Guess How Much YouTube Contributes to the Swedish Music Economy?

In 2016 Music Industry Report, IFPO CEO Boldly Criticizes YouTube
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In 2016 Music Industry Report, IFPO CEO Boldly Criticizes YouTube
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Matt Brittin, head of YouTube Europe (IAB UK (CC by 2.0))

The Swedish music industry is booming thanks to streaming and vinyl sales.  So why is YouTube contributing so little?

On April 12th, IFPI Sweden published its annual music figures for 2016.  The numbers follow what the rest of the music industry has experienced: rising revenue thanks to music streaming.  However, the report also highlights dismal numbers for YouTube.

IFPI Sweden saw increasing use of music streaming services.  In 2016, total music sales increased 6.2%, up to 1.13 billion krona ($125.156 million).

Music streamers like Spotify and Apple Music accounted for 82.3% of total music sales.  Subscription platforms generated 906.3 million krona ($100.379 million).

In an unsurprising turn, IFPI Sweden reported falling CD sales, down 9.4% from the previous year to 106.2 million krona ($11.76 million).  However, the same report shows vinyl sales boomed 38.7% to 45.339 million krona ($5.02 million).

In bad news for video services (namely YouTube), the IFPI highlighted poor sales contributions.  In the first paragraph, roughly translated from Swedish, the report reads,

“Revenues from streaming music video services, including the world’s largest music service YouTube, account for only two percent of total revenue.”

Video streaming revenue totaled 22.346 million krona ($2.474 million).  These numbers were just under free ad-supported audio streaming (23.777 million krona/$2.479 million) and slightly above digital downloads (18.546 million krona/$2.054 million).

Ludvig Werner, IFPI Sweden CEO, said,

“We have become used to the streaming music services in recent years creating long-awaited growth in the Swedish market, but it is important not to forget how positive it is that even in 2016 we have increased by more than six percent.

“With ten years of experience in streaming… we know how important it is for everyone in the food chain, from composers to performers and record labels, is subject to the same regulations.

Werner also praised one service (Spotify) that has displayed a willingness to negotiate with rights holders. Thanks to these negotiations, said service can pay out higher revenues. However, he boldly criticized video streaming leader YouTube. Their unwillingness to pay out an equal amount of revenue simply doesn’t provide the Swedish music industry with sufficient revenue.

“One service negotiating with rights holders [Spotify] pays 60-70% of revenues. Another service [YouTube]… paying 8-10% is simply not sustainable.”

One Response

  1. Jim

    Yet another good article by Digital Music News – although the conversion from kronas to dollars was off in the case of vinyl.

    Digital Music News doesn’t just rewrite press releases, they often find answers themselves.

    I’m wondering, why is youtube paying far less?

    Is it bandwidth costs? We know that a 1080p video file is a much bigger file that a mp3 encoded at 320.

    And we know that spotify has a lot more non free.

    Would be interested in seeing if bandwidth costs pay a large or minimal role in the lower youtube payouts.