France Officially Terminates Three Strikes File-Sharing Penalties…

In a world where the music fan is drifting away from downloads — paid, illegal, or whatever — does something like ‘three-strikes’ make sense?  France has decided it doesn’t.

Moving forward, file-swappers will receive automatic fines for bad behavior, and connections won’t be disconnected.  Instead, the focus now shifts to commercial offenders, including uploading sites and illegal mp3 sites.  In the translated words of the French Minister of Culture and Communication…

“The priority is now on commercial piracy, including sites that profit from pirated content without paying creators.”

(official statement, here) 

All of which means the “three strikes,” “graduated response” regime is now being replaced, with administering group HADOPI essentially neutered.  And let the hangover begin: French Minister of Culture and Communication Aurélie Filippetti is now calling three-strikes a “totally inappropriate fine,” while introducing automatic fines that start at 60 euros (about $77) and ramp upward after subsequent infractions.

The move follows some highly-contradictory and controversial results, especially as streaming continues to replace both paid and illegal downloads.  Initially, major labels in France were the biggest cheerleaders for HADOPI, despite obvious complications related to user privacy, accusations, and enforcement overreach.   But early results indicated declines in file-swapping volumes and locker-based uploading.

For example, here’s one graph trotted out by French rights society SNEP earlier this year, though the role of HADOPI was actively debated.

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Which brings us to some questionable causality: after all, downloads are also declining in the US, where ‘six strikes’ is basically a pussycat compared to HADOPI.  Perhaps the stream is the more potent anti-piracy pill, despite far lower payouts and artist compensation.

50 Responses

  1. Visitor

    In other headlines:
    France introduce new, automated 60-1500 euro fines for pirates:
    Nope, it’s no fun being a pirate anymore. Torrentfreak explains the new threats they are facing:
    “The concept of centralized BitTorrent sites is vulnerable to pressure from outside, and with increasing enforcement efforts it becomes harder and harder to maintain. New domains are still easy to come by, but the hosting situation is already getting problematic.”
    Not only is it increasingly complicated and dangerous to steal from artists these days — it’s also going to be expensive now if you’re French.

  2. jw

    The reason streaming is artificially popular in France is because Deezer is a French company… A national symbol of pride with hopes of conquering the world. Seriously doubt Spotify has much traction there.

    • Yves Villeneuve

      You should re-read my comment carefully because you are not comprehending very well. You obviously do not know the power of national pride in consumer affairs. I forgive you for your ignorance.
      Anyhow, another reason streaming services are artificially popular is, besides faking the number of active free users, nearly all except Rhapsody, are offered at discounts. Except Rhapsody, none of them are profitable.
      Ask yourself yourself the question, how will they become profitable? Scaling doesn’t work, ask Pandora. They either need to cut artist/label royalties or increase subscription fees? Take your pick and explain your reason.

      • jw

        Napster launched in 1999. The iTunes store launched in 2003. iTunes was not profitable out of the gate, it was subsidized by hardware sales. It wasn’t making money, but you never heard about it because it was a part of a profitable company. (And it was under much less scrutiny in the wake of Napster.) However, even as it began to make money years later, that would never have happened without the runway that Napster provided for the mp3 download format. Essentially, Napster initiated the format change that iTunes capitalized on. This was a multi-year process. For better or worse, iTunes would’ve never caught on without piracy popularizing digital music downloads.
        Spotify is in the awkward position of having to play the rolls of both iTunes & Napster, creating format change, but also having to live up to capitalization demands. This is a multi-year process. I wouldn’t expect Spotify to be profitable in the nearterm, but the potential upside is huge. Rhapsody, despite it’s profitability, has demonstrated what trying to initiate format change on a strictly premium model looks like. Adoption is sloooooow & the ceiling is comparatively loooooow. The free (ad-supported) model has to provide runway for the premium product to scale. This is clear to me, this is clear to Spotify, this is clear to Spotify’s investors.
        I don’t have any numbers that say when iTunes became profitable, but it was probably… I dunno, 7 or 8 years after mp3 downloads became a competitive format. So, to be fair, Spotify ought to have that amount of time to turn it’s ratio of free (ad-supported, but largely subsidized by premium subscription revenue) users to premium subscribers. Streaming as a format is still in it’s infancy, so when you decry it, it makes it seem like you don’t have a grasp on the greater context or the recent history of format change, & it makes it seem like you don’t recognize what are obviously culture-wide changes in the ways that we interact with data. There is no reason to turn your nose up at the potential upside of streaming… it will either happen or it won’t, but that’s years down the road & things look really good if you look at them in context. Is $120/yr not more than most music fans you know spend on recorded music? I’m all for as many people as possible spending that much on recorded music.
        And maybe more people are paying for bundled streaming than are actually using it, but… look, this isn’t really about numbers. This is about culture-wide shifts that are much bigger than the music industry. Adobe only sells cloud software now. Gaming is moving to the cloud. Banking is moving to the cloud. Health records are moving to the cloud. Movies are moving to the cloud. USB cables are becoming obsolete. When you say “artificial popularity,” it sounds like you’re denying what is clearly inevitable.
        Like you said, Deezer actually is profitable. Spotify will be profitable when their free-to-premium ratio turns over. Comparing Spotify to Pandora is silly, but that’s for an entirely different debate. Scaling doesn’t work for ad-supported streaming, you’re right about that. But that’s a loss leader, they’re trying to create a new music format, which has to be done in order for subscription streaming can take hold, standalone or bundled.
        And if nationalism played such a huge part in streaming adoption, wouldn’t Rdio be hugely successful in the U.S.? Well, they aren’t. (Even in spite of being a great product.) I think you’re oversimplfying things to an enormous degree.

