According to specific reports, it appears the Swedish commercial music streaming service, Spotify may not be hurting or helping anything at all, in terms of generated revenue.
Initially launched in October 2008 by Swedish startup Spotify AB, the service provides digitally-streamed content under the formal confines in alliance with such record labels as: Warner Music Group, Sony, EMI, Universal, and BBC.
Widely recognized as the most successful innovator of its kind, Spotify houses more than 75-million active users, including the 20-million that pay for an improved-quality/commercial-free service as of June 2015.
During the course of this year alone, artists like: iconic-rapper, Jay-Z and Icelandic alternative-crooner, Bjork both removed certain albums from Spotify due to monetary and creative reasons.
Recently, economists: Luis Aguiar of the Institute for Prospective Technological Studies in Seville, Spain and the University of Minnesota’s Joel Waldfogel conducted extensive research and discovered although the popular streaming-service may not be hurting the music-industry’s revenue, it’s certainly not performing any favors either.
Observing data where countries reported a steady-rise in use of the service from 2013 to 2015 in direct contrast to areas where there was no rise, the studies indicated Spotify apparently lowers the amount of illegal-pirating on such sites as: TorrentFreak, but negatively-effects the sales of individual tracks.
Reseachers, Waldfogel and Aguiar explain the current trend the data reveals:
“Given the current industry’s revenue from track sales ($0.82 per sale) and the average payment received per stream ($0.007 per stream), our sales displacement estimates show that the losses from displaced sales are roughly outweighed by the gains in streaming revenue. In other words, our analysis shows that interactive streaming appears to be revenue-neutral for the recorded music industry.”
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