We don’t talk a lot about piracy in the music industry anymore, but it still exists. In 2018, more than a third of music consumers still pirated music. In 2020, INCOPRO, on behalf of the UK’s PRS for Music, showed that piracy in the form of stream-ripping grew by almost 1400% between 2016 and 2019. The question is how to analyse this activity, how to analyse the pirates, and how to determine the effect and impact of piracy on the current state of the music industry.
How piracy has changed
Back in 1999, when everybody I knew used Napster and Kazaa, piracy involved quite elaborate peer-to-peer networks. The music I hosted, for example, would be shared and downloaded by others through those networks and vice versa. Nowadays, the main act of piracy comes through ‘stream-ripping’ which is most common from YouTube streams, but also happens from streaming services such as Spotify or Deezer. In 2019 MusicWatch published researched into ‘stream-ripping’ showcasing growth of the phenomenon. The two main reasons provided are: 1) being able to listen to songs offline; 2) liking a certain song, but not enough to buy it.
Both of those main reasons are exactly why streaming services displaced widespread illegal sharing and downloading of music. They provide ease-of-access and in paid tiers offline listening is available. Moreover, back around 2014, just before recorded music growth kicked back in, MBW wrote how amazing it was that piracy had dropped almost completely, giving the example of Norway as a country with an early high adoption rate of streaming services.
That third reason highlighted on the infographic is actually the more interesting one: random searches for music lead people to apps and websites that allow them to rip streams illegally into MP3 files. This signals a broader issue then a simple narrative of ‘bad pirates.’
The Ethnographic approach
Considering the financial impact of piracy on the recorded music industry it’s no surprise there is a vast body of empirical, academic research into it. A paper from Steven Caldwell Brown from 2016 aimed to make sense of how people engaged with and defined music piracy. This built on the work of many others who had previously shown how illegal downloaders also spent the most money on music. One example comes from a cross-cultural research by Joe Karaganis and Lennart Renkema and published in 2011. In their ‘Copy Culture in the US and Germany‘ they showed that those who spend more on music were also those who downloaded the most illegal music files. There’s a question whether that value that these file-sharing pirates placed on music is now captured by the likes of Spotify. If you previously downloaded illegal music files but also spent $100 on recorded music each month but switched to a Spotify paid account right when they launched it’s only now, after 12 years, that you will have matched your previous yearly spend on music.
It’s not just music
Outside of the music industry, piracy also played its role. Again, streaming services, such as Netflix or Amazon Prime Video, provided an ease-of-access and affordable way to access lots of content bringing piracy numbers down. However, the competitive model in video is much stronger than in music. There’s more focus on originals, differentiation of content, and exclusive deals. Take, for example, Batman Begins & The Dark Knight and imagine that happening to a major artist’s records.
The difficult thing is that with our audio streaming services we expect everything to be available. If that’s not the case, there’s a fear listeners will start downloading again. But that’s not necessarily a bad thing when those who pirate are also those who consume the most. Recent research by Omdia shows that even now pirates are just ‘content hungry.’
So why do these pirates pirate? Because they have reached a maximum they can spend on various streaming services per month or because they cannot find a specific title through legal services. In the video world, both of these reasons are fair enough. In music, they don’t hold up. Basically all music is available on each major streaming service. With a subscription to one of these you get access to all of that music.
The future back thinking we need
The problem with piracy isn’t a problem with pirates. In the music industry, those who traditionally pirate the most music files are those who, in terms of spend, value music the most. What we see in the video business is a big phase of unbundling: multiple subscription-video-on-demand services, cable TV operators, free-ad-supported-streaming TV, etc. In the music business, we have an era of the bundle: buy-one-get-all-music-ever. Those artists who lean into the creator and passion economies try to differentiate their income streams and escape the bundle. This differentiation is necessary because for the vast majority of artists the bundled streaming service system doesn’t offer a good valuation of their art. Due to the increased competition surrounding video, creators are better valued. Perhaps, then, piracy is a necessary evil in a system that better values the art created?