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Starve the Ego, Feed the Soul

Jul 30, 2014

Music Streaming vs. Music Piracy

Computers have been around for decades now, assisting us in our daily activities including school, work,
hobbies and even just killing time. They’re constantly evolving, in fact, they haven’t always had the
ability to connect with each other and exchange data until advancements were made forming what we
know today as the Internet. The Internet as we know it today is far from what we could have imagined it
becoming during the 1990’s. It’s revolutionized the way we exchange information and communicate with
each other. The evolution of web design and development has also provided new ways of following the
news, socializing with friends, witnessing amazing photos and videos, and even listening to music. The
Internet has paved the way for digital music to be purchased online and downloaded directly to your
computer, without having to go to the store and buy a physical CD. Unfortunately, this convenience has
come at a high price as well. This ease of access to our favorite music has also given birth to a new
criminal activity known as digital piracy. According to Cambridge Dictionaries Online, digital piracy is,
“the practice of illegally copying and selling digital music, video, [and] computer software.”

Discovery News clip on how piracy will always exist. What they don’t mention is it can be reduced.

Digital Piracy comes in many forms which include the illegal downloading of books, movies, TV shows,
software and music. Music piracy has had an immense negative impact on the music industry causing a
decline in album sales. In an article written in the business column of TIME.com, Victor Luckerson points
out that CD sales continued to decline, dropping to 165 million copies sold, 14 percent less than last year.
While many view piracy as an unstoppable trend not even worth dealing with, others have been active in
finding ways to reduce the problem that has continued to grow for years. National governments and
other governing bodies have taken drastic measures by imposing strict anti-piracy laws worthy of jail
time or hefty fines. Rather than increase restrictions and punishments on music pirates, some believe it’s
best to give the consumers what they want and provide viable alternatives to downloading music
illegally. Before taking steps towards reducing music piracy, we must understand the factors behind the
decision to pirate music and this article will cover some of those reasons. Of course, the reasons are
numerous and unique to the individual. However, there’s a common ground among all music pirates,
they just want to enjoy their favorite music, preferably for free. That’s where companies like Spotify and
Deezer step in, and I believe the free and premium services provided by these companies help in
reducing music piracy by meeting the needs of the typical pirate.

Spotify co-founder and CEO Daniel Ek.

“Founded in Sweden, the home of The Pirate Bay, we believed that if we could build a service which was
better than piracy, then we could convince people to stop illegal file-sharing, and start consuming music
legally again”

— Daniel Ek, CEO of Spotify

Spotify and Deezer are just a couple of many music streaming services that offer you access to their
database of millions of songs from your computer, tablet, or mobile phone. All you've got to do is sign up
for a “freemium” ad-based account or a paid premium account that removes the ads and improves
sound quality. The creators of Spotify even claim that they were designed from the ground up to combat
music piracy. In an interview with TorrentFreak.com, Spotify CEO Daniel Ek stated: “Founded in Sweden,
the home of The Pirate Bay, we believed that if we could build a service which was better than piracy,
then we could convince people to stop illegal file-sharing, and start consuming music legally again.” Since
The Pirate Bay is one of the most popular sites for downloading torrents to pirated media, and the
creators of Spotify themselves are from Sweden, it really shows the significance of what Ek and the
developers of Spotify are trying to accomplish.

So, how do music streaming services effectively reduce music piracy? Indeed, music piracy is impossible
to completely abolish because that’s the way the Internet works. Just like the illegal drug market, digital
pirates will always find a way. That doesn’t mean it can’t be reduced effectively, and music streaming
services are proving just that. Due to lax laws on the sharing of copyrighted material in Sweden, it has
become one of the world leaders in digital piracy; although, things have turned around in recent years.
Since the launch of their service, Spotify claims that the number of people who pirated music dropped
25 percent between 2009 and 2011 (TorrentFreak.com, “Spotify Was Designed From the Ground Up to
Combat Piracy”). While the studies specifically on music streaming services and their effectiveness in
reducing piracy aren't abundant, there has been studies that point towards their role in piracy’s decline.

