Whether they are or not depends on where the new users of free streaming websites come from. If Spotify and Vevo are drawing people away from the CD racks and the iTunes store, they are undermining the industry. If, on the other hand, people are streaming music online rather than downloading it illegally from a BitTorrent site, the industry gains. It has converted a user who is worth nothing to someone who is worth a little. And the pool of pirates is so huge at present (IFPI, an international trade group, reckons that 19 out of every 20 tracks downloaded are illegal) that it ought to be possible to make serious money from persuading people to make the switch. The growth of legitimate streaming services has driven overall revenues up in South Korea and Sweden.
The possibility that music-streaming websites will turn CD buyers into freeloaders is a concern only in countries where people still buy music. That is not the case everywhere. Rampant piracy means just $19m-worth of CDs were sold in China last year--about the same as in Hungary. In such countries it makes sense to give away music, surrounding and interspersing it with advertisements. Websites like Top100.cn and Google are doing that. Record labels have also licensed music to Nokia, which bundles it into the price of its mobile phones.
The proliferation of FM radio and multichannel television in emerging markets is also driving revenues from copyrights. At the same time, restaurants and clubs are being strong-armed into paying for the music they play. CISAC, an umbrella organisation for collection societies, has reported steady or rising receipts in the past decade (see chart 2 on the previous page). But there is still a long way to go before collections reach European levels in emerging markets or elsewhere in the rich world. In America, for example, radio stations do not pay performance rights, although there have been legislative efforts to change that.
Rising income from live performance, merchandising, sponsorship, publishing, online streaming and emerging markets has come to counterbalance losses from declining CD sales. As a result, some musicians are singing a different tune. Last year a new group, the Featured Artists Coalition, objected to government plans to punish file-sharers by suspending their broadband connections. Its leaders, including established artists such as Billy Bragg and Annie Lennox, argue that file-sharing is a useful form of promotion. But not everybody agrees.
The sharpest rebuke came from Lily Allen, a songwriter and pop singer who was then 24 years old. File-sharing was fine for long-in-the-tooth bands that "do sell-out arena tours and have the biggest Ferrari collections in the world", she noted. But for new acts it is a calamity. As revenues dry up, record companies are becoming unwilling to invest in young artists, apart from those who have built an audience by winning talent shows on television.
Ms Allen's intervention went down badly with the digital libertarians who dominate discussion of file-sharing on the internet. She was nonetheless right--and she could have gone further. Music piracy is fundamentally a generational issue. Polls have consistently shown that teenagers and young adults are the most likely to acquire music online illegally. They naturally prefer music made by people of their own age (such as Ms Allen), who write about the sort of things they experience. So the young steal from the young, while middle-aged fans continue to buy CDs put out by middle-aged musicians.
In a sense, the recorded-music market is not so much dying as greying. In 2002 people aged 12 to 19 accounted for 16.4% of all spending on albums in
