Posted by Glen Sears | November 2, 2015 1:15 pm | No Comments
Story of the Week
That Study on Spotify Everyone’s Talking About? It’s Wrong, and That’s Not Even the Point
The working paper — a collaboration between the National Bureau of Economic Research and the Institute for Prospective Technological Studies (a division of the Europen Commission’s Joint Research Center — was written by Luis Aguiar (of IPTS) and Joel Waldfogel (of the NBER and the University of Minnesota), received a great amount of attention after an article appeared on Slate on October 30. (Because it’s a working paper, it has not been peer reviewed and hasn’t been published.) It searches for a relationship between streaming and music industry revenues by examining Spotify streams, music piracy and music sales across multiple countries.
The study was unable to differentiate between Spotify’s free and premium tiers. It’s possible free streams affect track sales differently than streams by subscribers. What’s more, it’s possible — as some labels allege — that Spotify’s unlimited free tier, supported by advertisements and meant to encourage listeners to upgrade to the premium service, discourage listeners from becoming subscribers. (Spotify would undoubtedly argue differently.)
“In other words, we don’t know which portion of any lost revenue in the sales market could be attributed to Spotify, exclusively,” Touve writes. “And yet, the… paper essentially treats the situation as if the entirety of any decrease in unit sales can be explained by adoption of Spotify alone.”
Read more on Billboard: http://bit.ly/1P6uZ8U
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