        • Henry Chatfield

          You, jw, fucking nailed it. Particularly with your first point about Napster paving the way for iTunes. This comment could be a DMN article in itself.
          Thanks for sharing your opinion.

          • Visitor

            “Just trying to state the obvious.”
            Unfortunately, you failed miserably.

        • Yves Villeneuve

          I don’t believe Spotify is a game changer. You can’t force consumers to pay $120 per year unless they want to and you can’t force them to agree having unlimited access to something they will never use. I just described the average music consumer yet you artificially believe everyone wants to pay $120 per year for unlimited music access. You simply cannot dictate your unique personal “ideals” and expect everyone to accept them.
          iTunes is creating 500,000 accounts per day. Based on iTunes account holder spending patterns, 30% or 150,000 can be considered music accounts. Every week, ITunes creates 1,000,000 new music accounts. How long does it take for Spotify to receive one million new subscribers?
          iTunes was in France before Deezer. I think that pretty blows your theory that first-in trumps national pride. Your theory does make sense for other countries without national champions however. ITunes is in a minimum 110 countries. Spotify? Less than 20 I believe. Spotify a game changer? I doubt it, and that’s based on the first-in theory, which we both mostly agree on.
          Rdio is not popular in the USA because iTunes is this country’s national champion. It’s irrelevant and random who next fall in line. You will note that Rhapsody was the first to offer a legal option in America but consumers naturally gravitated to the more “common sense model” from both a business and consumer perspective. The “ownership” model is a universal model because all participants are treated fairly.
          You easily dismiss the Pandora example without a reason. The fact of the matter is, bandwidth costs play a pivotal role whether a tier is profitable. If you expect bandwidth costs to sufficiently decrease then I guess Spotify will become profitable, otherwise it won’t unless it cuts artist/label royalties or increases subscription fees or cons/deceives consumers into subscribing. Using costs it can’t ultimately control to project if a company is a game-changer is irrational.
          I would say your comment, though nicely written, is a pretty good Con attempt in itself.

