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Steamrolling

streamingSpotify is betting that what works in Stockholm will stream to the rest of the world, reports The Economist (3/22/14). "We think the whole world will look like Sweden," says Spotify chief Daniel Elk. Some three million Swedes currently "have streaming accounts, about a third of the population, of whom two-thirds are paying subscribers. If every market could reach such critical mass, the record industry would look very different. So far America has 6 million paid subscriptions — or two percent of the population."

This tantalizing prospect has the "world’s music executives … sending delegations to study how Sweden pulled off its musical makeover. Between 2008 and 2013 the turnover of the country’s recorded music market rose by around 27% … Streaming now makes up more than 70% of revenues." In part this was because "Sweden was early to have fast broadband. At first this facilitated piracy … but later it helped streaming to gain moment." Streaming was also bundled with mobile accounts, and monthly subscriptions proved attractive to Sweden’s relatively wealthy masses.

In addition,"digital downloads never became popular there, so there was not a rival digital technology to cannibalize. The switch to streaming may take a lot longer in countries where there is not such a high proportion of technophile consumers and where there is no successful homegrown streaming service to rally behind." Even in Sweden, it’s not expected that streaming will "restore previous highs. Sweden’s recorded-music industry is only 60 percent as big as it was at its peak, says Ludwig Werner of IFPI, a trade group."