One of the main reasons for digital piracy, including music piracy, is the fact that people just don’t want
to pay for something if they know they can get it for free. It’s within our human nature, if we’re able to
receive something for free we’re going to take advantage of that opportunity, even if we might not
necessarily need whatever is available. So, the idea of us being able to download music for free becomes
very appealing and just as drug dealers find a way to traffic illegal drugs, music pirates will continue to
find ways to get music for free. As stated in a report on piracy in Norway published by Ipsos, when music
piracy was at its height in 2008, 1.2 billion songs were copied illegally. However, that number dropped
over 80 percent to 210 million by 2012 (TorrentFreak.com, “Piracy Collapses As Legal Alternatives Do
Their Job”). In his publication, P2P Leisure Exchange: Net Banditry and the Policing of Intellectual
Property, Dr. Chris Rojek studied the culture behind digital piracy, also known as peer-to-peer sharing,
and found that some argue that those who download music illegally don’t view what they’re doing as
illegal. While some simply view their piracy habits as a harmless activity not worth restricting by law,
others just don’t agree with the idea of parting with their money for music. In a study conducted by Dr.
Bart Cammaerts and Dr. Nick Anstead on “digital music consumption in the iTunes era”, they found that
25.3 percent of their study group reported that they viewed the pricing of MP3s as unfair, with 18.2
percent of them having never purchased digital music (22). If they’re not willing to pay for their favorite
music due to pricing, whatever alternative source of music they choose would likely be free.

Olav Torvund.

“There is no excuse for illegal copying, but when you get an offer that does not cost too much and is easy
to use, it is less interesting to download illegally”

— Olav Torvund

As mentioned before, the majority of music streaming services including Spotify and Deezer have ad-
based “freemium” accounts which are free to register in order enjoy all your favorite music they have
available, including full albums. All that’s required is to listen to a quick advertisement between every
few songs. In an interview with TorrentFreak.com, Olav Torvund a former law professor at the University
of Oslo added, “When you have a good legitimate offer, the people will use it.” He continues, “There is
no excuse for illegal copying, but when you get an offer that does not cost too much and is easy to use, it
is less interesting to download illegally” (TorrentFreak.com, “Piracy Collapses As Legal Alternatives Do
Their Job”). Which is a very good point, if a quality service is available for free, why not use it? Especially
if the other free options at your disposal could land you in prison or paying ungodly amounts of money
in fines. According to the RIAA’s website, first time offenders face up to five years in prison and $250,000
in fines in the United States. In 2013, a Minnesota woman named Jammie Thomas-Rasset had her
impressive fine of $220,000 upheld by the U.S. Supreme Court (France-Presse). So, before you start
thinking that can’t happen to you, let Mrs. Thomas-Rasset be a reminder that it can.

Since freeloaders aren't quick to pony up for the music they want, they are finding the free service to be
an alternative to their devious ways of downloading music illegally. Mehmet Delikan conducted a survey
to determine the factors and behaviors behind the adoption of music streaming services. One of the
results from his study showed that after using a music streaming service, almost 75 percent of the
subjects reported that they use or download illegal music less, 65 percent of his study group reported
using the “freemium” ad-based accounts (29). While his study group wasn't millions of people, or even
thousands for that matter, the signs are promising that free accounts offered by music streaming services
are proving worthy of being a viable alternative to downloading music illegally. So much so that in 2013
Spotify boasted 18 million “freemium” subscribers alone ( TorrentFreak.com, “Spotify Was Designed
From the Ground Up to Combat Piracy”). While the numbers from Delikan’s study aren't directly linked
to the 18 million subscribers, the high number of free subscribers definitely supports his findings.

The majority of music streaming users stick to the free version, however, 35 percent decided to chip in
for the small monthly fee ($9.99 a month on Spotify) and experience some added benefits (Delikan 29).
Premium subscribers get all the same benefits and features offered to “freemium” accounts, with the
addition of improved sound quality and the absence of advertisements. How awesome is that? Which
brings me to my next point; music streaming services offer music with higher sound quality compared to
your average digital download whether purchased or downloaded illegally. In an article written on
TechRadar.com, Gary Marshall noted that Spotify boasts a streaming rate of 160Kbps for free ad-based
accounts and up to 320Kbps for premium users; with the exception being that streaming music on your
mobile device through a mobile data connection typically streams at about 96Kbps. That’s a notable
selling point for both free and premium accounts considering the majority of digital music available to
download is a 128Kbps file (Halmenschlager, Waelbroeck 3). This would explain why 76 percent of the
participants in Cammaerts and Anstead’s study reported they were satisfied with their streaming service,
while noting the sound quality as a factor in their choice (23). We can all agree on the importance of
sound quality when listening to music. When the music cuts in and out while listening to the radio in the
car, we tend to change the station to avoid the deminished quality of sound. That same tendency is the
reason why the high sound quality offered by streaming services helps convince users to stick with that
service.