          • jw

            Jesus Christ, you are swimming in koolaid. I don’t even know how to structure a response to that because you’re so far out in left field.
            Your “500,000 acounts per day” argument is creative. But you’re trying to infer numbers that actually exist. You’re trying to suggest that digital downloads are healthy & growing. But it’s clear that digital download sales are actually dropping. And those 500,000 accounts are for apps. If you buy a Mac you HAVE to sign up for the App Store to keep your software up to date. I’m sure you have to have to have to have one for an iPhone, too, and for Apple TV. This is Apple’s policy across all of their products now. That’s why you see accounts being created. iTunes just plainly & simply does not enjoy 1 million new “music accounts” per week. That’s just not what the numbers show. Go look at the numbers, man.
            How long does it take Spotify to receive 1m new subscribers? It’s the fastest growing (legal) music service I’ve witnessed. Do you know what iTunes’ sales were like the first 3 years? You should look that up. Even if people were actually signing up in droves to download music from iTunes, like you’re suggesting they are, how on earth do you think it’s reasonable to compare a service that’s been around for 10 years that’s based on a format that’s been around almost 15 years to a service who has been around (in the US) for just 2 years & is trying to basically create a new format?
            I dismissed your Pandora example because it was retarded. Pandora is basing it’s service on the radio model, & consumers traditionally do not pay for radio. So it’s forced to create it’s margins based on ad revenue in the face of comparatively exorbitant royalty rates. If Pandora can merely survive paying what it pays, I’d say they’re doing quite well. This has nothing to do with the cost of streaming songs & everything to do with shitty ad rates & high royalty rates. Therefore it has no bearing on whether or not Spotify or Deezer or any other streaming service can be successful. I just wasted my time explain something that should be incredibly obvious.
            What insight do you have into Spotify’s costs? Very little, I suspect.
            Like I said before, Spotify will not be profitable until their ratio of free-to-premium users turns over. On what basis do you think Spotify subscribers are being conned/deceived? I’m a subscriber. And I listen to more music than I ever did. And I pay for more recorded music than I ever did (both in terms of my Spotify subscription & vinyl/cds of artists I discover via Spotify).
            That’s the last response you’ll get out of me, it’s a waste of time. You clearly don’t have the understanding that you think you do.

          • jw

            Also, for additional clarity, the “500,000 acounts” number comes from the developers’ conference, where Tim Cook was basically bragging about the ecosystem to developers and the media. It had nothing to do with digital download sales.
            It was never meant to infer what you’ve repeatedly been trying to make it infer.

          • Yves Villeneuve

            500,000 accounts and 150,000 music accounts per day is a fact and is dependent on independent research companies. So look in the mirror, in regards to your kool-aid remark.
            A major selling feature of Apple products is the iTunes and App stores. It’s unrealistic to believe otherwise. Kool-aid anyone.
            In the first 6 months, downloads are dropping in the USA, not necessarily worldwide. They are up in the UK, at the very least.
            Rhapsody has been around longer than 10 years in the USA, longer than iTunes and Spotify so it is a pretty good test which is the winner here.
            Pandora and Spotify et al cannot control ad rates or bandwidth costs but they can to a greater degree control artist royalties and subscription prices. It is easily possible to compare both yet you drinking the kook-aid.
            I noticed that you appear to have conceded in the national pride vs first-in argument with iTunes winning in the USA and worldwide, as you skipped over it entirely in your last comment. I can now only assume your last comment was merely an act of trolling.
            Lastly, studies have shown, based on Spotify’s own reports and fake active user account totals, 70% of those who register never come back to use the Spotify app. When you exclude the fake total, it’s more like 90% never come back. Spotify uses the fake 70% total because it parallels with the iTunes 70% non-music accounts(verified by an independent research company based on account holder spending patterns). Deceptions like these help Spotify to generate venture capital investments.
            Keep drinking the kool-aid.

          • Yves Villeneuve

            “Time will tell.”
            Sorry, it already did and here’s what it said:
            iTunes is a huge success.
            Spotify loses money by the hour.
            Pandora committed suicide, rip.
            Meanwhile, music sales rose in 2012 for the first time in 14 years!
            As the direct result of the first internationally co-ordinated war on piracy ever.

  3. Visitor

    “You’re trying to suggest that digital downloads are healthy & growing. But it’s clear that digital download sales are actually dropping.”
    The wonderful news is that music sales rose last year for the first time since 1999!
    Source: Financial Times, February 26, 2013:
    Right holders predicted that this would happen when MegaUpload’s fall initiated the first internationally coordinated war on piracy took off in January 2012.
    Since then we have seen a lot of beautiful initiatives around the globe:
    * New Intellectual Property Crime Unit in the UK this month.
    * New tough anti-piracy laws in Russia, Japan, Norway and several other countries.
    * New improved version of Hadopi on its way in France: Pirates now have to pay!
    * 6 Strikes and lots of other initiatives in the US.
    * New anti-piracy technology on its way.
    * Torrent sites (originals as well as proxies), lockers & illegal Usenet index sites shut down all over the place.
    * Huge fines to piracy site owners.
    * Paypal boycot piracy sites.
    * Credit card companies boycot piracy sites and vpn’s.
    * Huge brands stop their cash flow to piracy sites.
    * The final verdict over Tenenbaum sets precedence and sends strong signals to criminals: Yes, a stolen song is indeed worth $22,500!
    You may not like the facts, but that fines do prevent people from stealing.

