Streaming and Piracy: The Extended Debate

“Music is available to everyone at the touch of a button. Please try and use only those services that actually pay the artists, songwriters and producers, rather than those that don’t.” Queen, speaking to the IFPI for their Digital Music Report 2012.

THE DIGITAL MUSIC LANDSCAPE

Let us pose a question: have you ever downloaded music off the internet? We can practically hear the resounding “yes”, echoing through cyberspace and emerging from earphones worldwide.

Statistically speaking, there is a very strong chance that you have. Already there have been one billion songs downloaded in the US alone this year, according to research company Nielsen. But don’t jump to any hasty conclusions about music piracy - even more interesting than the size of that figure is the fact that was the number of songs legitimately paid for.

Many discussions about the relationship between music consumption and the digital sphere centre upon music piracy, illegal downloads, and the crippling effects that these behaviours have on the music industry.

But is this the reality of the online music environment? Is it true that the combination of music and the internet results in weeping musicians, clinging to their keyboards and staring forlornly into the distance?

No. Of course not. The digital sphere can have, and indeed has produced, many positive consequences for the music industry. Here is what a few of the world’s most successful musicians have had to say on this matter, as reported to the International Federation of the Phonographic Industry this year:

Shakira at Rock in Rio, July 2008.
From Arte & Fotografia.
By Andres Arranz.

• Shakira:
  
  “Each day there are more and better digital services to help us enjoy the wonderful music created throughout the world.” 
•  Natasha Bedingfield:
  
  “I love the way music turns all these techie devices like PCs, mobile phones and iPads into personalized juke boxes, and I love how the internet lets me connect.”
• Lee Ritenour:
  
  “There has been tremendous growth with new digital channels and streaming services. These new business partnerships have the potential to help and turn around our
  business.”

Our music consumption habits have changed markedly in the past decade. And what is the dominant trend that appears to be emerging? Music streaming. Not piracy. Not illegal behaviour. But the growth of legitimate and affordable online services in which music can be distributed and consumed, theoretically offering benefit to artists, producers, record labels and consumers alike.

So just what is music streaming? How does it affect artists? And perhaps the most important question of all is, does it represent the future?

MUSIC STREAMING

“Music subscription is transforming the way people experience and pay for tracks and albums.” IFPI Digital Music Report 2012.

Music streaming services are often referred to as ‘music subscription’ services. Although this is a relatively new industry, it is already commercially (and sonically) booming. The number of consumers subscribing to online music services globally is estimated to have increased by nearly 65% in 2011.

At the forefront of this music revolution is Swedish service Spotify. Sound familiar? With over 20 million users, chances are that many of you reading this are already using it. 

From musicindustryblog.wordpress.com.
Mark Mulligan, May 2012.

Created in 2008, Spotify offers users access to over 18 million songs for a small subscription fee, just like many of its competitors. So although it isn’t without cost, unlike music piracy, it is only a small price to pay for ensuring the future of the music industry, and having its present just a click away.

This all sounds very positive so far, and in many respects it is. But let’s take a deeper look at music subscription services. 

DOES MUSIC STREAMING BENEFIT ARTISTS

The most significant issue related to music streaming services is just how much of the revenue actually makes its way back to the artist. And immediately things start looking suspect.

Spotify pays artists $0.0096 per stream, which seems harsh, but is practically generous compared to cloud based competitors such as iTunes Match, who pay just $0.0033 per song streamed.

On top of this small payment, many streaming services require a $50 distribution fee (or thereabouts) to be paid by artists in order to place their music content with the provider.

In the case of Spotify, this means that an artist needs to have their music streamed 5, 171 times in order to break even. For iTunes Match, an artist needs 15, 127 streams!

Streaming services don’t actually seem to represent very good value for the artist, because the number of plays required is simply unrealistic. Surely the only artists who will ever see any kind of significant return are those who are already commercially popular and therefore successful, such that streaming services only contribute towards an established fortune?

So where does this leave the little guy? Broke? We sure hope not.

There is, fortunately, a flip side to this grim outlook. Not only is a third of a cent better than the zero cents music piracy offers, but also the number of users for subscription services is growing at such a rate that the chances of feasibly making a living through music streaming services no longer seem impossible. So although streaming is not ideal, especially compared to the good old days when people forked out $15 for an album, nor is it quite as diabolical as the scratchy audio quality that is a hallmark of so many pirated songs.

DOES MUSIC STREAMING COMBAT MUSIC PIRACY

According to a report released by Columbia University, entitled ‘The Copy Culture Survey: Infringement and Enforcement inthe US’, 46% of American adults have pirated music, TV or film products.

Of that, 70% of respondents in the 18 to 29 year old age bracket have pirated digital content.

Yet in this survey, many also indicated that they now pirate digital music files less because of legally available subscription streaming services.

Isn’t that just a neat little answer to this issue? Yes! Music streaming does combat illegal music piracy! Well it’s about time those Swedes did something good for the music industry - maybe we'll forgive them for ABBA.

MUSIC CONSUMPTION TRENDS

Although services such as iTunes continue to see their sales grow, and streaming sites are becoming a more prominent feature of the online music industry, traditional CD sales are plunging.

Yet hope is not lost. Funnily enough, it is one of music’s oldest friends, the vinyl record, who has seen physical copies of songs come back into hot demand.

The period from 2010 to 2011 saw a 16.3% increase in vinyl sales. What more, between 1993 (but let’s face it, who remembers the nineties anymore?) and this point in 2012, the actual number of vinyl records sold has increased by 4.4 million, from 300,000 to 4.7million!

VINYL RECORD SALES 1993 to 2012.
From Digital Music News.
By Paul Resnikoff, October 2012.

So there you have it. All this talk about the rise of digital music, and then it is vinyl of all things that provides an alternative future. Talk about new age fun with a vintage feel.

CONCLUSION

Let’s get one thing straight: music piracy is bad. Very, very bad. Don’t do it. But music streaming, sourced from legitimate services that provide financial return to artists and record labels, is not bad.

Can we categorically announce to the cyber-world that music streaming is good? No. Only time will tell as to whether that is true.

But what we can tell you is that music-streaming services have helped bridge the gap between the music industry of old and changing consumer behaviors that preference digital music files above the physical product.

So there you go. Run forth, music lovers, and search the Internet far and wide for your favorite music. But just be sure to pay for it. It’s only fair, after all.