Ever since the rise of file-sharing sites during the past decade, a few recurring themes have been pushed by the world’s largest record labels. Alongside claims of astonishing losses and irreparable damage being done to the entire industry, one notable defeatist mantra raised its head time and again.
The notion, that “it’s impossible to compete with free”, sat well with lawmakers and governments, who looked at offerings coming out of The Pirate Bay and thousands of other similar sites and widely agreed that no-one will pay for something if they can get it for nothing.
The massive rise of iTunes well and truly smashed that theory (even if many were slow to admit it) but another project in development not only had plans to compete with free by offering a decent basic service for no cost, but also had eyes on wooing customers into happily parting with their cash to obtain a superior product.
Five years after its launch in its Swedish homeland, Spotify is achieving its aims. Against all the apparent impossibilities of doing business with freeloading cheapskates, the streaming music service is coming on in leaps and bounds and has recently secured a fresh $250m in funding.
Yesterday, in a bid to build stronger bridges with partners, Spotify launched SpotifyArtists, a new information portal designed to enable artists and their support services to better understand and utilize the streaming platform. Interestingly, and hidden away underneath information on the mechanics of the site, comes the clearest statement yet that right from the beginning Spotify’s target market was one inhabited by music pirates.
“Spotify was designed from the ground up to combat piracy,” the company confirms.
“Founded in Sweden, the home of The Pirate Bay, we believed that if we could build a service which was better than piracy, then we could convince people to stop illegal file-sharing, and start consuming music legally again.”
Right from the beginning Spotify founder Daniel Ek held a solid belief that if his service offered a better experience and superior convenience than that being offered by The Pirate Bay, people would jump on board.
And they have. Earlier this year the service confirmed it had amassed a total of 24 million users worldwide, 18 million on their ad-supported service and 6 million paying a subscription.
“A key part of this [success] has been in ensuring that Spotify has a free [ad supported] tier. By offering this free tier, Spotify is able to compete with piracy on cost and bring music consumers into the legal framework,” the company notes.
To back up their belief that offering an initial free service is the key to getting people on board, Spotify cites a number of its active territories that have enjoyed large reductions in piracy rates since the service’s launch.
In Sweden, a market that should be the most difficult to turn around if file-sharing traditions are any barometer, Spotify says that the number of people who pirated music fell by 25 percent between 2009 and 2011.
In Denmark the IFPI reports that 48% of users using streaming services had previously been illegal downloaders. An impressive 8 out of 10 of those have now stopped completely. Norway, a success story documented earlier this year, has seen its piracy rates drop to just one-fifth of their levels four years earlier, with streaming services taking most of the credit.
There can be little doubt that torrent sites such as The Pirate Bay will always have a following, but when services such as Spotify offer their basic services for free, one has to question why people wouldn’t at least try them. At a time when The Pirate Bay is being accused of stagnation by people including former site spokesman Peter Sunde, Spotify is not only innovating but providing a better experience.
Sure, there are arguments about whether artists are getting paid enough, or whether the major labels’ involvement in Spotify will cause it to sour in the years to come, but these aren’t the general concerns of Joe Public. All the music you can eat, for free (or at a fair price if you want tablet and mobile use), is a very good offer by anyone’s standards and something that has been needed for a long time.
Whether it will be good enough to reach the one billion users Daniel Ek hopes for remains to be seen, but Spotify is without doubt the best attempt at understanding and catering to the needs of pirates young and old there has ever been. Not surprising really, considering it was designed that way from the start.