    • Econ

      Yves is a brick wall – thick, dumb, and there forever. You’re better off throwing rocks at it than trying to reason with it or explain something to it.
      I might be insulting brick walls though. Brick walls at least serve a purpose.

      “despite far lower payouts and artist compensation. ”

      Try “BECAUSE”. The consumer has been yelling for decades that the music indistry is overpricing its product. Most consumers for the past 50 years have never bought music – they’ve listened to ad-supported radio and that’s it. The recorded music industry only ever offered limited run singles (and only for the 100 most popular songs, the rest required meticuous search that 99.5% of consumers wouldn’t bother with – I know because I’ve collected 45’s for 40 years) and LP’s/CD’s which were easier to find but at a much higher price when the consumer’s target is just one or two songs. I remember my father stopped buying records in the SIXTIES when you could no longer listen to the album before buying it.
      The recorded music industry retarded their growth for so long they considered it “normal”. While a lot of Napster’s appeal was the price, too many people are discounting the appeal of being able to get EXACTLY what you want without having to drive all over town or make a special order or pay for extras you don’t want.
      Those who separate more wheat from the chaff will make more money. Music streaming, in all its tiers of service, allows the consumer to purchase as little chaff as he is willing to budget for. It’s not surprising that an industry that has made most of its bank on selling as much filler as possible is going to fight against it. But the consumer is kicking ass and the fight is just about over.

      • Visitor

        “the fight is just about over”
        Spot on — did you see the news today?
        Outside of the public eye AT&T has lent copyright holders a hand inventing new anti-piracy tools. Previously we reported that the Internet provider has patented a BitTorrent monitoring system, but the company is sitting on an even scarier invention. AT&T has patented a mechanism through which it can detect copyright infringing files that are sent over its network in real-time, and then stop the transfer or report the perpetrator to copyright holders or law enforcement.”

  4. jw

    Here’s where you’re wrong about the 500,000 per day. Theoretically 500,000 people are signing up for iTunes accounts per day, & 26% are spending $12/year on music. That’s 130,000 new accounts per day who will theoretically buy an iTunes album in the next year. But the 130,000 accounts figure is just conjecture. It could be 65,000 buying 2 iTunes albums. Or 44,000 buying 3 iTunes albums. Or 33,000 buying 4 iTunes albums. Or 15,000 buying 8 iTunes albums. And truthfully it’s a mix of all of those… plenty of those accounts are just going to purchase 1 or 2 songs, & they’ll be offset by other users buying more music.
    So you can’t reliably extract any number of users or suggest that music downloads in the store has a certain momentum based on the figures you’re citing, which are simply averages. It’s insufficient data to make the point that you’re trying to make. You can’t use those numbers to make comparisons to Spotify’s user account growth.
    Sure, people are signing up for the iTunes store in droves, & music is certainly a beneficiary of interest in apps & videos. And, true, a lot of folks who are very late to the game are just now transitioning from physical media to digital downloads & maybe they’re signing up just for music. But the reality is that, in spite the influx of users, actual sales are plateauing, & a culture-wide transition to the cloud is taking place.
    iTunes has the world’s greatest marketing machine behind it, an ecosystem of some of the most sophisticated tech products on the market, & plenty of the most loyal users on the planet. And years and years of brand recognition. Spotify is brand new & largely unrecognizable to the general public, & yet they’re totally on pace to replace iTunes if you look at iTunes’ sales graph all of the way back to 2003, simply because it’s a better product. It won’t happen immediately, like I said this is a multi-year transition to a new format, but it will happen. Even Apple would tell you that the future is iCloud/Match or some type of streaming service.

    • Yves Villeneuve

      Sure, it’s conjecture. But NPD research group reports there are 45 million downloaders over the age of 13 in the USA.
      There are roughly 180 million Internet users over the age of 13 in the USA. see and USA census data.
      By my calculation, conjecture works very well in this case.