Anyone who has pirated music or anything digital before, understands that it’s not as cut and dry as it
seems. Sure, anyone can download a program like uTorrent and head over to The Pirate Bay and get
started on their first download relatively quickly. However, those new to downloading music with torrent
files learn the hard way rather quickly that without due diligence you’ll infect your computer with
malware including viruses, trojans, and spyware. In an interview with PCMag, Beth Jones, a senior threat
researcher for Sophos stated that over 60 percent of torrents are infected with malware of some sort
(Eddy). This added danger makes finding safe quality files worth downloading almost like a game of
roulette with your computer. Even the best anti-malware programs can miss infected files. Music
streaming services offer peace of mind in knowing that the music you’re listening to is safe and you don’t
even have to download the files to your computer or device. Safety aside, these services are incredibly
easy to use, especially compared to searching for safe files to download. In fact, 70 percent of those who
participated in Delikan’s survey reported that they spent less time searching for music and more than 72
percent started to discover more new music faster than they were previously able to (29). Safety and
simplicity add strength to the argument that music streaming is an acceptable alternative to music
piracy.
The new Spotify PC and Mac user interface.

Of course people enjoy something when it’s easy to use, but its simplicity paired with personal music
recommendations based on not only your listening history, but the history of your friends as well is very
intriguing. Jonathan Dörr and Thomas Wagner of Ludwig Maximilians University in Munich, researched
Music as a Service (MaaS) as an alternative to music piracy and his study noted that users responded
positively to social features such as recommendations from friends and previously tagged music. On
Spotify, users have the ability to follow their favorite artists and receive notifications when they add
music, the music they’re listening to, and music they’ve recommended others listen to. The extra
features don’t stop there, Spotify offers the internet radio service, similar to what Pandora offers, as
well. If you’re looking to discover new music or artists similar to an artist or a song, you can use the
internet radio feature which plays similar songs. Artists also have the ability to post merchandise and
their upcoming shows on their page. If you’re interested in learning more about your favorite artists,
their page also has their biography on it as well. For those who are picky about their music having the
correct album art; music streaming services get their music directly from the record labels so you don’t
have to have to deal with missing or incorrect album art. The added features alone give the edge to
music streaming services over digital piracy, not to mention the fact that all the features are available
even with the free version. Originally, Spotify only offered access to their music on mobile devices for
premium accounts, but that’s since changed and now it’s available to all account types.

Spotify is available on PC or Mac, mobile phones, and tablets.

In Sweden, digital piracy has seen the number of pirates drop by 25 percent in recent years. Denmark
has seen a dramatic decrease in piracy as well. Reports from the International Federation of the
Phonographic Industry detail that 48 percent of music streaming service users are ex-music pirates; with
eight of ten having stopped downloading illegal music completely (TorrentFreak.com, “Spotify Was
Designed From the Ground Up to Combat Piracy”). A survey was conducted in Norway of roughly 1.7
million people and their findings are intriguing. Of those surveyed, 47 percent stated that they used
streaming services like Spotify with over half of them paying for the premium service (TorrentFreak.com,
“Piracy Collapses As Legal Alternatives Do Their Job”). These numbers raise questions on the whether
they’re truly related to music streaming services. Going back to Delkian’s study, participants were asked
if they pirated before using Spotify and over 87 percent of them admitted to having downloaded music
illegally before to some extent. After using Spotify, almost 40 percent have stopped their piracy habits
completely, with another 38 percent reporting that they rarely downloaded illegal music afterwards (29).

While the information to prove the exact effect streaming services have on reducing piracy isn't as
abundant as one would like, there’s definitely plenty to make a strong argument. Having grown up in the
digital age, I used to be one of those kids that had no fear of repercussions of digital piracy, as do most
digital pirates. In fact, Cammaerts and Anstead’s study reported only 2.1 percent of participants finding
the legality of how they obtain their music to be on any importance (19). However, times are changing
and some might argue that the reduction is due to increased anti-piracy laws, but the reality is that the
only people who get put on trial for digital piracy are those directly linked to mass seeding of files or
those who run file dump websites like Megaupload. Megaupload is a website which anyone can create
an account and host files for others to download. All they require of you sign is to accept their user
agreement during the sign-up process which basically says the uploader is solely responsible for the
content which is being uploaded, not the website itself. However, Megaupload’s founder Kim Dotcom,
was arrested in 2012 for copyright infringement charges filed by RIAA. Even though charges were filed,
it’s been two years and he has not been convicted (Dredge). While jail time is proving to be a rarity, huge
fines are sticking a lot easier, as Mrs. Thomas-Rasset, the Minnesotan mother of four I mentioned earlier
can attest. With the group of those legitimately trying to oblige copyright laws being so minute, it’s fair
to say that music streaming services are on the front line in the battle against music piracy. Streaming
services aren’t limited to the music industry either; as mentioned very early on, digital piracy has
affected more than the music industry. Pirates download TV shows and movies illegally as well and
streaming services such as Netflix have been doing their part to reduce piracy in those areas too. In
2011, 200 million shows were downloaded illegally although that number has dropped by 72 percent
since (TorrentFreak.com, “Piracy Collapses As Legal Alternatives Do Their Job”). Numbers like these
support the idea that streaming services in general are becoming a viable alternative to digital piracy,
including music piracy.

