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Another Study Finds Pirates Buy More Music, Spotify Too Pricey

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Adults who download music from unofficial channels also spend £30 per year more on physical and digital music than people who don’t, according to a survey by the Demos thinktank of 1,008 people aged 16 to 50.

The study – funded by Virgin Media (NSDQ: VMED) – says a third of adults go illegal. But the additional money they spend contributes £200 million to the music economy each year.

Echoing research from the BI Norwegian School of Management, it’s the second study this year to find that link, which may discourage record label bosses but may be used by opponents of the UK government’s new graduated response policy.

Demos’ findings…

33 percent of survey respondents said they use services like BitTorrent and RapidShare.

— Of those, 26 percent say they spend either a little or a lot more music as a direct result

— 93 percent of filesharers say they have paid for music in the past year.

— But be wary: though 47 percent of filesharers buy the same amount as they used to, 19 percent either buy a little or a lot less as a result.

Virgin Media runs its own downloads-and-streaming subscription service — and, like fellow ISPs, it’s keen to avoid Lord Mandelson’s plans that would force it to bandwidth throttle and disconnect its customers. Virgin will be pleased that the research shows the revenue potential and apparent effectiveness of (reasonably priced) subscription services as a solution to piracy, but the survey skirts over the vast cost of piracy to the industry. One person who is rather more in favour of the government’s tough piracy measures is Lily Allen, who fled this debate amid a blogstorm of negative comments and accusations of hypocrisy shut down her spirited pro-copyright blog. Now Mark Rose, a producer from Deep Recording Studios picks up the debate on a new blog, titled “It’s STILL Not Alright“.

Perhaps fearing arrest at their desk, only nine percent admitted to using them to obtain music without paying (the real proportion, as indicated by previous studies, may be much higher and IFPI estimates nearly all global downloads are illegal).

More findings…

Three quarters of all adults bought some kind of music in the last year (65 percent paid for a physical CD or LP, 30 percent paid to download individual tracks and 16 percent bought an album via download).

— The average amount spent on physical music for the year, per person, was £51, compared to £24 for individual track downloads.

— Two thirds of all respondents are interested in a legitimate music downloads service, rising to 80 percent among P2P users. But current prices of most services are too high: the preferred monthly fee for a streaming service is £5 — by contrast Spotify charges £9.99 a month. For single track downloads, respondents mostly said £0.49 was the best price, which is closer to what 7digital, iTunes and others currently offer.

— What are users’ favourite legal channels? 50 percent use YouTube, 27 percent download from iTunes and Amazon’s music downloads is used by 12 percent. Nine percent use Spotify and, of those, 91 percent use the free version and – perhaps as a result – is just by just five percent.

78 percent of people agreed Spotify is easy to use, whereas just 40 percent said the same about Nokia’s music store.

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