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Spotify really does reduce music piracy, but at a cost

Jon Fingas, @jonfingas
October 28, 2015
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Spotify swears up and down that its free music streaming helps curb piracy. But does it really? Yes, if you ask the EU... but it's not the cure-all that the company might suggest. A European Commission study claims that there's "clear evidence" of Spotify reducing illegal downloads, with every 47 streams leading to one fewer bootlegged track. However, that's offset by the lost revenue from people who might otherwise buy songs outright -- there's one lost song sale for every 137 streams. The service is ultimately "revenue-neutral" for the music business, according to the study.

The findings show how the industry is in a tight spot. While labels want to discourage free streaming and get more people paying for subscriptions, it's that no-charge access that's preventing some users from simply pirating whatever tracks they want. It's true that streaming services like Spotify are quickly becoming the main revenue sources for at least some publishers. However, they might not see much real growth until they either convince you to pay or get a bigger cut from free, ad-supported services.

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