Windowing is doing more harm than good, suggests a new paper by Will Page, director of economics at Spotify and former chief economist at PRS for Music. His research supports a position Spotify has been championing for a while now, and Page makes a strong case.?
In “Adventures in the Netherlands: Spotify, Piracy and the New Dutch Experience,” Page looks at two factors that impact subscription services: piracy and windowing, the act of holding back a new release from some digital services. Piracy is a well-known scourge and something legal services like Spotify are meant to combat. Windowing is occasionally employed to entice purchases from fans who would otherwise stream.
?The Netherlands, the world’s 10th-largest recorded-music market, is typical in that many of its citizens engage in digital piracy. In 2012, just 10% of file-sharers took 52% of files, and 22% took another 28%, according to BitTorrent activity measured by Musicmetric. The remaining 68% of BitTorrent users accounted for just 20% of activity.
?“Adventures” argues that the controversial practice of windowing encourages piracy without helping sales. Page looked at 14 pop acts with a range of release strategies. The two albums with the best sales-to-piracy ratio, One Direction’s “Take Me Home” and Robbie Williams’ “Take the Crown,” had normal releases — no windowing — and were streamed heavily on Spotify. But the two albums with the worst sales-to-piracy ratios, Taylor Swift’s “Red” and Rihanna’s “Unapologetic,” had windowed releases.
?The deeper implication is that lone wolves might be harmful. A few windowed releases by self-interested individuals could make fans retreat to illegal services. In an effort to generate more sales — which Page argues won’t happen — these lone wolves may hurt the collective industry. And just making music available won’t solve the problem. Page found that two artists’ illegal downloads — but not sales or Spotify streams — spiked after they performed at the Stöppelhaene festival last year. Fans who wanted immediate gratification went to their preferred illegal venue rather than a legal one like Spotify. ?
But there’s good news: Piracy fell in spite of the consumer-unfriendly issues of windowing and catalog holes. Numbers from various sources indicate the amount of active pirates in the Netherlands has declined to 1.8 million in 2012 from between 4.3 and 5 million in 2008. Subscription services have been both imperfect and adequate alternatives to piracy. ?
The fact that Spotify has released what’s effectively a position paper may raise some eyebrows or detract from its conclusions, because the paper’s deductions clearly benefit Spotify. But Page strove for objectivity by collaborating with independent analysts and submitting the paper for peer review. And he admits its BitTorrent data can be less than perfect.
?“Adventures” makes a good case that piracy will be less problematic, and digital growth stronger, if music is simply made available to fans.