From the beginning, one of the key software engineers at Spotify has been Ludvig Strigeus, the creator of uTorrent, so clearly the company already knew a lot about file-sharers. In the early days the company was fairly open about its aim to provide an alternative to piracy, but perhaps one of the earliest indications of growing success came when early invites were shared among users of private torrent sites.
“People that are pirating music and not paying for it, they are the ones we want on our platform. It’s important for us to be reaching these individuals that have never paid for music before in their life, and get them onto a service that’s legal and gives money back to the rights holders,” {Spotify Australia managing director Kate} Vale said.
Of course, hardcore pirates aren’t always easily encouraged to part with their cash, so Spotify needed an equivalent to the no-cost approach of many torrent sites. That is still being achieved today via its ad-supported entry level, {General Counsel of Spotify Horacio} Gutierrez says. “I think one just has to look at data to recognize that the freemium model for online music consumption works.”
Spotify’s general counsel {also} says that the company is enjoying success, not only by bringing pirates onboard, but also by converting them to premium customers via a formula that benefits everyone in the industry.
The digital download, ushered in to the mass market more than a decade ago by Apple’s iTunes music store, is in rapid decline as people shift to streaming services such as Spotify and Apple Music.
So how much longer do downloads have? A few years and they’re dead, says Mark Mulligan, music analyst at Midia Consulting: “It’s going to die before the CD. The CD has a fairly universal player, where there’s always at least one in a house. And the people who grew up buying CDs are the older music consumers – the CD will literally die out only when they do.”
“There’s no end date … our music iTunes business is doing very well,” Eddy Cue, Apple’s senior vice-president of internet software and services, told Billboard magazine in June. “Downloads weren’t growing, and certainly are not going to grow again, but it’s not declining anywhere near as fast as any of them [in record labels] predicted. There are a lot of people who download music and are happy with it and they’re not moving towards subscriptions.”
But in the long run, streaming is the only game in town – along, perhaps, with the CD and vinyl. The download once looked like the future; now, the question is how much more of a future it has.
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