Sure, Streaming Is Better Than Stealing. But Not by Much

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If you’re in the music industry, chances are you suck at math.

But this one just keeps adding up to zero – and the continued rise of legal streaming is at best a half-baked victory.

On top of that, illegal downloading really isn’t really going anywhere.  This isn’t a clear-cut game of displacement, as many seem to think.  So where’s the meaningful upside?

Some new data recently washed ashore.  NPD Group revealed that streaming volumes now rival downloading volumes, with roughly 30 percent of internet users accessing both methods in August.

But try not to yawn.  Because even if everything switched to free streaming tomorrow, the industry would find itself in only a slightly-better predicament.  Sure, there’d be greater usage data and feedback, and a bigger legal pen to try monetization experiments.  But there’d still be a donut.

Seems like the only group winning are free-riding fans.  There’s no doubt that Spotify can attract users, in the millions.  But the big issue surrounds this speculative story about premium conversions.  We recently learned from European sources that premium accounts now top 650,000, but doesn’t that sort of sound like Rhapsody or Napster?  In other words, does the paid side ever really scale?

Meanwhile, artists are getting pocket lint.  Spotify tries to spin this every time, but artists keep telling us the same story.  Ramp up your streams, and you won’t be ramping up your royalties.

That’s a big problem.