Income To Be Made From Music Streaming Says New Study
June 3, 2013

Income To Be Made From Music Streaming Says New Study

Peter Suciu for — Your Universe Online

While the issue of ownership and intellectual property rights remains a hot button issue in the music industry; a new study suggests that the total incomes of music composers have increased significantly over the last 15 years, despite the file sharing revolution.

The issue of music downloads was so controversial that artists such as Metallica filed a lawsuit against digital music pioneer service Napster in 2000. The suit, which the heavy metal band had filed in U.S. District Court more than a decade ago, alleged that Napster was committing copyright infringement and unlawful use of a digital audio interface device. The band further alleged that Napster violated the Racketeering Influenced & Corrupt Organizations Act (RICO).

In the end, Napster was forced to change its business model, and sharing services essentially moved to the shadows. In that time, various services have legitimized music downloads, with iTunes being one of the most notable examples. More importantly, the advent of music streaming services has helped create a new platform that actually has helped increase revenues.

These are the findings of a doctoral thesis, titled “Nothing New under the Sun — Essays on the Economic History of Intellectual Property Rights in Music” from the School of Business, Economics and Law, University of Gothenburg, which shows that the total incomes of music composers have increased significantly in the last 15 years.

“In 2011 their income from music streaming increased by 70 percent from the year before, and today downloads are generating more income than CD sales,” said Staffan Albinsson, a researcher in economic history and author of the thesis.

The study looked specifically at Swedish statistics from 1980-2009, and its authors concluded that the music industry´s claim in the debate is true — namely that it had lost revenue due to illicit downloading. However, the study found that the composers of the music have also seen their income increase substantially over the same period through increased revenues from concerts, radio and TV. Moreover, these revenues from music streaming have grown rapidly since 2010.

Innovations such as Spotify and other music streaming services have helped tone the debate, while also being embraced by the music industry. Such notable companies as Google have looked to challenge Spotify and Pandora in the music streaming category.

“The consumer can access a lot of material without breaking the law, and the rights holders are getting paid. There is no need for a discussion until next time new technology is introduced,” Albinsson added.

He further noted that technology has typically not been embraced as soon as it appears and that there has long been concern that it could lead to lost revenue. He pointed to the printing press, the gramophone, radio and cassette tapes as good examples of past technological innovations that have sparked debate about intellectual property rights when they made their respective debuts.

However, Albinsson believes this debate goes further than just music, and said that he hopes more attention will be given to the qualitative implications of intellectual property laws.

“I´m convinced that different forms of intellectual property rights have different qualitative implications,” he added. “The most illegally downloaded music is probably also the most expensive music to produce, and if the high costs cannot be recovered, this music won't be there to enjoy.”