Down By Law: The Year Downloading Took a Dive

Megaupload founder Kim Dotcom (R), attending the North Shore court in Auckland on January 25 / AFP/Getty Images
Megaupload founder Kim Dotcom (R), attending the North Shore court in Auckland on January 25 / AFP/Getty Images

This year, the sale of digital downloads is expected to generate $3.9 billion in revenue, and for the next few years that total will likely continue northward, especially as older consumers who've been clutching tightly to the CDs they bought to replace their vinyl collections two decades ago finally give in. So, the demise of downloads will take some time. Even Spotify's Parks, who says his company's stated aim is to "make everybody in the world a Spotify user," isn't ready to write an obituary.

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"For some people, there's a value in actually owning the thing," argues Parks. "The future of the music business is not one-size-fits-all like it has been for the better part of a century. It used to be you had to buy a plastic thing. Then you had to buy a file. But there are going to be a lot of different revenue streams and models."

In the near term, Parks is almost certainly right. But the long-term prognosis for downloads is poor. Though many would like to sell the fiction that streaming and downloading can live side-by-side in harmony, such an assertion defies all logic. If Spotify's goal is "to have all the music in the world accessible at the speed of light," once there are no longer any gaps in wireless mobile networks, what reason would a consumer have for buying a downloaded track instead of streaming it? Stubbornness? Nostalgia for the bygone days of 2008?

As for piracy, it will always exist. Some people will never pay for music and many of them will surely get away with it, but their numbers are relatively small and getting smaller.

Even the pirate king himself seems to have detected this tectonic shift. In September, Kim Dotcom, who is currently fighting extradition to the U.S., released a teaser video for his latest venture, Megabox, which is scheduled to launch next month — with dramatic flair, no doubt — on the one-year anniversary of the commando raid that was supposed to humble him. Most of the attention has focused on the venture's updated file-sharing storage locker, which will come with extra protections to keep outsiders (law enforcement, RIAA, record labels) from looking at what is being traded, thus making it more difficult to prosecute anyone involved for copyright infringement. But the real sign of the times? Megabox is also expected to include — you guessed it — its own music-streaming service.

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