Lawyers usually aren’t known for their honesty or ethical standards, but in Spotify’s case, that might not be the case.
According to a top Spotify lawyer, the online music service might be built from the ground up to attract pirates. And through no fault of its own.
Readers should know that Spotify is widely recognized as one of the most well known and well used online music platforms in the world.
For pirates though, that fact doesn’t matter much. As far as pirates and piracy websites are concerned, Spotify ranks high on the list of online services that are highly vulnerable to piracy and gets pirated more often than any other online service.
Not only that, but various media reports have also shown that Spotify is equally popular among pirates and former pirates.
Horacio, Gutierrez, who is currently the General Counsel of Spotify, in an interview given to a certain media outlet recently said that piracy had become quite a big issue and the company, Spotify, was now starting to take concrete steps in order to tackle the problem of piracy.
He also said that stopping piracy was one of the primary and key goals of the company going into the new year.
Moreover, he explained that through no fault of Spotify (or any of its staff presumably) it seemed that attracting pirates was something that was built right into the company’s DNA.
Spotify came into the online world with a radically different model of distributing music to users who wanted to hear it, about eight years ago.
Back then, few thought that the company would survive as long as it has survived. Not only that, even fewer could have imagined that the online music service would actually go on and grow at the rate it is currently at the moment.
Some critics even questioned whether such as service could attract any customers since everything an online user could ever want to hear was freely available (along with TV series, movies, documentaries, cartoons, anime, short films and every other imaginable content type) on the internet in the form of piracy websites.
It is also true that some hoped that Spotify would go on and become a genuine alternative to internet piracy as far as music was concerned.
There is little doubt that the creators of Spotify had already identified the problem of piracy websites and pirates who would jump at each given opportunity and upload copyrighted content on piracy websites without permission from the creators of that copyrighted content and that too for free, for everyone to download and enjoy.
Why do we say that?
It is because of Ludvig Strigeus.
Who is he?
Ludvig Strigeus has been with Spotify right from the beginning and has contributed to the company as one of the key software engineers.
He is also the creator of uTorrent. The platform almost all pirates use to upload files to piracy websites and almost all pirates use to download stuff from piracy websites. For free, and without permission and no repercussions.
In other words, Spotify hired the creator of a website that did exactly what the company did not want happening i.e piracy.
So why did Spotify hire such a guy in the first place?
Well, first, it always helps to have someone from the other side. With Ludvig Strigeus working at Spotify, the people behind Spotify had clearly hired a guy who knew a lot about file sharing, file-sharers, and piracy.
Experienced readers may also know that Spotify was very clear about its policy of being an alternative to piracy.
To put it another way, Spotify never hid the fact that the online music service came into being so that people could listen to what they wanted to without violating the rights of producers, artists, directors and the like.
Perhaps the most interesting part of the whole situation is that the Spotify was able to put up numbers, rather early in its life cycle, that showed the company growing at a rapid pace and could be termed as successful.
Strangely enough, Spotify gave some of the earliest invites to users who accessed content via private torrent sites.
Perhaps, the company wanted online users to really experience what it was like to listen to your favorite content without taking part in piracy and indirectly supporting the people who brought them their favorite piece of content.
Fast forward to today and Spotify is indeed a huge online music service. As of this moment, the online music service is considered as one of the most visited sites in the world regardless of industry.
A quick search on sites like Alexa or SimilarWeb shows that Spotify has an estimated 100 million user base today.
Most of the users who access Spotify to avail its services do so with a free account that is supported by Spotify through advertisements.
The free account acts as a kind of gateway for most of the subscribers who access Spotify.
The ad-supported free tier basically helps millions of pirates along with former pirates to share their favorite piece of content.
This isn’t to suggest that pirates have stopped uploading copyrighted music content onto piracy websites. Pirates usually use Spotify to augment their sharing and hence are able to reach out to an even wider audience.
Does Spotify Hire Pirates?
The short answer is yes.
The long answer is a bit more complicated.
Anyone who follows any media outlet in the online world knows that Spotify has never tried to hide the fact that the company actively looks for pirates to hire so that it can bring in more experience to its service.
Kate Vale, Spotify Australia managing director, said in an interview that was conducted in 2014 that it was one of the company’s main objectives.
Vale further explained that people that were pirating music and not paying for it were exactly the kind of people that Spotify wanted on their platform.
Furthermore, he said, it was important for the people working at Spotify to reach out to these individuals who had never paid for music before in their life and then get them onto an online service that was legal and gave money back to the rights holders.