Kim Dotcom after being arrested in 2012.

The main reason music streaming services are winning over millions of consumers is the fact that they
require no payment unless the user desires to pay. As Halmenschlager and Waelbroeck say, fight free
with free: giving the consumers what they desire while reducing piracy and even increasing profits (4).
The fact that the services are free warrants an excuse for pirates to try the experience out for
themselves. If free really isn’t enough to convince a switch then sound quality is another reason worth
switching.

Since free was a selling point for me personally to make the switch, I must say the added features have
been the factor in keeping me on Spotify. I’m not the only person who agrees with this point. Dörr and
Wagner’s research on Music as a Service (MaaS) mentioned how the social interactive features were
critical aspects of these services and must be implemented in order for them to have success as a service
and as a deterrence in music piracy. Delikan’s research also had high reports on the satisfaction of music
streaming services due to their social features and ease of use. His survey reported over 70 percent
approval for both the ability to discover new music and the time spent finding new music. After using
Spotify for a while now, I’d have to agree with them; I thoroughly enjoy the social features and they’ve
been key to me sticking around. However, after researching this topic and arguing the effectiveness that
music streaming services have at reducing music piracy, I’ve come to the conclusion that more studies
and research needs to be done on this field. Even though I’m convinced they’re doing their part, more
research would help pinpoint exactly how effective they are and for what specific reasons.

While digital piracy will never be completely abolished, music streaming services such as Spotify and
Deezer have positioned themselves at the forefront of the fight against piracy. Spotify was only made
available in the United States recently and it’s already making its mark, while Deezer is set to launch in
the United States late 2014. The only thing better than free service, quality sound, and awesome social
features, is variety. With the launch of Deezer in the United States later this year, and other similar
services working together, music piracy will continue to decline. Competition between the two and other
rivals will only increase the quality of service. As time goes on and record labels realize the true potential
of music streaming services, their increased support will make a difference as well. Like I said before, if
major record labels and others involved in the music industry truly want to do something about music
piracy, they need to further expand the use of music streaming services and conduct more research on
them. After all, Spotify has this old pirate convinced and I look foward to trying out Deezer when it’s
released in the United States as well.

Works Cited

Cammaerts, Bart, and Nick Anstead, comps. “Why Pay If It’s Free?”MEDIA@LSE Electronic MSc
Dissertation Series (2011): 0-39. London School of Economics and Political Science. Aug. 2011. Web. 11
July 2014.

Delikan, Mehmet D. “Changing Consumption Behavior of Net Generation and the Adoption of Streaming
Music Services.” (n.d.): 0–51. 1 June 2010. Web. 11 July 2014.

Dörr, Jonathan. “Music as a Service as an Alternative to Music Piracy? An Empirical Investigation of the
Intention to Use Music Streaming Services.”BUSINESS & INFORMATION SYSTEMS ENGINEERING 6 (2013):
383-96. Print.

Dredge, Stuart. “Kim Dotcom and Megaupload Sued for Copyright Infringement by Music Labels.”
Theguardian.com. Guardian News and Media, 11 Apr. 2014. Web. 27 July 2014.

Eddy, Max. “Game of Thrones Torrents Are Perfect for Delivering Malware.”PCMAG. N.p., 05 Apr. 2013.
Web. 27 July 2014.

France-Presse, Agence. “Supreme Court Upholds $220,000 Fine for Music Piracy.” Supreme Court
Upholds $220,000 Fine for Music Piracy. N.p., 18 Mar. 2013. Web. 27 July 2014.

Halmenschlager, Christine, and Patrick Waelbroeck. “Fighting Free with Free: Streaming vs. Piracy.” N.p.:
n.p., Feb. 2012. PDF.

Luckerson, Victor. “Spotify and YouTube Are Just Killing Digital Music Sales | TIME.com.” Business Money
Spotify and YouTube Are Just Killing Digital Music Sales Comments. TIME, 03 Jan. 2014. Web. 02 July
2014.

Marshall, Gary. “Best Music Streaming Services Compared: Spotify vs 7 Alternatives.” TechRadar. N.p., 21
Aug. 2013. Web. 21 July 2014.

“Piracy Collapses as Legal Alternatives Do Their Job.” TorrentFreak. N.p., 16 July 2013. Web. 11 July 2014.

Rojek, Chris. “P2P Leisure Exchange: Net Banditry and the Policing of Intellectual Property.” Leisure
Studies 4 (2005): 357–69. Print.
“Spotify Was Designed From the Ground Up to Combat Piracy.” TorrentFreak. N.p., 04 Dec. 2013. Web.
11 July 2014.

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Starve the Ego, Feed the Soul

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