With efforts to fight music piracy seen as largely successful, at least one music trade group executive is saying out loud what others in the industry have only dared whisper - the real problem keeping artists and labels from earning more from music isn't stream-ripping, it is the free music offered by Spotify and YouTube.
Until recently, Italy was a hotbed of music piracy. New laws and new efforts have changed that, with visits to pirate sites decreasing more than 35% between 2018 and 2019.
Now, however, almost 90% of Italian music consumers use YouTube or Spotify to stream music for free.
“The main issue here is not piracy. It’s how to convert people from free YouTube and Spotify accounts to premium services,” Enzo Mazza, chief at Italian music industry group FIMI told Torrentfreak. ”Italy is a country where the ‘culture of free’ is radicated and it’s not easy to drag people into a subscription model.”
“Conversion rates are still below the global average and this is a major challenge for the industry," says Mazza. Ad-supported music streaming pays rightsholders a small fraction of the per-stream rates that paid from Premium subscriptions.
A Problem Likely To Get Worse
It's a scenario likely to play out in country after country, as Spotify moves into more countries with struggling economies and lower per capita income. Music fans move from piracy to streaming services, but few become paid subscribers. And while the price of a Premium music subscription in Italy mirrors the rest of Europe, in developing countries in Asia, Africa and South America, premium subscriptions cost 70-75% less than in the US and Europe.
"We are urging in particular Spotify to do more in terms of promotional campaigns in order to engage new premium customers,” says Mazza.