That was then. Now, the General Counsel of Spotify Horacio Gutierrez has given another new interview to The Journal of Sports and Entertainment Law, in which he revealed just how serious Spotify was in terms of stopping people from going to piracy websites for their music needs.
Hix explaining essentially showed that the philosophy of making people pay for their music and/or any other form of online copyrighted content and support the artists, producers, and directors along with publishers behind them, ran deep into the company.
Horacio went one step further and said that these ideas were not only important to the company but also absolutely fundamental to Spotify’s existence.
He further explained that one of the things that inspired the creation of Spotify and was part of the DNA of the company from the day the company was launched was addressing one of the biggest questions that everyone in the music industry had at the time.
That question was how would one tackle and then combat online piracy in the music industry.
As mentioned before, the online music service, Spotify, was launched for the first time about eight years ago. It seems that Gutierrez feels that the company has made giant strides in a relatively short amount of time compared to other companies in other industries who still have not managed to convert their customers from piracy websites users to paying subscribers.
Gutierrez pointed out that Spotify was determined from the very beginning to provide a fully licensed, legal alternative for online music consumption that people would prefer over piracy.
One could legitimately ask the question, how did Spotify convince itself that its model of a paid online music service could work let alone this quickly?
Well, the least that can be said about that is: the signs that a service like Spotify could not only keep itself alive but also expand and make money were positive from the very beginning.
One of those signs which communicated to the people working at Spotify that people could be convinced to pay for their music was when, after just a few months of its official launch, users of a specific torrent site commended Spotify for the quality of its service.
That specific music site was What.cd, which at the time wasn’t the world’s greatest music torrent site, which it is today.
A what.cd user said this in, as early as, 2008, “Honestly it is going to be huge.”
The users then continued and further said that he had been browsing and playing from Spotify’s seemingly endless music catalog all afternoon, it loads as if it is playing from local files, so fast and so easy.
He then said that if it was this great in such early beta stages then he couldn’t imagine where this online music service was going and he felt like buying another laptop to have permanently rigged.
Now, this is the story of just one former pirate. For all anyone knows, this particular user could still be downloading copyrighted content from piracy websites with paying a single dollar.
He might also be using Spotify simultaneously with uTorrent and other such software application.
The point is, it is not always this easy or this quick to persuade pirates, especially hardcore ones, to give up their lifelong habit of just popping up a file’s name into the search bar of a piracy website and bam, after just a few seconds, playing all the music files they could ever listen to and that too for free.
Of course, Spotify knew that from the start. And credit should be given where it is due. Spotify showed tremendous courage in staying true to its model of making people pay for its music. Nevertheless, whether people should pay for music is an entirely separate debate which will be discussed in a future post.
Regardless, pirates don’t like to pay for stuff which is freely available for download online. In other words, if Spotify was to survive as an online service, the people working for it had to find a way to convince people to pay for their music by bringing in an alternative model which would be effectively equivalent to someone downloading a desired music file straight from a piracy site without paying.
Piracy websites, also known as torrent sites, provide users a hassle free way of downloading their favorite piece of content from the internet without much trouble, or even a simple sign up. Spotify too had to provide a no-cost package which would attract customers who did not want to pay for music but still could be persuaded to use legal means of consuming it.
Needless to say, Spotify did indeed find a lot of success in convincing people to first listen to music on its platform without charge and then eventually, if they wanted to, pay for that same music.
As mentioned earlier in the article as well, Gutierrez believes that Spotify is still achieving that goal today through its ad-supported packages which are, in a sense, entry level subscriptions at those users who don’t want to pay for music they listen to but are courteous enough to do it the legal way.
In a recent interview Gutierrez said that he thought one just had to look at the relevant data to recognize that the freemium model for online music consumption worked and Spotify had figured out how to make customers pay, eventually, with its free tier system which was the key to attracting users away from online piracy.
He also said that the success Spotify has experienced since its birth is proof that the model worked.
He also said that the staff at Spotify had data around the world that showed that it worked and that in fact the people behind Spotify were now making inroads against piracy because the company offered an ability for those users to have a better experience with higher quality content, variety richer catalogue, and a number of other user-minded features that made the Spotify experience much better for the user.
He concluded his talk by commenting that if anyone looked at what had happened since the launch of the Spotify service, the people behind the company had been incredibly successful on that score and figures coming out of the music industry showed that after 15 years of revenue losses in the music industry, the music industry was once again growing thanks to music streaming services such as Spotify.