Australians turning away from music piracy: Spotify

Australians are moving away from downloading music via copyright-infringing file-sharing services with the rise of streaming music services, according to a new study released by streaming music provider Spotify.

Spotify's director of economics Will Page presented the findings on Tuesday at Communications Minister Malcolm Turnbull's online copyright infringment forum. The company is one of approximately 30 licenced streaming music services to have launched in Australia in recent years, according to the Australian Recording Industry Association (ARIA).

The study, conducted with data analytics company MusicMetric, looked at the music downloads in December 2012, and compared those to December 2013. Page told ZDNet today that December is the busiest month for the music industry in the lead up to Christmas, and the results showed a 20 percent decrease in the volume of music infringement over peer-to-peer services in that time, while demand for TV and film over peer-to-peer was four times more than music.

Page said there were limitations to the study, including that the metrics didn't count cellular data, but he said that would be limited as people tend to move over to fixed line when downloading torrents due to the high data costs on mobile, but he said that the data would be more reliable than surveys often conducted by music industry lobby groups, which canvas a small section of the public.

"Doing what so many people do which is having a 2,500-person survey and extrapolating that across 24 million Australians; I just don't think that is adequate anymore," he said.

Groups such as Music Rights Australia and ARIA have said in their submissions to the government's discussion paper on copyright infringement that according to Score/Nielsen data, 26 percent of total internet users worldwide still use unlicenced music services.

Page admitted copyright infringement for music was still a problem, but it was slowly reducing.

"There is still a big problem with music piracy in Australia, what a lot of those surveys don't catch is a trend," he said.

"The problem persists, but is trending down."

Page said he would continue to analyse the trends on music copyright infringement in Australia, stating that the country was well behind in the debate.

"The less of a problem with piracy, presumably the more of a success for [Spotify]. What you ultimately want to get is those artists in Australia paid," he said.

One early criticism of Spotify has been over the rates paid to artists from the streams on the service. The company doesn't pay per song stream, but there have been estimates that an average song pays between US$0.006 and US$0.0084 per stream. The company has claimed that niche albums can make US$3,300 from Spotify per month as of 2013, while top albums can make over US$400,000 for the artists per month.

Page said a focus for his analysis work at the company is how Spotify users can discover new artists.

"The data we have is just a treasure trove. One of the things I've been doing a lot of work is on discoveries. I don't care if I've got 100,000 streams or 10 million steams; what I care is for each of those individual people on Spotify, how did they find their first stream," he said.

For Spotify, time-poor or lazy customers were generally finding new music through playlists created by other users.

"The role of curated playlists is almost a means to an end, and they're gaining in popularity. What Spotify is doing is trying to win attention for music. The playlist is a great way of discovering given you have no attention span."

One barrier to the take up of streaming services is the use of data on mobile devices to stream the music. Spotify and a number of other companies are overcoming this issue with T-Mobile in the US where the telco is allowing customers to use the service without it counting towards their monthly plan. In Australia, the Beats-owned MOG streaming service is free for Telstra customers.

Page said that while the company doesn't have any agreements in place with Australian telcos, the zero-data offering would help get more users on board.

"When I look at that, I think the economics of risk kick in. What consumer wants is content; what they don't want is nasty surprises," he said.