Stockholm a global leader in music tech

Published June 2016 in collaboration between Invest Stockholm and The Swedish Wire.

When listening to music on a laptop or smartphone, there’s a good chance a Swedish firm has been behind the technology. A new report highlights the influence Stockholm has when it comes to combining music and technology.  

For anyone who listens to music on a laptop or smartphone, there’s a good chance a Swedish firm has been behind the technology. It’s well known that Spotify and Soundcloud are firms that started life in Stockholm. Less well known is that other services, such as Apple Music, also have their roots in the capital.

Aside from the companies who allow people to stream music, Stockholm is also home to companies providing music electronics, digital music production and new firms developing smart new ways of managing music rights.

These companies are now starting to attract international attention. Indeed, Stockholm’s music tech companies attracted investments of $555 million last year. That’s more than half of all investments in the entire tech sector.

EU’s Cluster Observatory, which analyzes clusters across the region, ranks Stockholm’s music tech as one of the most competitive grouping of firms in the world.

A new report, called “Stockholm – the Powerhouse of Sound” highlights the influence Stockholm has when it comes to combining music and technology.

The report presents 25 startups in five different sectors (Digital music production; Music instruments, aids and equipment; Music publishers and rights management; Streaming and other forms of music and audio entertainment; and Music accessories).

One example is Auxy, an iPhone/iPad app for creating music. Within one month of its launch two years ago, it was downloaded 500,000 times and was awarded Apple’s “Best of 2014”.

“We’re set on the goal to build the best music studio for the mobile generation. It gets really exciting when you start thinking about what enabling millions of new creators will mean for the development of music as an art form,” said Henrik Lenberg, one of Auxy’s founders. 

“The Avicii’s of tomorrow will make tracks that change music using only their phones. And they will bring radically different ideas to music, I think.”

Asked what made Stockholm a good place to run a music tech startup, he offered an answer that Swedes from all walks of life often give: He wanted to have the freedom to combine building a company and having a family.

“Now I have a son who’s five months and I’m working half time while staying home with him the rest of the time. I think Stockholm and Sweden is the only place where it’s both financially feasible and culturally accepted to do that,” he said.

One of the other music tech startups identified in the report was Auddly, a music management tool. The system basically gathers all information about a musical piece in one place, as an independent bridge between the music industry’s copyright owners and master owners.

Niclas Molinder, founder and CEO of Auddly, said that one of the biggest strengths of being based in Stockholm is the innovative climate, with lots of interesting start-ups, and the willingness to collaborate.

“All the inspiring and successful music-tech firms in Stockholm builds a creative wave that inspires start-ups to believe in themselves and their dreams,” he said

“Another central point is that Stockholm is outstanding when it comes to music production, which creates great opportunities for tech companies to get involved in the music industry.”

The undisputed king of Stockholm’s music tech startups is, of course, Spotify. Founded in 2006, it’s now the world’s leading music streaming service with some 30 million active users, almost three times more than its closest rival, Apple Music. In fact, Spotify has more users than the five largest competitors combined.

Apple Music, as we know it now, also began life in Stockholm. In 2010 serial entrepreneur Ola Sars launched the streaming service Let’s Mix, which two years later was acquired by headphone producer Beats. Beats Music was bought by Apple, and is known today as Apple Music.

Pandora Music also has Swedish connections. Last year, it bought music subscription service Rdio which was co-created by Skype founder and Stockholmer Niklas Zennström. Before the acquisition, Rdio was operating in more than 85 countries.

Stockholm has, after Silicon Valley, produced the most startups valued at over one billion dollars - also known as unicorns - per capita. They include firms such as Skype, Mojang (Minecraft), Klarna, King (Candy Crush Saga) and Spotify. Today, every fifth Stockholmer works in the tech sector and “programmer” is the most common job title.

Sweden is also the third largest music exporter in the world behind the U.S. and the UK – and the capital is at the heart of it. Stockholm is a well established hub for songwriters, as well as one of the world's most successful cites in global, chart-topping music relative to size, which in large part is thanks to its exceptional songwriting talent. Producer and songwriter Max Martin, with more than 20 Billboard number ones to his name, is the world’s third most successful hit maker after John Lennon and Paul McCartney.

Stockholm’s success in music and technology has not gone unnoticed by the international media.

”A weirdly large number of the music and audio related companies that you have heard of came from Stockholm. The capital of Sweden not only has a curiously large number such companies operating there, but it also gave rise to some of the most important,” British Sunday newspaper the Observer said.

ECS Today went as far as to say that Stockholm is “a hub for contemporary music acts and birthplace to a new type of music scene – Music technology.”

Read the music tech report: Stockholm - the Powerhouse of Sound