Adventures in the Netherlands - Final
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Adventures inthe Netherlands
Spotify, Piracy and the new Dutch experience
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Adventures in the Netherlands
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Adventures in the Netherlands
Spotify, Piracy and the new Dutch experience
Spotify was founded in 2006 to provide a superior legal alternative to piracy. Yetdespite launching in 28 markets and acquiring 24 million active users, there has beenlittle recent research on the impact Spotify has had on piracy. Until now.The Swedish success story is well known: in 2012, their music industry grew by almost20 percent. Here we’re turning our attention to the recent success of Spotify in theNetherlands, helping us establish new insights on an old debate.Not only has the number of people engaging in music piracy in the Netherlands fallenin recent times, but new Long Tail insights reveal that 29% of the 1.8m Dutch BitTorrentpirates took just 1 file in 2012 while the top 10% took over half of the content.A second insight from this work comes from examining the impact of holdoutstrategies on sales and illegal torrent volumes. We found that artists who delayed theirrelease on Spotify su
ered higher levels of piracy than those who did not.The Netherlands o
ers positive signs: piracy overall is now lower, and artists thatengage with Spotify see less piracy. To give these insights context, we compare theNetherlands with Spotify’s new market, Italy, where piracy is mainstream.
Will Page, Director of Economics @ Spotify
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Adventures in the Netherlands
Summarify
When Spotify was founded in 2006, one of the original goals was to beat piracy at itsown game and o
er the music consumer a superior and legal alternative.The last published study on the relationship between Spotify and piracy was in 2011,when an industry report stated that piracy in Sweden had fallen by 25%.Looking beyond Sweden and to bring the debate up to date, in this report we focus onSpotify’s recent success in the Netherlands. What does piracy look like there, now?Working with analytics company Musicmetric, we are able to understand how regularlypeople use BitTorrent for music piracy and how levels of piracy di
er from one artist tothe next.Not only has the number of people engaging in music piracy in the Netherlands fallen inrecent times, it also appears to be an infrequent activity for most of those who remain.There were 6.8m residential broadband connections in the Netherlands in 2012
BitTorrent music piracy occurred on 1.8m unique IPs in 2012, around a quarter of the total
Of that 1.8m, a large passive group of 532,000 (29%) downloaded just one music file
A minority of 188,000 (10%) ‘hardcore’ pirates downloaded 16 files or more
This Long Tail distribution is an important insight, as it highlights that most people takevery little. Meanwhile, the top 10% take over half of the content.To further understand this distribution and infrequent use of BitTorrent in a countrywhere Spotify is popular, we investigated the impact of ‘artist holdout’ (delayed release)strategies on sales, streams and illegal torrents.At one end of the spectrum, take two releases that appeared on Spotify at the sametime as iTunes and other sales channels: One Direction’s album Take Me Home andRobbie Williams’ single Candy. Both were successful on Spotify and sold 4 copies perBitTorrent download.At the other end of the spectrum, Spotify holdouts su
ered higher levels of piracy:Rihanna’s Unapologetic and Taylor Swift’s Red sold only 1 copy per BitTorrent download.Unexpectedly, another driver of BitTorrent activity was festivals. Artists like Racoon andGers Pardoel saw illegal download spikes immediately after festival performances.These insights will help Spotify continue to reduce piracy in the Netherlands. To showhow that game will play out elsewhere, we turn to Italy, where Spotify has recentlylaunched.
Summarify continued overleaf....
