New Market Research: Music Streaming Services Halve Illegal Downloads

from the giving-customers-what-they-want dept

For a long time, the copyright industries have taken the position that they won’t launch new digital music services until piracy is “solved” – or at least punished. The inevitable consequence of that position is obvious to everyone outside the copyright industries – people turn to other, unauthorized sources to satisfy their musical needs. Fortunately, a few startups have launched pioneering digital music offerings and some, like Spotify, look like they might succeed.

This means that we are beginning to get some real-life figures to flesh out the counter-argument that offering people new ways to listen to music online would greatly help to reduce piracy. For example, at the end of last year, Techdirt wrote about a Swedish study that supported this idea. Now we have some new market research on music streaming services in Scandinavia:

While we may think of Sweden as the home of music streaming, the proportion of Norwegians who have access to a music streaming service has increased from 37 to 56 percent in the last six months. For the first time, Norway has surpassed Sweden in this statistic – in Sweden during the same period the corresponding figure increased from 48 to 54 percent.

Those are impressive figures, and give an indication of the untapped potential in other markets that still don’t have serious music streaming services able to offer most tracks that people want to listen to – crucial if they are to displace illegal downloads.

Even more remarkable is the following statistic about the three countries where the research was conducted – Norway, Sweden and Denmark:

Across all three Scandinavian countries, the survey also shows that over half the people who previously downloaded music illegally no longer do so after they have been given access to a streaming service.

So forget SOPA, PIPA, ACTA, TPP, HADOPI, the Digital Economy Act, La Ley Sinde and all the other punitive frameworks for tackling unauthorized downloads: this latest research adds weight to the argument that by far the quickest way to reduce the scale of music piracy is to introduce decent streaming services.

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Comments on “New Market Research: Music Streaming Services Halve Illegal Downloads”

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Anonymous Coward says:

Re: Re:

Canada and UK have done several good non-industry supported studies. I have seen a few in the U.S. too but they don’t make the headlines. The non-industry studies are 100% in agreement that piracy is a non-issue as a factor in loosing jobs, taking money out of the economy or reducing income – sorta. They have found the super mega-stars did see a drop in sales, but 3/4th’s of musician experience an increase due to the “sampling effect”.

One of the problems with congress is that they have taken RIAA / MPAA funded studies as a matter of fact and haven’t looked or had access to other data. It’d be funnier if it wasn’t real – just like the hearings where some were asking if anyone had asked “the nerds” about SOPA.

Josh in CharlotteNC (profile) says:

Re: Re:

Why are there never any US studies on this?

Lack of quality streaming services available in the US make it difficult to get those kind of statistics here.

Look, I had a Pandora subscription for awhile. And while it found me some good music on occasion, getting a station set up to meet my varying tastes was time consuming (a lot of having to pay attention and thumbing up or down tracks). There were some artists and tracks that it never had, and others that even when specifically searched for and added as a seed to a station it still would never pay.

I’m using Grooveshark now. Again, its got some good features, but I still need to spend a lot of time to search for and select specific tracks to add them to playlists.

If Spotify ever drops the mandatory Facebook integration, I might try it to see if its any better, but until they stop requiring Facebook info to even set up a paid subscription, I’ll never know if its an improvement.

So give me and all the other potential customers out there better services and then after some time we’ll see if there’s a corresponding drop in piracy.

Ninja (profile) says:

I miss ootb…

As always it’s just obvious that the solution [for piracy] is a /better/ business model. Amusingly (and predictably) all the new and amazing business models that compete just fine with ‘piracy’ came all from outside the MAFIAA. And they tried to kill all of them, legit or not.

I won’t hold my breath waiting for the music industry to realize that.

Anonymous Coward says:

Personally I don’t think it displaces piracy, they both can live together since there is no problem with production of copies except for legal concepts.

People just use those services as their source for the copies now.

On another note the UK got a new service, it costs 1 penny a month and gives you access to all you can hear music and apparently all the music labels are in it, supposedly they want to target the 70% of people who don’t actually use digital at all but owns a cellphone, the service is called, now that is a problem for freedom because now someone is being smart about the price point and could if done right capture almost all of that market there and elsewhere becoming huge.

