On the issue of the music streaming website Spotify and how it’s “saving the music industry”  from financial loss resulting from piracy, I have a few comments to make.
It is my opinion that Spotify does not provide sustainable returns to the industry. I own the masters and rights to all of my recordings and therefore I collect royaties that would otherwise be collected by a label (except for a small commission I pay to CDBaby, who are my digital distributors), but even so – for each Spotify “sale” (stream) I return US$0.0013. This is obviously an improvement on not receiving anything, but how much of an improvement when 1 million streams are required to make US$1300?
Some will make the argument that any exposure is good exposure for emerging artists, and that this in some way excuses the incredibly low return. The argument could be made that this business model relies on using artists unfairly to gain profits and therefore the question has to be asked – is the transaction equal? Is the exposure gained equal to the payment made? And if not (presuming that the payment is less than the value of being directly marketed to a potential purchaser), why should artists present their music in this context?
The problem is that there is an understandable and often palpable desperation amongst musical artists to turn a profit from their art in any way possible. A common theory being that the more income streams one has (broadcast and tv/film royalties, CD sales, iTunes, streaming residuals etc) the more likely you are to make a sustainable living from music and anywhere you don’t make much of a financial gain you are compensated by the old hackneyed idea that “any exposure is good exposure”. The moderating factor here is that not all investments are equal, and some will lose you money (either directly or indirectly) in the long term.
As to whether there is much of a cross over between Spotify users and those that use more traditional “purchase/download” platforms like Itunes I’m not sure, and I’m also not certain how this could be measured, but it is possible that streaming your music for free (effectively) will convince the listener to purchase your track through iTunes or similar. I think this is only ever likely to eventuate in a small number of cases (these are the free-trade style ethically minded consumer). Equally, and in my opinion more likely, accessing content on spotify could dissuade someone from purchasing the track at all because: why do they need to?
What this all boils down to is that market behaviour has been affected by the proliferation of free and easily accessible content. Where content is freely available, where is the incentive to buy? Not a new realisation.
Until the creative industries can find that incentive and promote it, it is clear that the digital battle has well and truly been lost and musicians, artists, content makers of all kinds and ironically, ultimately the consumer too – will suffer for it.