skipped CDs, they’ve also turned away from illegal music downloads in favour of premium paid streaming sites.

Wimp's streaming service is available in Scandinavia, Poland and Germany. Young Norwegians have largely turned away from buying CDs and illegal downloads, instead using paid services to stream music on their smartphones, tablets, computers and network players. Record companies globally are trying to follow Scandinavia's lead and turn around falling sales. PHOTO: wimpmusic.no

Wimp’s streaming service is available in Scandinavia, Poland and Germany. Young Norwegians have largely turned away from buying CDs and illegal downloads, instead using paid services to stream music on their smartphones, tablets and computers. Record companies globally are trying to follow Scandinavia’s lead and turn around falling sales. PHOTO: wimpmusic.no

Four years ago, the Norwegian music industry was worth NOK 520 million (USD 84.5 million) and still largely driven by disc sales, reported newspaper Dagens Næringsliv (DN) recently. Between 2010 and 2013 physical sales plummeted from almost NOK 400 million to less than NOK 150 million. During the same period paid streaming increased in value from about 50 million kroner to 400 million kroner, catapulting the industry to NOK 603 million in music distribution. The industry’s still far behind the NOK 1 billion it was worth in 2004, but has experienced consecutive growth over the past two years for the first time in almost a decade.

Streaming programs like Spotify charge users NOK 99 a month (USD 16.50) to listen to ad-free music via computers, smartphones and tablets. Artists earn around seven Norwegian cents (øre) each time one of their songs is streamed. A free version with advertisements between songs is also available. “I’ve subscribed to Spotify for two years now,” said 18-year-old Rikke Øren. “In the space of that time I haven’t bought a single record.”

Record companies say it doesn’t matter that young people aren’t buying CDs anymore. “Before Spotify and Wimp came, they weren’t buying CDs either,” said Marte Thorsby, head of the Norwegian branch of the International Federation of the Phonographic Industry (IFPI). “I think many forget that. They sat on Pirate Bay and downloaded illegally.”

Taking the lead
“In Norway and Sweden we have good economies, are well-advanced in the use of new technology and almost everyone has a smart phone,” said Rolf Kristian Presthus, owner of music store chain Platekompaniet which owns a share in Wimp. “That’s a big help when you are selling streaming services.”

Presthus believes the rest of the world will follow Scandinavia’s example. “When we invested in Wimp, it was with the idea that streaming would become dominant. The format has many advantages when you compare it against downloading or physical records. Moreover, Spotify has proved it can cut through in countries other than Norway.”

Thorsby told DN global record companies are looking to Norway to see how streaming breathed new life into the industry. “Of course, it takes less time to turn a small market,” she said. “In addition downloading records never took hold in Norway like in other places.”

Changing industry
Changes to the way people consume music could make it tougher for Norwegian artists, warned Thorsby. She said young listeners drove streaming services’ dominance last year, with Swedish producer Avicii, viral hit The Fox’ by Norwegian brothers Ylvis, and Miley Cyrus’ ‘Wrecking Ball’ the top three most streamed. Meanwhile the top five albums were all by Norwegian artists. “We’re seeing an almost artificially high proportion of Norwegian music among physical sales,” said Thorsby. “It has become more important to be in the right place at the right time.”

Øren said while she and her friends don’t read album reviews anymore, they still discover new music by sharing their playlists. “I hear much more music, and much more different music than I did before,” she said.

Meanwhile, a new streaming service hitting the market. American producer and rapper Dr Dre collaborated with other musicians, including rocker Trent Reznor of Nine Inch Nails fame, to launch Beats Music 21 this month. It has been designed to work on several platforms, and differs from other streaming services in that listeners will get playlists tailored by staff to their individual tastes, rather than automatic data generated lists reported newspaper Dagsavisen.

newsinenglish.no/Emily Woodgate