The long-running battle between music streaming services and piracy
The rise of music streaming and the invention of music streaming services have forever
changed how music is consumed. Consequently, music piracy has adapted to the changes in the
music industry and the consumers. Several studies were conducted on music streaming services'
impact on copyright infringement in music. Specifically, various pieces of research have been
done on the behaviour which results in music piracy in the age of music streaming (Oad et al.,
2021; Borja et al., 2014; Jeong et al., 2012). A consensus among these studies is that copyright
infringers do not see music streaming subscriptions as an alternative to piracy but as a tool for
piracy. Although streaming services might have enhanced piracy methods, they have played a
significant role in increasing the accessibility of music, in addition to making attempts to
decrease copyright infringement. In this paper, we will investigate the detriments of music
piracy, the benefits of music subscription services, and the state of music piracy in the streaming
service era.
Music piracy has had a significant negative impact on the economic side of the music
industry, especially, those behind the scenes. It is reported that the U.S. economy records $12.5
billion in loss annually, and as a consequence, 71060 people lose their jobs (Siwek, 2007). When
unpaid consumptions affect the record label’s revenue, non-artists suffer the most from the
consequences. Before streaming services, when physical sales were still mainstream, retailers
suffered from music piracy too. Reduce in internet traffic results in an increase in physical music
sales (Adermon, Liang, 2010). Artists, however, are not the biggest victims of copyright
infringement. Nowadays, typical “360 deals” that artists make with their labels have a royalty
rate between 14% to 18% (Kjus, 2022), and they benefit more from touring, live performances,
merchandise, and non-recording related revenues. An American rapper and producer Soulja Boy
is a prime example of an artist who sacrificed their music sale revenue to boost their career. He
used piracy as a tool of marketing by uploading his hit single “Crank That (Soulja Boy)” under
names of other mainstream hits on popular piracy websites in 2007. The same can not be said
about the producers. While some beat makers tend to compensate from the direct purchase of
their work, those who are offered a royalty rate or own a small portion of the master recordings
find themselves in a tough situation where they are not being paid the amount of money they
deserve. Thus, people behind the scenes suffer the most from the economic loss that unpaid
music consumption creates.
The advent of music streaming services changed the way music is consumed and made.
According to RIAA (Recording Industry Association of America), in 2011, 83% of U.S.
recorded music revenues were made from streaming, while only 11% was physical sales. The
drop in the revenue of physical music sales from 1999 to 2020 was more than 83%, decreasing
from $22.3 billion in 1999 to $3.8 billion in 2020 (IFPI, 2023). This significant change is a
byproduct of the internet gaining popularity and becoming an irreplaceable part of people’s
everyday lives. Physical music sales decreasing as much as they did could be correlated to how
mainstream streaming services such as Spotify and Apple Music have become in the last decade.
The major upside of it is that these platforms are making music more accessible. While audio
retailers sell a CD for a price range of $12 to $15, Spotify, the world’s biggest music streaming
platform by subscribers, has a subscription price of $9.99 a month. Does availability increase
consumption? A research on how much music consumption is influenced by the availability is
nearly impossible to conduct since the consumption of physical music can only be presented by
how many copies are sold or how much revenue was made. However, it is appropriate to
mention that global music industry revenues have been on an upward trend since 2014, and total
revenue made from streaming has increased by more than 89% from 2014 to 2022 (IFPI, 2023).
It is safe to say that music streaming platforms changed the music industry and made music
considerably available.
Music piracy is still relevant, even in the age of music-streaming, and its relevancy might be
dependant on the streaming platforms. Over-availability of music, nowadays, due to the
popularity of streaming services might be enhancing copyright infringement. Music streaming’s
sampling effect is when copyright infringers listen to the latest music on streaming services using
free-to-use services and downloading music they consumed illegally afterward (Oad et al.,
2021). Music streaming’s sampling effect could be seen from the results of the research where it
was shown that use of streaming platforms increased the likelihood of copyright infringement by
3.16% (Oad et al., 2021). What it means is that copyright infringers are seeing digital streaming
as a sample to test out new music, rather than a substitute to piracy. A possible explanation can
be found within the behaviour of music pirates. There are many risks to music piracy, and the
fact that music piracy is still as popular as it is suggests that copyright infringers are willing to
take the risk or is, simply, unbothered by it. Psychological risk is guilt, shame and
embarrassment that one feels when commiting illegal activities and the psychological risk that
music piracy creates is a moral discomfort (Jeong et al., 2012). One prediction is that unpaid
consumers have no respect towards the music industry and they feel no ethical dilemma when
copyright infringing music. Economic struggle of artists and producers of the product could be
no concern to the infringer. Furthermore, the legal state of music piracy is not as strong as it
should be to prevent copyright infringement. Record companies may not possess enough
resources to enforce legal actions against everyone (Jeong et al., 2012). Copyright infringers feel
very little perceived risks and penalties, thus they are comfortable doing an action that they know
is illegal. Due to the legal solutions being ineffective to minor consumers and the lack of moral
discomfort, music piracy is still relevant in this day and age.
Among the many inventions of 21st century, music streaming services are noteworthy due to
it being a prominent solution to a prevalent crime that is copyright infringement, also known as
music piracy. Its development and popularity forever changed the way music is consumed by
casual listeners. Some points may suggest that the advent of music streaming services
oversaturated the product itself, and the high accessibility enhanced the methods of those
illegally download music. However, it is crucial to point out that the boosted the consumption of
music, and benefitted the music industry and economy surrounding it. Employees of the music
industry are the biggest victims of unpaid music consumption. Employees of music labels and
non-artists that compensate from music royalty rate take huge hits from low-profits. As a result
of evergrowing music streaming numbers, physical sales decreased significantly, meaning that
the consumers are favoring the convenient way of listening to music by streaming the products
online. Nevertheless, even with music streaming services being as accessible as ever, unpaid
consumption is still a sizable issue. Therefore, as a solution to this problem, to decrease the
number of cases, a change in the copyright infringement justice system is needed. Most countries
have an outdated laws that haven’t had amendments since the music streaming services have
became mainstream.
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