In Age of Spo­ti­fy, Pi­rates Rule the Mu­sic Stream

L'Opinion - - The Wall Street & I'Opinion - Anne Steele

Even as Spo­ti­fy and Apple Mu­sic have re­tur­ned the mu­sic bu­si­ness to growth by get­ting fans to pay, pi­ra­cy rates re­main stub­born­ly high, ac­cor­ding to the re­cord in­dus­try’s glo­bal trade or­ga­ni­za­tion.

The way people pi­rate mu­sic has evol­ved along with their le­gi­ti­mate lis­te­ning ha­bits, and pi­ra­cy is cur­bing the po­ten­tial mar­ket for sub­scri­bers, the In­ter­na­tio­nal Fe­de­ra­tion of the Pho­no­gra­phic In­dus­try conclu­ded in a re­port re­lea­sed Tues­day.

Though 86 % of consu­mers lis­ten to mu­sic via on-de­mand ser­vices of­fe­red by Spo­ti­fy Tech­no­lo­gy SA, Apple Inc. and others, around 38 % of them are get­ting mu­sic through co­py­right-in­frin­ging me­thods, a rate that has re­mai­ned consistent in recent years, an IFPI spo­kes­wo­man said. Most of those pi­ra­ting mu­sic – 32 % of the ge­ne­ral consu­mer po­pu­la­tion – use tech­no­lo­gy known as “stream rip­ping.” Stream-rip­ping web­sites create an au­dio file on a user’s com­pu­ter from a YouTube vi­deo or si­mi­lar source. Such sites ty­pi­cal­ly earn ad­ver­ti­sing re­ve­nue wi­thout com­pen­sa­ting ar­tists or la­bels. YouTube didn’t im­me­dia­te­ly re­spond to a re­quest for com­ment.

“Stream rip­ping al­so un­der­mines strea­ming ser­vices’ paid tiers that of­fer of­fline lis­te­ning to sub­scri­bers,” said the IFPI spo­kes­wo­man. “This is sti­fling growth of the le­gal mu­sic mar­ket.”

Re­cord com­pa­nies have ban­ded to­ge­ther to take ac­tion against such stream-rip­ping sites, and sco­red a vic­to­ry in a 2016 suit against one of the lar­gest stream-rip­ping web­sites, YouTube-mp3.org.

Glo­bal re­ve­nue from re­cor­ded mu­sic grew by 8.1 % last year to $17.3 bil­lion, ac­cor­ding to IFPI, the in­dus­try’s third conse­cu­tive year of growth fol­lo­wing 15 years of de­cline amid plum­me­ting phy­si­cal and di­gi­tal for­mat sales in an era of ram­pant pi­ra­cy. The rise was al­most en­ti­re­ly dri­ven by a 41 % surge in strea­ming re­ve­nue, which is now the lar­gest contri­bu­tor of re­ve­nue to the in­dus­try thanks to 176 mil­lion users of paid ser­vices like Spo­ti­fy.

While re­ve­nue for 2017 was still just 68 % of the mar­ket’s CD­fuel­led peak in 1999, in­dus­try wat­chers say the up­side for strea­ming could be much lar­ger with mo­bile-phone pe­ne­tra­tion in de­ve­lo­ping mar­kets and gro­wing fa­mi­lia­ri­ty with the ser­vices.

IFPI has tra­cked pi­ra­cy for se­ve­ral years but chan­ged the size and scope of its consu­mer­be­ha­vior sur­vey this year, ma­king year-over-year di­rect com­pa­ri­sons una­vai­lable.

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