Spotify does actually reduce piracy, claims the European Commission

By Lulu Chang October 28, 2015

Spotify

Though they’re nowhere near as dangerous as the Somali crew, nor as glamorous as Captain Jack Sparrow, the music pirates of today are certainly a problematic bunch. But according to a new study conducted by the European Commission, the availability of free music made possible by services like Spotify has indeed curtailed piracy in recent years. In fact, the Commission claims that there is “clear evidence” that Spotify “displaces music piracy.” That said, however, when it comes to helping the music industry make money, Spotify isn’t exactly helping — unfortunately, the money the service saves artists by protecting them from piracy is subsequently lost by the provision of, you know, free music.

As per the Commission’s study results, “our analysis shows that interactive streaming appears to be revenue-neutral for the recorded music industry.” Researchers Luis Aguiar and Joel Waldfogel examined weekly data for both the digital sales and torrents for 8,000 musicians between 2012 and 2013. When taken in conjunction with Spotify’s data, the two found, “For every 47 streams the number of illegal downloads decreases by one.” And considering Spotify’s impressive user numbers, these minute decreases actually add up to be quite significant.

Spotify, which has long insisted that its presence is a huge boon to the music industry at large, is no doubt thrilled with this latest piracy displacement theory. But of course, every conclusion should be taken with a grain of salt — as TorrentFreak points out, “streaming services also impact legal track sales on iTunes and other platforms,” which means that people who might otherwise feel compelled to buy Adele’s “Hello” are instead choosing to simply listen to it on repeat on Spotify.

Researchers note, “… our sales displacement estimates show that the losses from displaced sales are roughly outweighed by the gains in streaming revenue.”

So tough call, music biz — you’re caught between a rock and a hard place, and one’s name is Spotify, and the other’s is piracy.

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