Skip to content

The revenue of Finnish music startups increases by 69% year on year

14.09.2016

In 2015, the revenue of Finnish music startups increased by 69% compared to 2014. Growth is also anticipated for the present year. Teosto and the Finnish Music Startups collective surveyed the figures for the industry in June 2016. The survey covered a total of 18 companies.

International market

The total revenue of startups increased from EUR 2.3 million in 2014 to EUR 3.9 million in 2015. Companies are also predicting substantial growth in their revenues this year.

Already, 92% of the revenue of companies aiming to reach international markets comes from outside Finland. Even though success stories are typically rare when it comes to startups, there is potential and rapid growth is excepted to continue; in the June survey, startups estimated that the revenue of the entire sector would exceed EUR 13 million by the end of 2016.

“It is important that most of the music startups open-mindedly pursue international markets as the domestic market in Finland is too small. The companies believe in rapid growth, and this development should be supported by obtaining more funding and developing cooperation between the companies in the industry,” says Jiri Koivuniemi, head of Finnish Music Startups.

 “The positive thing is that the growth is almost exclusively targeted at international markets where the competition is tough but the opportunities are immense. Music should be seen as an innovative platform for new services instead of simply content streamed from Spotify and other music services. In Finland, this development can now be witnessed, and the success stories of music startups will most likely be in the arenas of services related to teaching and learning,” says Turo Pekari, innovation expert at Teosto.

Shifts in business models

Continued rising trends in music startups include focus on services related to teaching and learning as well as a transition to commission-based business models. Services financed by advertising and business based on in-app sales are facing a downturn.

One of the shifts is the diversification of services. The share of applications developed for the stores of device manufacturers in the products and services of companies has dropped.  One potential future trend includes bots and different services developed for communication applications (such as WhatsApp and Facebook Messenger).

Obtaining funding—the greatest challenge for Finnish startups

The music startups felt that funding was their greatest challenge. The total amount of funding received by the companies covered by the report is about EUR 5 million, of which 22.7% comes from international sources. More than half of the companies have received public funding from Finnish sponsors such as Tekes. Obtaining private funding, i.e. mainly private equity investors, was considered challenging in Finland.

The competition for exposure in a country as small as Finland is difficult without large investments in marketing. The solution models proposed by the companies for facilitating the operations included tax relief for startups in the early stages of the business operations, granting funding for part-time entrepreneurs, and granting subordinated loans in exchange for the company’s stocks. Generally speaking, however, the companies considered the operational prerequisites of startups in Finland quite good.

Teosto is searching for new business models for the music industry. Operations are primarily carried out by organising innovation contests and developer events and networking with international operators. In September, Teosto and the Finnish startup company Artist Exchange signed an agreement that gives Teosto a 5% ownership stake in Artist Exchange. The cooperation between the organisations will focus on digital services that benefit performing artists and customers who buy live music.

For further information, please contact:

Jiri Koivuniemi, Finnish Music Startups (Visionist)
phone:  +358 40 837 8097
e-mail: jiri.koivuniemi@visionist.fi

Turo Pekari, Senior advisor, innovation and discovery, Teosto
phone:  +358 50 5750357
e-mail: turo.pekari@teosto.fi

Teosto is a non-profit organisation that works to secure the prerequisites for making music as a professional in Finland and the performing of Finnish music. We collect royalties from music users and distribute them to authors and publishers. In other words, we ensure that everyone has easy and legal access to music and the opportunity to use music to promote their business. Teosto represents 30,000 Finnish and around three million international composers, lyricists, arrangers and publishers of music. Royalties paid by Teosto to music authors and publishers amounted to EUR 53 million in 2015. 

Finnish Music Startups collective is a long-term project that was conceived in 2012 with a common goal of getting more attention to the music start-up companies in Finland and of supporting one another. Currently Finnish Music Startups represents 40 different companies. Finnish Music Startups collective is organized by PR agency Visionist (www.visionist.fi).

Share on social media
Change cookie settings

A cookie is a small text file that is stored on your computer or other device and records information about your visit to the Website. Teosto uses cookies to improve the usability of its services.

Information collected by cookies is not usually connected with the personal data of an identified person, but some information collected by cookies may be indirectly connected with the personal data of an identified person.

Learn more by reading our Privacy Policy and Cookie Policy

Cookie categories
Strictly necessary cookies

These cookies are strictly necessary to ensure the availability of our website. They do things such as load some of our website’s functions in advance to make the website load faster. Strictly necessary cookies are also used to determine and remember your settings. You can disable strictly necessary cookies in your browser settings, but please note that all of the website’s functions and parts may not work properly after that.
More information about cookies

Analytics cookies

We use analytics cookies to improve the functioning of our website. Analytics cookies collect information about things such as how visitors use our website and how they navigate from one page to another. The information is used in anonymous form.
More information: Privacy Policy and Cookie Policy

Functionality cookies

Functionality cookies allow us to offer various functions, such as playlists and a live chat service, on our website. If you disable functionality cookies, some or all of these functions may not work properly. More information about cookies

Marketing cookies

Marketing cookies help us tailor marketing and offer the users of our website more personalised services in the future. We use marketing cookies to collect information about the user’s behaviour and preferences on our website.
More information about cookies