Anonymous Coward says:

i would have thought that the reasons why the entertainment industries dont start their own music services were quite obvious. whilst other legitimate sites are doing it, the industries get paid. as there is no outlay for them that is pure profit. they can also charge more or less what they like, holding these other sites over a barrel. if they started to offer the services themselves, they would actually then have to start to compete and we all know that is the last thing they are any good at. bribing, suing, threatening etc they can do very well, but go against another Internet company on an equal footing? that ain’t gonna happen!!

Anonymous Coward says:

Re: Re: Re:

I remember that. I think the service lasted only about 6 months and took years to set up – marketing blitz, headlines, press releases. I don’t recall why it failed exactly. I remember looking at it and thinking “junk”. The files were poor, propietary bloated software to play them (no mp3’s), “rented” meaning they disappeared after several plays (Yahoo did that too) for the same price as “owning” and didn’t offer much variety – just the latest top Billboard crap. I think that was when they thought they could out perform iTunes because Apple wouldn’t agree to increasing the price and held out on hard DRM (orignaly you could get rid of their DRM).

EJ says:

Re: Re:

You are absolutely correct. To add to your great point, they also then have the ability to increase licensing rates when the service takes off and becomes dependent on that content. Its a brilliant strategy for them. They let others do the work while collecting tons of money, all the while bitching and moaning how they are suffering….

Anonymous Coward says:

Re: Re:

First off – the Scandinavian countries have faster and cheaper internet which more people have access to. That may be a big factor. I download because my “hi speed” $60 / month (internet only) can’t stream. There is only one provider as well (5th largest city in the U.S.). My service is also capped at a rate which might allow 1 or 2 HD movies/week.

I think the internet might be different elsewhere.

Anonymous Coward says:

Re: Re: Re:

Youre full of BS, if you can download, you can stream, infact music streaming probably uses less bandwidth, then if you downloaded each track you listened to. Also, that sounds like all BS about where you live also.

As far as steaming music, if there are good channels to listen to…yeah I dont bother downloading music.

Anonymous Coward says:

Re: Re: Re: Re:

Streaming requires a constant connection of a certain speed to maintain a certain quality. You can download something at 1kb an hour and eventually get it, you could not stream music at that speed. Streaming certainly does require a better connection than downloading, as someone said you could download back on dial-up.

I am curious as to who is providing service to this guy. If he is really from the 5th largest city, which the internet says is Philly, then he has at least 5 options, again according to the internet. I am guessing he is actually from Poedunk, Nowhere. In which case I believe his internet is shit, because when I lived in rural Wisco my 1 internet option was shit, but it still wasn’t 60$.

Anonymous Coward says:

Re: Re: Re: Re:

‘Youre full of BS, if you can download, you can stream, infact music streaming probably uses less bandwidth, then if you downloaded each track you listened to. Also, that sounds like all BS about where you live also.

As far as steaming music, if there are good channels to listen to…yeah I dont bother downloading music.”

Phoenix Az. Cox cable – an older suburb, no DSL. I may not have mentioned but I was refferring more to video. It’s easier to download a podcast from MSNBC (even though it might take hours to do) than to watch it sputter and stop every 2 seconds to stream.

This goes for You Tube as well. I can watch You Tube better on a 3g network, with a “non-smart” phone than I can on 2010 macbook pro. I’ve had many conversations and visits from Cox over this, with no improvement. But it’s all I got.

PaulT (profile) says:

Re: Re: Re: Re:

“Youre full of BS, if you can download, you can stream, infact music streaming probably uses less bandwidth, then if you downloaded each track you listened to.”

Less total bandwidth perhaps, but maybe what he’s referring to is buffering, etc. He could have a fairly good overall speed, but have a quality of service that’s not reliable enough to stop the stream from getting interrupted for a second or two every so often (which is extremely annoying).

Greevar (profile) says:


I personally have issue with the use of that word. It’s used by people on all sides of the debate and it was created by the publishing industry to create a morally negative semantic effect on the discussion. It’s used to slant the debate in one direction over the other and its use should be curtailed.

When people who are opposed to the copyright monopolies and how they are abused use this word, it gives strength and authority to the word. Piracy, by definition, is the assault on merchant ships in order to steal cargo by force so that it can be carried away and sold on the black market for profit. Its use implies meaning where it doesn’t actually apply, creating ignorance and moral outrage in those that don’t fully understand the nuances of technology and communication.

There are better and more apt words that can be used for this: infringement, unauthorized copying, illegal downloading, and copyright violation. Using the term “piracy” just gives their application of the word more power, don’t give them any more power.