    • Yves Villeneuve

      You are also wrong when you say 26% are spending $12 on music.
      100% are spending $12 on music or on average 26% are spending roughly $48 on music.
      Nice Con job attempt.

      • jw

        Good catch. Not a con job, bad math. The adjusted per-user spend should’ve been ~$46, not $12, which makes a big difference. Sloppy on my part.
        I’m not arguing that iTunes isn’t making money, & that they aren’t a hugely successful, mature business. I’m just saying you can take those totals & you can paint whatever picture of momentum suits you. 500,000 new users each day that spend $12/yr on music, 250,000 that spend $24, etc.
        Rather than guessing, the numbers should be interpreted along something like this (admitedly dated) graph…

        That paints a different picture than what you’re painting, does it not?

        • Yves Villeneuve

          I fail to see the point of this graph. These are unit sales not dollar sales. Follow the money, that’s where it counts and is the best way to value a product.
          Besides all lines are fairly straight forward. The music market is a much more mature market than the app market which has tons of free stuff therefore is naturally steeper (because of all the freebies).
          You are way off base on this argument.

          • jw

            See my comment at the bottom for why the chart I posted matters.

    • Yves Villeneuve

      In any case, how do you get music consumers who only spend roughly $48 per year to expand their expenditures to $120 per year anytime.
      As the bar graph show, music is competing with a lot of other products. Are you going to exterminate those other products.
      The USA makes a good average since it is a multi-cultural society with countless immigration links to all parts of the world.

      • jw

        By offering a better product. Spotify is a better product.

        • Yves Villeneuve

          So says the guy who spends $120 or more on music per year and needs to have unlimited access to all music all the time.
          If you are spending less than that at Spotify, you are useless to them and costing them money. I know there are freeloaders (these people are easily offended by the term “freetard”) who will sulk loudly for a very long time when the major labels refuse to license the ad-supported and discount tiers in order to convert these freeloaders into paying music consumers of the premier tier.
          Don’t confuse yourself with the average iTunes user (average music consumer) that pays $46 a year on only music they want to hear and own, very likely discovered without inconvenience or effort, through radio or a friend(shared links or earbuds or whatever).

    • Yves Villeneuve

      The rest of your comment is unsubstantiated so-called “facts”.
      When you have an open-mind to true facts and stop feeding us your bullshit ideals then maybe true experts on the issue will take you seriously.

      • jw

        The music industry is in the toilet because they’ve been relying on data about the present, rather than looking towards the future. Where other media industries have been able to capitalize on new trends, the music industry has missed every single one of them.
        The music industry needs fewer number crunchers & more anthropologists. I’ll admit, I sometimes get lost in the numbers, & I was never trying to make the case that iTunes isn’t doing well. But the picture you were trying to paint about momentum is patently untrue.
        The difference between the music industry & the technology industry is that the music industry looks at the current state of things & says, “Where is everything going?” And they get behind the ideas of the day, & they miss every trend that’s coming around the bend. And not only do they miss them, they flat out reject them. A technologist, on the other hand, says, “Where COULD things go?” And they make it so.
        Based on what seems to be your thinking, you would’ve scoffed at the iPhone. “How are you going to get people to pay hundreds & hundreds of dollars for a phone? That doesn’t reflect our current numbers, there’s no way.” You just build a better product, that’s all. You would’ve scoffed at Napster. Just like you scoff at Spotify.
        The state of the industry doesn’t reflect very well on the “true experts,” so I’m not sure I care for them to take me seriously. I’d rather them be in complete disagreement, based on their track record over the last 15 years or so.

        • Yves Villeneuve

          I am pretty sure the tech guys at Apple and Amazon are forward looking as well.
          Get your head out of the sand.

          • jw

            Yeah, Apple is forward thinking, but they’re not going to kill their cash cow. Their plan is to eventually charge users to stream the music they’ve already purchased. At some point, iTunes will only offer downloads as an option, the default will be to store it in your icloud locker. Amazon already does this.
            But why would you pay to have a limited library when you could pay to have an unlimited amount? Whatever the average music spend is, whether it’s $35 or $45 or whatever, plus the iTunes Match fee of $25/yr, that’s $70 right there, which is more than Spotify Unlimited, & not too far from the $120 of Spotify Premium.
            It’s not the service for everyone, but it’s the service for A LOT of people.

