Spotify Dominates Icelandic Music Market

Lucky Records in Reykjavík music

Overall revenue in Iceland’s music industry increased between 2018 and 2019, for the fourth year in a row. The sale value of sound recordings from distributors increased 18% between those two years, according to newly-published data from Statistics Iceland. Almost 90% of the sale value in 2019 was due to payments to streaming services. Streaming platform Spotify had a 98% share of all streaming of Icelandic music and was responsible for nearly 90% of total music sales.

Total Revenue Still Just Half of 1991 Revenue

Payments for music streaming are responsible for the increase, while at the same time, the sale of CDs and LPs has decreased year on year over a long period. The total sale value of CDs, LPs and digital files for streaming in 2019 was ISK 802 million ($6.35 million/€5.27 million), of which payments for streaming were ISK 713 million. Despite an increase in the sale value of sound recordings for the last three years, the total sale value in fixed 2019 prices amounted only to half of the sale value in 1999 (see Figure 1 below).

music sales hagstofan
Hagstofan.

For many years, releases and sales of CDs and LPs have been falling fast. The number of released titles on CDs and LPs decreased sevenfold between the years 2006 and 2019, or from 301 titles down to 41 (see figure 2).

Hagstofan.

The decline in sale of units has even been more severe. From the turn of the century, the number of sold copies has declined 17-fold. In 2019, the sale of CDs and LPs was 48,000 copies compared with 868,000 copies in the year 1999 when the number of sold copies was at its highest (see Figure 3). The number of copies sold per capita has fallen from 3.1 in 1999 down to 0.1 in 2019.

Fast growth of streaming revenue in the last few years has not fully compensated for the fall in revenue since around the turn of the century. In 2019, the total revenue was some ISK 802 million ($6.35 million/€5.27 million) compared with ISK 1.586 million ($12.55 million/€10.42 million) in 1999, calculated in fixed prices.

Icelandic Music Sales On the Rebound

Lucky Records, Reykjavík.

Sales of Icelandic music are making a rebound after more than a decade of decline, according to Eiður Arnarsson, director of IFPI Iceland, the country’s association of record makers. Eiður shared the results of a recent study of the local market on RÚV morning radio.

Eiður says Icelandic music continued to sell well during a global drop in music sales, which began at the turn of the century when listeners started being able to access music illegally for free. By 2010, however, sales of Icelandic music were also dropping like in neighbouring countries.

Recently, however, CD and vinyl sales have been going fairly well, even among young listeners. “[Vinyl sales] have definitely turned around,” Eiður stated. “Libraries, for example, in the capital, have been loaning out records diligently [and] that awakens young people’s interest in vinyl records and they start buying them.”

Nevertheless, streaming services like Spotify are now many music fans’ preferred method of listening to music. Spotify was first introduced in Sweden in 2008, coming to Iceland in 2013. Eiður says many Icelandic musicians now enjoy significant income from streams on the platform. “Spotify became what the market was always asking for,” Eiður remarked.“That is to say, nearly unrestrained access to nearly all music, but with good service.”