Sorry to derail the discussion like this, I just felt it needed to be said.

John Fenderson (profile) says:

Re: "Piracy".

I used to feel like you, but that ship sailed a long time ago. However, with everyone using the term it has lost its emotional power almost entirely, so I don’t mind it and use it myself. It isn’t technically accurate, but everyone knows what you mean when you say it, so there it is.

Interestingly, historical pirates were actually corporate tools, funded and given authority by governments and business. It throws another interestingly layer of inaccuracy to the term as we use it now.

Anonymous Coward says:

Re: "Piracy".

People become immune to terms when repeated enough (socialism, communism). In fact it has a tendy to become vogue as part of a backlash when over-used.

I’m much more concerned about the indictment against Mega being termed “the conspiracy”. I’m sure that was intentional and not just for weighing in on emotions associated with the term, but for legal reasons that may not have been outlined yet.

Justin Olbrantz (Quantam) (profile) says:

Re: Re: "Piracy".

Well, remember that language and logic are independent. While you can argue that copyright infringement isn’t stealing in the logical sense of depriving someone of something, it’s a fact that in English “steal” can be applied to intangible things. Imagine a little kid who has never heard of the term “copyright infringement”, in the middle of a temper tantrum, in a high-pitched nasalized voice: “He stole my idea!!” You can totally picture that, right?

Of course that isn’t universal. I did a brief survey of major world language families a bit ago, and found that only 2 out of 5 families have a concept of stealing the intangible (though one did have a recently coined slang term to that effect). E.g. in one language you “misuse” someone else’s password.

Anonymous Coward says:

Re: Re: Re:

They are loosing a second generation of customers to video games.

Nowhere have I seen the issue that people have been boycotting some labels for about a decade now, or the rise of independent music (RIAA still claims they represent 90% of legit music sold – i.e. independent is not “legit”) and the public has moved on.

This is part of the public’s apathy towards copyright bills. They moved on. This is old news to them.

The reality is that Congress and industry and the public have never agreed on a single moral issue, but they can debate it forever and ever and ever … It’s time to get real and design something that doesn’t make 50% of people criminals and allows compensation and freedom for creators too (meaning they can skip signing with copyright holders if they choose without undue economic harm – allowing new distribution models without calling it piracy).

Anonymous Coward says:

Re: Re:

Yep. Marketing is the art of getting people to want to give you money in exchange for goods and services.

Supreme excellence in the art of marketing is making them GLAD to give you the money.

The RIAA seems to think that marketing involves pointing law enforcement’s guns at people (The root word for “enforcement” is?) and MAKING them give money.

John Doe says:

One problem with this information

The problem, as RIAA and the MPAA see it, isn’t that giving people legal places to get content for a reasonable fee reduces piracy. Its that the fee is reasonable. Streaming services like Netflix and Pandora are going to lower the cost of music to the consumer thus lowering the price they will pay to the producers. It is the natural evolution of technology lowering costs for everyone but RIAA and the MPAA are fighting that evolution. They are the gatekeepers and provide no value beyond licensing. With licensing fees dwindling, so is the need for their very existences. The really sad part is the actual content producers are letting the gatekeepers ruin it for everyone.

John Fenderson (profile) says:

Re: One problem with this information

Actually, the really sad part is that the labels do provide a service that remains relevant and necessary today — promotion.

The labels are seeing their domain shrink, which is what has them all in a tizzy. They’re losing their exclusive control over the means of distribution & production, not to mention their role as king-makers, of selecting who will be the “important” artists. This loss in inevitable, and the labels understand that this means their influence & empire will be shrinking.

They’re delaying that as much as they can. There is still a profitable business they can perform, but it won’t be the obscene profits they’re used to.

I can totally understand their problem. I’m also glad to see the changes that are causing it. The labels have been a caustic & detrimental influence on arts & culture for a very long time, and reducing it is only good for everybody (except them).

John D (user link) says:

I quit downloading music when I got Zune Pass. Unlimited streaming for a good price – and much more encouragement to buy an album if it meant supporting the artist. Convenience is a factor too – why go to the mall and spend $14 on a CD when you can get the album online for pennies?

Netflix has shown what will happen when music streaming services take off – the content providers will freak & jack up streaming rates exponentially. We’ve already seen that happen with Pandora and other internet radio.