  5. david@indigoboom

    Well written JV.
    I have been in the distribution biz since 1998-99 and am constantly reminded of how short the collective “expert” memory span is regarding major shifts in consumer behaviour. The idea of downloading a music file was completely ridiculed by so many of them even well into Napsters life cycle. Interestingly no one seemed to remember who had said all these retarded things after they where all proven wrong and the “experts” stayed experts.

  6. Yves Villeneuve

    I should probably make corrections. Deezer and other similar companies might be profitable in its deals with mobile telecom firms but only because consumers are conned into subscribing because the mobile telecom firm gives it away for free or consumers are forced to subscribe. The resulting effect is more subscribers and revenues but as a percentage of total less are active equals less usage of the music service equals less costs equals more profit.
    As as standalone service, Deezer, like Spotify, would not be profitable with its current 3-tier service.

  7. GGG

    Yea…people actually hate streaming but do it anyway because the company is French. Makes perfect sense.

    • Yves Villeneuve

      National pride can make people do stupid things. That’s a fact, Jack.

      • GGG

        I don’t disagree with this, but if you think deciding to stream music is because of pride and not because people just want to stream music you are even more ridiculously deluded than I already think. It’s streaming music for christ sake, not the fucking world cup.

          • GGG

            My god, dude. You are the biggest fucking moron I’ve ever interacted with. And being on the internet, that’s saying a lot…
            I don’t use Apple products because they’re American, I use them because I like them and they work well. I drink Scotch and Irish whiskey more than I drink Bourbon. I’m a fucking traitor!!! I use Spotify and I’m American! I’m a traitor!!! And hell, I had a friend working for Rdio and I still used Spotify.
            See, it’s not about pride, it’s about liking a product/service. Does “Buy American!” and “Buy French wine only” exist? Of course, but it only goes so far.

  8. James

    So how many downloads can I have for a 60 euro fine? Might be a sweet deal…
    (Joking… mostly. But clearly it’s important that any fine is set at a rate that is a real deterent.)

    • Visitor

      “So how many downloads can I have for a 60 euro fine?”
      One. 🙂
      So iTunes is a nice alternative.

      • Pinko

        Or you can just get a VPN or encrypted USENET for 10 USD and download a billion songs. Now, that is a really nice alternative to iTunes, and NO ONE in the whole world has EVER had a fine for doing that.

        However, if you don’t want the trouble of having obsolete MP3s making a mess on your harddrive, you could also just listen to whatever you want for free on Spotify or YouTube. That is usually what young people do these days.

        • Visitor

          “Or you can just get a VPN”
          The bad news for pirates & pedophiles is that credit card companies began to ban vpn providers last week…
          “VPN services are no longer allowed to accept Visa and Mastercard payments due to a recent policy change”

          And that’s just the beginning. Again, iTunes is such a nice alternative:
          * You’re not going to pay any fines, ever.
          * You’re not going to jail.
          * You don’t get vira and malware.
          * It’s good for your paranoia.
          * It’s a great place to explore music — you get 90 secs for free.
          * You don’t get screwed when your vpn disconnects — oops, sorry ’bout that — or its owner is subpoenaed.
          * You make sure that your favorite artists can afford to make new great music for you.

  9. jw

    Ok, Yves, here’s the math. Feel free to correct me if you feel like I’ve made any errors.
    The 500,000/mo trend looks to start in Sept ’11, based on the chart that you posted. At that point in time, there were about 225m total itunes accounts, & users were spending on average $17 per year on music downloads. Currently there are 575m total itunes accounts, & users are spending on average $10 per year on music downloads (I’m projecting that number based on the figures you posted).
    If we were to assume that spending for music downloaders stayed consistent at $17, we could infer that 340m iTunes accounts download music now, & the remaining 235m do not. (This is done by multiplying the total users, which is 575m, by the current average, which is $10, & dividing those by $17.) However, this takes for granted that every account downloaded music in Sept ’11, & we no this is not true (based on the graph that I posted).
    In order to get a reliable yearly spend figure, we have to go back to before the app store launched in Sept ’08. The average music spend, at the time, was around $35 (this figure is still skewed by software purchases, which suggests that the figure would actually be even higher, but at least this gives us something to work with). With this number, we can infer that 109m accounts bought music in Sept ’11, & 116m did not, and currently 165m accounts buy music & 410m accounts do not. This reflects the graph that I posted.
    From these calculations I think we can extract some figures that more accurately reflect the real behavior of iTunes users. Overall, accounts grew by 350m from Sept ’11 to now. 56m of these accounts download music, & 294m do not. This indicates that 16% of new accounts end up downloading music.
    Admittedly, this doesn’t account for apps eating into potential music spend, so it could be that the true avg music spend is less than $35, but at least this model doesn’t commit the cardinal sin of assuming the Sept ’11 total can be used as a baseline for music downloading account totals.
    I sketched a graph below to help you visualize these figures.
    Image and video hosting by TinyPic

