The Spotify Paradox: People Who Pay For Streaming Music Are Still Buying Albums, Report Says

Ever since streaming music services like Spotify and Pandora began making their way into our ears, some industry observers have worried that the opportunity to access music would erode fans’ interest in buying it. But new research suggests that concern may be somewhat overblown, or at least oversimplified.

A survey conducted for the Entertainment Retailers Association and the British Phonographic Industry, a trade group, finds that two-thirds of people who say they stream music also buy some form of it. The survey’s results also seem to suggest that to most people, the act of buying music is seen as a way of supporting artists, not just a means of acquiring songs they like.

“This research suggests music fans are a great deal more nuanced in their approach to new forms of technology than they are sometimes given credit for,” said Kim Bayley, the ERA’s chief executive. “They understand there are some benefits which streaming can deliver better than CD or vinyl and vice versa.”

Britain is home to the second-largest music industry in the world, and like the United States, it is dealing with a systemic decline in physical album sales. That slide began with the rise of file-sharing and continued as it became easier to buy music in digital formats.

Today, more than half of the British music industry’s revenue comes from digital sources, and while a healthy percentage of the population continues to buy music sold in physical formats, many people have moved on. The BPI report found that more than three-quarters of people who pay to stream music said they held onto their CD collections purely for decorative purposes.

Yet among those who do still buy, streaming performs a key role. Like radio before it, streaming has become a tool for discovering new music and an added method of consumption. Forty-nine percent of the survey’s respondents said that, in addition to listening to free streams, they also buy CDs, and another healthy chunk, 44 percent, say they listen to free streams and pay for song or album downloads as well.

And those who do both use streaming to expand their collections. A full 69 percent of respondents said that when they discover something they love through a streaming service, they like to go out and buy it in some form or other. Interestingly, an even higher percentage of people that pay for a streaming service said they do the same thing, primarily because doing so supports artists.

While there is a generational element at work here -- the age groups that most like to buy music after discovering it via streams are 25-34 and 35-44 (tied at 80 percent), followed closely by those 45-54 (76 percent) -- the youngest age cohort surveyed, those 16-24, also agreed for the most part; 68 percent said they liked to buy music after discovering it via stream.

Interestingly, the survey results did not include any questions about piracy, one of the U.K. music business’s biggest areas of concern. A majority of British millennials gets some portion of the music, film and television they consume via file-sharing services, according to research published this summer by the national Copyright Office. There have been a number of reports published which suggest that consumers who pirate music, film and television also spend more than average purchasing it as well.

The study’s results were based on a survey of 1,000 adult music listeners in the U.K. with internet access.