In case you had any doubt, piracy still matters.

Many people believe the age of streaming has done such a good job of providing free and legal means to access music that piracy no longer makes a major impact on an artist’s career. Our experience in promotional distribution over the last eight year has taught us the opposite is true, and the reason for this are numerous.

For starters, the royalties made off streaming services is nowhere near the kind of returns musicians (and their labels) would see from actual music sales. Of course those, be it physical album sales or digital downloads, continue to decline as use of streaming services rise. Royalty rates do seem to be improving with time, but not all genres are thriving in the digital space. Country and rock in particular are struggling, as more artists have to rethink their release strategies to match the ever-present demand for more content.

When new records don’t produce money, the ability artists (and their labels) have to promote the record declines. Everything from touring, to merchandise, advertising, and all forms general marketing require money up front. Many artists still rely on strong early sales in order to afford their next business move. When that money doesn’t come in, careers stall – some before they even really begin, and many never recover.

The belief that people who steal music and end up loving a particular release will eventually support the artist responsible has long been proven false. There is some conversion, yes, but most consumers who rely largely on piracy for access to new music rarely evolve into reliable shoppers. Most cannot be bothered to pay $10 a month for access to millions of songs via subscription streaming services, so why would they think your single, 10 or 12 track album is worth anything at all?

This brings us to the chart at the top of this post. Created from a report commissioned by UMG in 2015, the chart above reflects what many people far smarter than you or I believe would happen in a post-piracy world. This is how it works:

In the first year after piracy, consumers would be highly resistant to paying because they have a long-standing expectation of free. As time moved on, people would start to give in, and that resistance would gradually move towards greater payments in the form of premium Spotify subscriptions, increased vinyl purchases, and even download and CD buys. 

Something else that might happen: The end of ‘freemium’ service. Streaming subscription platforms like Spotify and Apple Music do not have to allow consumers trial access to their libraries. The idea of free access was a direct response to rampant piracy, offering a cost-free alternative that ultimately still helped artists get paid while maintaining the expectation that music be free. Without piracy that expectation would begin to fade, ultimately leading to increased sales across the board.

Whether or not a concrete solution to piracy exists in our immediate future is another question altogether. At Haulix we are working every day to make that dream a reality, and we’ve come a long way, but there are still more developments needed. With your help we know will get there, and from that point we will build a new music industry that is more resilient than ever.

James Shotwell

James Shotwell is the Director of Customer Engagement at Haulix and host of the company's podcast, Inside Music. He is also a public speaker known for promoting careers in the entertainment industry, as well as an entertainment journalist with over a decade of experience. His bylines include Rolling Stone, Alternative Press, Substream Magazine, Nu Sound, and Under The Gun Review, among other popular outlets.