    • Yves Villeneuve

      There are 45 million music downloaders in the USA as per NPD Research Group. In other words, roughly 25% of Internet users in the same age group are music dowloaders. iTunes USA market share is roughly 65%. We can easily extrapolate 25% onto the iTunes account total of 575 million. There are roughly 144 million iTunes music downloaders.
      The RIAA reports download revenues(singles and albums) at $2.6 Billion in 2012. Average spend per downloader is $57 per year in the USA alone.
      Based on the bar graph, average spend per iTunes music downloader is $48 per year worldwide after annualizing the quarterly data. There is no valid reason not to accept this number.
      Sorry, but your math and logic do not make sense to me. I may be missing something but I doubt it. I’ll just chalk it up to that you are merely trolling. Seeing that this will waste my time if I continue I will end this discussion here from where I stand.

      • jw

        Those are all in the ballpark of my figures. I don’t have a problem with them, they’re all actually more conservative than my estimates.
        When you plot those numbers, the music growth is even more conservative than what I sketched.
        In light of that, how can you argue that iTunes is signing up 1 million new music downloaders per week at an average of $48 per year? If you multiply that out (1m x 52 x $48) you get almost $2.5 billion in growth. When all reports seem to indicate that digital downloads are plateauing.
        That’s what I’ve been getting at this whole time.
        It seems to me that far less than 30% of new accounts are downloading music (less than 15%, I would guess) & that the average spend is probably decreasing to even things out.

      • hippydog

        Quote: “Sorry, but your math and logic do not make sense to me. I may be missing something but I doubt it. I’ll just chalk it up to that you are merely trolling. ”
        if everyone hasnt completely clued in yet..
        Yves is a troll.

        Stop Feeding the Troll please..

        • GGG

          If Yves is a troll and actually recorded two albums of shitty music and posts this much, he’s actually MUCH more pathetic than I already think.
          Unfortunately, that is not the case. He is a real person that is extremely delusional.

          • hippydog

            Quote “He is a real person that is extremely delusional. ”
            The original idea of a “troll” has since been expanded to also include the people who are “real” and not anonymous.. All of his actions peg him as a troll, and he should be treated as such..
            just sayin..
            But if everyone wants to continue banging their collective heads against the cement wall.. enjoy.. 😉

          • Visitor

            ‘Trolls’ belong to fairy tales. We’re all people here.

  10. jw

    Sorry, but your math and logic do not make sense to me. I may be missing something but I doubt it. I’ll just chalk it up to that you are merely trolling. Seeing that this will waste my time if I continue I will end this discussion here from where I stand.
    What you’re missing is that if there are 144m consumers downloading music on iTunes, you’re projecting that there should be 200m this time next year. That’s over 30% growth.
    iTunes is creating 500,000 accounts per day. Based on iTunes account holder spending patterns, 30% or 150,000 can be considered music accounts. Every week, ITunes creates 1,000,000 new music accounts. How long does it take for Spotify to receive one million new subscribers?
    This just doesn’t reflect reality. It doesn’t reflect the trends, & it doesn’t reflect other reports of digital music sales. What you would have to assume to get those numbers is that many more than 144m users are buying music & that they’re spending much less than $48 per year each. Essentially, what you’re calling “account holder spending patterns” are not actually spending patterns, they’re just overall percentages. You’re wrong in thinking that you can quantitate behavioral trends from general sales data.
    You’re just not making any attempt to see the bigger picture here, & you’re relying on incomplete data to extrapolate ridiculous growth numbers that are fictional in order to downplay streaming success stories by comparison. Maybe you’re not being intentionally misleading, maybe you just don’t realize your mathematical mistakes, but either way you slice it, you’re being very misleading.