Better products can help reduce digital piracy. That's one of the takeaways in the paper, "Adventures in the Netherlands," released by Spotify on Wednesday.
A long-held belief has been that legal services need to be more convenient and innovative than the illegal alternatives for piracy to be effectively fought. A chart in Spotify’s paper suggests one specific way innovation can reduce piracy: smartphone apps for live events.

Much of the paper is focused on how the benefits of engagement. Will Page, director of economics at Spotify, looked at streaming and BitTorrent data provided by MusicMetric and concluded new albums not made available to Spotify exhibited more piracy and fewer sales than albums released simultaneously to Spotify and retail. The takeaway: legal options help reduce piracy.

But consumers aren't opting for a legal option in every scenario. Page found that concert-goers illegally downloaded music of recently seen artists even though legal alternatives existed. BitTorrent downloads of Gers Pardoel and Racoon spiked after the artists played at a Swedish music festival in August 2012. Sales and Spotify streams of the artists’ music showed no change after the performances, however.

Innovation can help solve this problem. A smartphone app that knows what concerts and festivals the user attends and what artists are seen could automatically create a playlist with those artists’ music. It’s a sensible solution for alcohol-soaked festivals (think of how many bands the typical person sees perform at SXSW).
Developers have already come up with this idea. An app called Concert Playlist Generator was created at the Rethink Music Hacker's Weekend in April 2012. The app, not yet released, supposedly creates a playlist based on the concerts a person plans to attend.
Some people probably use illegal download services out of habit. Legal services, and the apps that complement them, need to be good enough to change consumer behavior.