Newsletter September 26: Streaming of music and radio – in the Nordics and elsewhere

26 September 2018

The Nordic radio and music streaming market is undergoing rapid transformation. This is also the case in the US, where we on Monday learned that one of Spotify’s contenders, Pandora, was acquired by SiriusXM. Looking at consumer behavior in the Nordics, Youtube Music is on the offensive, pursuing market shares following its recent launch in June. This may challenge Spotify’s dominant position in the Nordic region, as competition is ramping up and the audio streaming market matures.

First off, satellite radio company SiriusXM is acquiring US-based music streaming service Pandora for $3.5 billion. Pandora has roughly 70 million monthly active users, out of which 5.6 million are premium subscribers that pay $9.99 per month. Advertising accounts for close to 70% of the revenues according to the company’s Q1 report. Pandora’s basic offer is a radio-like service, but in addition a subscriber package was launched in 2017, called Pandora Premium (where users can create custom playlists). Pandora has had quite some headwind with its premium concept, as the US market seems to consolidate around major actors such as Spotify, Apple Music and Amazon Music.

According to half-year figures published by UK-based Midia Research, the global audio streaming market consists of approximately 230 million subscribers as of June 2018, up 15% from roughly 200 at the beginning of January. Spotify maintains a comfortable lead with a 36% market share, unchanged since Q4 17, runner-up Apple Music controls 19% of the market, adding 2% during H1 18. Amazon added half a percent of market share during the first half of the year remaining stable at around 12%.

Zooming in on the Nordics, total ad spend 2017 amounts to 8.5 billion EUR according to IRM. Internet-based advertising accounts for over 50% and traditional broadcast radio advertising accounts for 4% or 320 million EUR in the Nordics.

Focusing on Sweden, Mediavision recently presented an outlook on the Swedish audio streaming landscape at Radio & Poddagen. Today, 6 out of 10 Swedes are paying for an audio streaming subscription. Roughly 75% of the consumer spend is allocated to music and the remaining 25% on audio book services. The music streaming market is transforming quickly, also pushed by new actors and services entering the fray.

In an international comparison, Sweden is a very strong market for music streaming. This is hardly surprising, as Spotify has its home turf in Stockholm. Out of money spent on music subscriptions, Spotify captured approximately 80% in August 2018. However, an actor such as Youtube Music, which launched in the Nordics in June, could potentially challenge this. Mediavision’s analysis reveals that Youtube Music is the second largest music streaming service on the Swedish market, but Spotify still reaches 10 times the number of subscribers.

Subscribing Swedish households per service, August 2018

Mediavision blogs:

Summer TV viewing and the FIFA WC
As many of us are now returning to work after a splendid summer, we’re taking a quick glance at the development of the 2018 traditional TV viewing so far. It’s of course with a special focus on summer ratings, particularly since Sweden this year outperformed all expectations and made it to the quarter finals in 2018 FIFA World cup in July.

Mediavision press releases:

Sports contributes to increased online TV consumption
When summarizing the second quarter of the year, no decrease in the Swedes appetite for video streaming services is to be seen. Yet again a new record is noted as half of the Swedish households now subscribe to at least one streaming service.

Industry news:

Bodyguard most watched drama since 2008
The BBC drama Bodyguard kept an average 10.4 million viewers as the series came to a close on Sunday, during the final episode viewership peaked at 11 million. No BBC drama has drawn a bigger audience since Doctor Who in 2008.

TV2 and NENT in Champions League conflict
In May NENT Group sold the rights to broadcast two matches per round of Champions League to Norwegian TV2. Now the two parties are in a disagreement regarding the games which TV2 has exclusive rights to.

Twitch blocked in China
Amazon-owned Twtich has recently been blocked in China. Following several e-sports events being streamed on Twitch during the Asian Games Twitch rose drastically in popularity. The reason behind blocking Twitch is unknown as of yet.

Snapchat to launch visual product search
Snapchat is adding visual product search, letting its users identify products by capturing them with their camera. The visual search feature is powered by Amazon and users will be able to easily order identified products from Amazon.

Comcast wins auction for Sky
Comcast has triumphed over 21st Century Fox and Disney in the auction for Sky with a winning bid of £30.6 billion. Sky has 23 million subscribers and will provide Comcast with a powerful launchpad for new digital services.

Brits spend 12 hours a week watching VOD
According to new research commissioned by Ukactive Brits spend 12 hours per week watching on-demand video, such as Netflix, Amazon or BBC iPlayer. Furthermore, UK adults spend 17 hours per week on smartphones and tablets.

Audible brings audiobooks to Apple Watch
Amazon-owned audiobook site Audible has announced its bringing its audiobook library to Apple Watch. Users will be able to listen to audiobooks and manage their library directly from the Apple Watch screen.

Mediavision in the news:

Sport bidrar till ökad TV-konsumtion online
När årets andra kvartal nu summeras syns ingen avmattning i svenskarnas aptit på streamingtjänster för rörlig bild […].

Industry events

*Events where Mediavision will be presenting