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Music Piracy Down, Revenue Up, Thanks To New Legal Alternatives

Posted by: , 16:08 EST, Sat March 2, 2013

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Spotify, not law enforcement, was key to lowering piracy and raising revenue in 2012
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Image/Photo Credit: Sorosh @ Flickr, CC

The NPD group has published a new report that shows music piracy in a dramatic decline, and for the first time in a long time, shows that music revenue has increased year-on-year as a result.

But these positive developments are not due mainly to increased law enforcement efforts and anti-piracy education, but rather, the emergence of legal alternatives that now compete with piracy, the study shows.

Illegal downloads decreased by 26% from 2011 to 2012, with 40% of those surveyed saying they stopped downloading pirated music in this time period. 

But while up to 20% of those surveyed said their changing behavior was due to the shutdown of their favorite piracy sources thanks to legal and law enforcement actions (the preferred anti-piracy method by the music industry), nearly half said that legal options, such as Spotify and Pandora, were the main reason why they stopped their copyright infringing activities.

"Among other factors, the increased use of legal and licensed streaming services has proven to be an alternative for music fans who formerly used P2P networks to obtain music," said Russ Crupnick, senior vice president of industry analysis at NPD.

But despite the dramatic decrease in piracy rate, music revenue only inched up 0.3%. A small rise, but it's the first time any rise has occurred since 1999. In a separate report, the IFPI (International Federation of the Phonographic Industry) also noted that digital music revenue has grown 9 percent in the last year, clearly showing the shift in consumer spending as the music industry finally start to embrace the Internet age.

The specific shift to legal streaming options was also highlighted by the IFPI report. "Licensed music services are demonstrably meeting consumers' needs ... 62 per cent of internet users have used a licensed music service in the last six months," the IFPI's press release noted.


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