By Maddy Savage BBC News, Stockholm
March 15, 2024
Image source, Getty Images
image captionAbba can take some credit for Stockholm's bustling music tech scene
From Abba to Spotify, Avicii to SoundCloud, Stockholm has produced both the world's most successful musicians and music technology companies.
Sweden has won the Eurovision Song Contest a record seven times, jointly holding the gong with Ireland, and this year's competition will be hosted by Malmö.
Its heritage is evident the moment you step off the subway at Stockholm Central Station.
Sergels Square, the capital's main square paved with black and white triangles, is home to the Avicii Experience, an interactive museum honoring the late Tim Bergling. He grew up here and went on to become one of the world's best-selling DJs under the artist name Avicii.
Per Sundin, CEO of Pophouse Entertainment, which runs the museum, sits on the 15th floor. The company is focused on creating the “next generation” of high-tech entertainment experiences, including incorporating London's Abba Voyage stage show, featuring Avatar versions of Sweden's biggest supergroup, into its portfolio.
The company is planning new shows in 2027, including a digital version of American rock band Kiss, after testing the technology at the band's last real live show last year.
“What are the similarities between Kiss and Abba?” Sundin asked rhetorically from his private office with floor-to-ceiling windows. “They really have super fans, and both artists have extensive catalogs and a global presence all over the world.”
Despite selling more than 2 million tickets for Abba Voyage since May 2022, Pop House Entertainment (American director George Lucas' visual effects company Industrial Light & The company has not yet realized profitability on its investments, including the technology (developed in collaboration with Magic), he said. and the East London Arena, which is dedicated to events.
Image source, Maddie Savage
image captionPer Sundin's company uses virtual technology to keep bands performing
But Sundin, a former Universal Music executive, said he believes in the concept and hopes it can be applied to a handful of other big-name artists in the future.
“This is for people who can't tour anymore, who can't make themselves this good.” [as they were]… or [want to] We do different things with their musical heritage,” says Sundin.
Pop House's innovation follows a series of other music technology success stories from Stockholm, a capital of just 1 million people.
Daniel Ek's Spotify launched here in 2008, but SoundCloud was founded a year earlier by two students at the Stockholm School of Economics, Alex Jung and Eric Wolfors. Later the business moved to Berlin.
Other companies that have made an impact globally include Soundtrack Your Brand, a subscription service that allows businesses to play commercial music without licensing issues, and Soundtrack Your Brand, a rights-free music platform for content creators. One example is Epidemic Sound. Epidemic Sound's value was recently valued at SEK 12.5 billion (£950 million, $1.2 billion), according to Swedish business news site Dagens Industri.
“Everyone knows there must be something in the water,” laughs Sarah Harlin, co-founder of Stockholm Music City. Stockholm Music City is an organization that encourages collaboration between the capital's music and technology sectors and provides support to start-up companies.
Image source, Maddie Savage
image captionSarah Harlin says Swedish startups have a culture of collaboration
On a more serious note, she argues that there are several key ingredients to Stockholm's recipe for music technology success.
These include Sweden's historically strong music scene, including artists such as Roxette, The Cardigans and legendary pop producer/songwriter Max Martin, cementing the reputation established by Abba and We give credibility to Swedish technology companies that focus on relevance.
Additionally, the country has long had a tech-savvy population, and many of today's entrepreneurs grew up in Sweden in the 1990s, when tax breaks for home hardware followed by the early adoption of broadband. I did.
Sweden's business culture, which tends to encourage cooperation over competition, also creates a collaborative ecosystem, Harlin argues.
“If we notice someone else is doing the same thing, we reach out to each other and figure out how we can do it together,” she says. “That often means no one succeeds, but everyone succeeds.”
One recent example is Elk, a company that provides a remote collaborative recording platform for artists. The company was founded after realizing that two local companies were developing similar software tools.
Ms. Harlin has just finished a meeting at The Node, a physical recording studio hub that opened last year in the same square as the Avicii Museum and includes some of the late DJ's equipment. “Where there are producers, there will be music technology startups, and there will be investors coming to check them out,” she says.
Late on a Monday afternoon, the neon pink-lit cafe area is mostly empty save for a few indifferent staff members. But Harlin says the space is creating a global buzz. “We’re already noticing people coming here from New York and London to check it out.”
Seedtable, a platform that tracks Europe's fastest-growing companies, lists 69 music and audio startups to watch in 2024, 13 of which are based in Stockholm It has a larger population than any other city.
Image source, Maddie Savage
image captionAnkit Desai is looking for a 'diamond in the rough'
A few blocks away from The Node, one of them, Snafu Records, is based in a shared office space with parquet floors and a cocktail bar.
The startup, described by co-founder and CEO Ankit Desai as “the world's first AI-enabled music label,” uses an algorithm to search the internet and identify emerging artists that are likely to make an impact. developed.
“We try to find diamonds in the rough…underrepresented artists and give them a chance to shine,” Desai says.
Since its founding in 2019, the company has signed over 150 artists. Snuff Records takes 50% of all artists' earnings, while most traditional labels take up to 80%, Desai said.
The startup's investors include Agnetha Fältskog (Agnetha from Abba), Finnish gaming entrepreneur Mikko Kodisoja and Pophouse Entertainment, with a second funding round of $7m (£5.5m) expected in late 2023. ) has been procured. However, Desai admits that funding has been difficult. It's been “much more difficult” than when he first launched the label in 2019, and the company has yet to turn a profit.
Emil Widhagen, a journalist at Swedish technology and startup news site Breakit, says many of Stockholm's music technology startups are facing similar challenges to Snuff Records as a result of the global economic turmoil. claim.
“In tougher times, people tend to turn to safer investments, and music technology companies are generally unprofitable, including even Spotify.”
In fact, Spotify, the world's largest subscription audio streaming site, posted a loss of around €75m (£64m, $82m) in the final quarter of 2023, despite cutting around 1,500 jobs. reported. However, even though the company increased prices, subscriber numbers still increased by 4%.
Some music technology entrepreneurs argue that the speed of global growth in AI tools is also putting pressure on Stockholm's rich music technology ecosystem.
Image source, Maddie Savage
image captionEmily Olson says funding is now harder for startups than ever before
“One of the biggest challenges is just trying to keep up with everything,” says COO and CEO of music technology startup Corite, which uses crowdfunding to help artists get financial support from their fans. says co-founder Emily Olson (and rewards fans if an artist scores a hit). “It's really a competition. There are a lot of companies doing a lot of great things at the same time.”
Corite has also struggled to turn a profit and is looking forward to new tools for artists and other content creators that will be released later this year.
“We are definitely humbled as we try to raise money again,” Olson said. “I think companies are going to have to prove it a little bit faster than they used to.”