Will Spotify build the copyright star?

Oh-o-oh, no more re-winds as the music industry begins a love-affair with streaming.

2012 was a tipping point for the music industry, when streamed music from services such as Spotify, finally demonstrated their economic potential. Indeed, the latest figures released by the British recorded music industry, otherwise known as the BPI, suggest that it is finally getting to grips with an Internet business model. So what does this mean for the future of copyright policy? Here are a few comments on the numbers, plus a review of Spotify for policy-makers.

According to the BPI figures, in 2012 digital revenues from downloads and streaming now account for over half the revenues of the recorded music industry. In the UK, a chart for streamed music has been launched. Spotify claims to have over a billion playlists registered, and is paying over €250 million in royalties.

The market for 'singles' is now almost entirely digital, and the album market is getting there, with around one third of sales being digital.

'Music discovery' is another new buzzword, as the music industry learns to work search engines for its own advantage. Social media will be the mechanism.

According to the BPI's own figures, in 2012, 'legal' downloads ( that is licenced and/or paid for) are now catching up with downloads via file-sharing sites - 239 million from sites such as iTunes in the UK in 2012, versus 345 million on the file-sharing services.

For EU policy-makers, who for the last few years have had to suffer the continual bleating of IFPI and BPI lobbyists that the Internet was bleeding them dry, the news will be welcome. The figures on streaming suggest precisely the opposite of dried-up income, indeed they indicate new veins of potential growth welling up out of the digital rocks.

And, judging by the burbling over-enthousiam for online now being shown by the BPI, I suggest they have finally recognised the power it hands them. That will be a future policy issue.

Review of Spotify for policy-makers

Spurred on by a last-minute decision to invite guests for New Years' Eve, and embarrassed by an aging collection of CDs, I decided it was time to bring my equally aged hi-fi system into the digital age. Three black Denon boxes and a pair of floor-standing Gale speakers had been as good as dead for some years.

The first requirement was to connect them with a new umbilical cord to a laptop computer. It really was so easy. Just a £5 cable from the local electronics store, that plugs into the 'aux' jack on the amplifier and the green point on the laptop.

Spotify is an online service, that offers access to music for free, or via subscription. You can either stream - listen in real time - or download and store the music on your own device.

Signing up to Spotify took a few minutes, and you don't have to pay. You have a choice between accepting advertisements, similar to commercial radio, or taking out a subscription and no ads.

The music industry of course, promotes Spotify for young music fans, attempting to wean them off the unlicenced file-sharing networks. However, I was more interested to test its back-catalogue and see what it could offer to a more mature listener. And indeed, if Mumford and Sons means nothing to you, then there is still plenty in Spotify's 15 million tracks. I think this is equally interesting for policy-makers, because it reveals how wide the online music offer can be, with the appropriate marketing effort - and therefore, why it worth keeping the pressure up on the industry to work on new business models.

Spotify is in no way just for the young people. Indeed, I think it has many attractions for a more mature audience. You can find music from any era or genre, and I gave it a range of artists to probe the depth of its catalogue. I found Carly Simon, Bryan Ferry, Suzanne Vega, Rod Stewart, Queen- even Neelie Kroes' favorite The Rolling Stones. Ok, perhaps they are all still well known, but digging deeper, I found smoe more obscure tracks, including the esoteric country singer JJ Cale, ancienne French singer Edith Piaf, and believe it or not, a rendition of Auld Lang Syne by the 1960s television singer Andy Stewart, not to mention Monty Python's infamous parrot sketch, and of course, The Buggles (remember them?) .

The first thing you have to get to grips with is the user interface. There is no A-Z of artists. To get started, you have to type the artist's name into the search box. Just enter any band or singer you like. I entered DuranDuran. Spotify then presents you with a choice of hits, albums, cover versions, and something 'playlist' or 'radio'. This is not radio as we know it, but a randomised selection of tracks that Spotify thinks relate to the artist you have chosen. I clicked on the 'radio' option and heard a reasonable selection of 1980s tracks you'd expect - Ultravox, Eurithmics, etc.

Spotify memorises the radio options so that you can go back to them as often as you like. However, I did find that this radio function is quite variable. It was not so effective for 1970's rock n'roller Suzy Quatro, where it seemed to struggle to know what is similar, but it was excellent for the post-2000 all-girl country band, Dixie Chicks, where it presents you with a never-ending stream of contemporary country music: Lucinda Williams, Keith Urban, Tim McGraw, to mention a few.

I quickly got to grips with Spotify's range of functions. You can star tracks that you like, to create a default playlist, or you can drag and drop tracks into different specialist playlists for artists or categories of music that you like.

But - there is definitely a 'but' - then I began to hit the issues that are raised in copyright policy.

There were some tracks I could not find. Pink Floyd 'Dark Side of the Moon' for one. Joan Jett and Blackhearts "I love rock n'roll'" for another (there only seemed to be a cover version, other Joan Jett tracks were available, not this one though).

The country music tracks are generally from artists who are currently recording. I did have to be persistent to find JJ Cale, and then it only came up with a limited number of tracks.

Policy-makers take note. It is likely that certain tracks are not available for copyright reasons, and this will especially apply to the vast bulk of the back-catalogue recorded in the 1960s, 70s and 80s when online licences were not even thought of.

I also noticed that in most cases, I was being offered remastered tracks, or re-recordings done in the last five or 10 years. For example, if you look for The Doors you will have to scroll down a long way to find their original recordings and compilations. The re-recordings were generally offered where the artist is still alive, such as Bryan Ferry, but I have to say that the music is not the same.

Both of these instances indicate how music industry does need to resolve the issue of online rights fast, if it is to capitalise on the good work done by Spotify.

The other issue of course, is that Spotify is not available throughout the EU, only in selected countries. It has just launched in Italy. This issue is being addressed by the Collective Rights Management directive and it is long overdue.

If the policy-makers involved spend some time with services like Spotify, they will understand the issues from the perspective of both the user and the industry. Most especially, they will realise that kicking the music industry to get its online act together, and refusing to be bullied into blocking the Internet, was the best thing they could have done.

Iptegrity does not often praise the music industry, but on this occasion, my black boxes have come back to life and I'm enjoying it.

This is an original article from Iptegrity.com. If you refer to it or to its content, you should cite my name as the author, and provide a link back to iptegrity.com. Media and Academics - please cite as Monica Horten, Will Spotify build the copyright star? in www.iptegrity.com, 23 February 2013 . Commercial users - please contact me.