Anonymous Coward says:

Streaming services are solving the problem because of smart, connected platforms. Netflix, for example, is still DRM’ed but you can access it on just about any platform except linux (which is real dumb). Its the ubiquity of devices and data and the Internet as to why streaming is growing. People start to see value in paying a subscription instead of maintaining vast quantities of media be it CDs, DVDs, mp3s, etc.

hothmonster says:

Re: Re: Re:

Not to mention GFWL encrypts your saved games with a code generated at log-in and quite often fails to validate and corrupts your save files. Look up “lost saved game” on the official Arkham City forumns. So legit customers lose their progress to protect against…..? IDFK to protect against people getting achievements unethically (gasp) i guess. So I lost 28 hours of my “work” and don’t get to play the next rocksteady game if its packaged with this shit again.

Acslawarecrooks says:

Netflix in UK

As you may know Netflix has launched a streaming service in UK. I have subscribed as, as I have always said, GIVE ME THE MEDIA I LIKE AT A PRICE I AM WILLING TO PAY AND I WILL USE IT. I would much rather use a legal service which has all the content on it, than an illegal service.
HOWEVER Netflix in UK is so crippled by the studios not authorising newer films and TV shows that all it has is old rubbish. Even the UK tv channels don’t put content on. This is the level of service the BIG MEDIA allows us to have, and it is not good enough.

If Netflix is to be a success, the media companies need to allow them to show recent films and tv shows.

Anooon says:


I’ve been using Grooveshark for a quite a few months – and the best of all – it’s FREE! And I could use YouTube, and make playlists. Umm.. but then again.. what’s the difference?

I download from TPB-like site – FREE of charge.
I listen from Grooveshark-like service, YouTube – FREE of charge.

So.. if people couldn’t download music, they would switch to Grooveshark or similar free service or YouTube.
And then again – there’s tons of Creative Commons licenced music out there – that would also be an option.
So this fight against music file-sharing is pointless – people will find another alternatives, as I’ve stated.

Casey says:

While it cannot be argued that streaming services reduce piracy, these statistics leave out a lot of information.

For one, what is a streaming service? Only fully legal services like Spotify, Rdio, or Rhapsody? Or are services with questionable legality included, such as Grooveshark? Or maybe it can be taken even further, such as youtube or even a radio service.

Similarly, the data only talks about those listening to a music service and those willing to pay. It never combines the two to tell us how many people are paying for subscription services. The actual amount of paying subscribers is probably well below 20%.

Violated (profile) says:


Music piracy has now much declined simply because there are now a good range of official supply to choose from. It is hardly hard for people to spend $0.99 on that song they heard.

We are also happy to say that the monopoly of the RIAA has been killed when they barely make up half the market sales with the Indie artists making up the rest.

All would be happy in the World if not for the RIAA with their SOPA law and their many attacks on Indie music supply like DaJaz1, OnSmash, MegaBox and MegaClick?. All done to try and keep Indie artists under the RIAA cartel umbrella so they can take their 80% cut.

Obviously we should not allow a monopoly to crush a free and vibrant market.

THEMIS KOUTRAS (profile) says:

about pirecy

pirecy in normal music is as it is and all artist should be respected for there effords as long as the music/songs are not curupt. now music song started way back its perpose was for GOD to be worshiped praised that is GOD ALMIGHTY EMANUEL HOLY it is not for the perpose of other types of worship praise or entertainment other them getting permission from GOD JESUS HOLY for entertament reasons parties so on when the gospel bible and christian music songs began in music JESUS said freely you been given fleely give he gives us songs bible so on for help in servival and salvation yet after GREECE received the word nations like AMERICA took it the word music so on world wide making money making corrupt buisinesses when JESUS said it is for free therefore it is not a person receiving the word that is pireting it but those selling it the word is given to the artist by GOD it belongs to all not just the artist a fact but all nations like america like to twist things around for money they are the crooks it appeares that everything has become a buisiness rather then love not helping those in need they put it live on news help them they say yet who the common person who has little to servive no the rich and governments and mobsters working togeter yet telling the world there are enemies for money they are the crooks they have it all why dont they solve it because they are greedy why dont they just wash more money for charity and christian church services and solve it ones and for all even better why dont they drop the money to hell and have everthing free and everyone works free but under GOD EMANUEL HOLY in return for what they need for servival so on the answer is as easy as that why dont they do it then?

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