Here's another story for the People Aren't Stupid files:
After Taylor Swift pulled her songs from Spotify (and Rdio's free tier), ostensibly to promote sales of her new album "1989," the popularity of Swift's music on YouTube skyrocketed. That's according to research Nielsen did for Mashable last week.
Mashable went on to do a back-of-the-envelope analysis comparing the royalties YouTube probably pays for streams versus what Spotify pays (the former number was based on an estimate of ad sales, the latter on what Spotify has disclosed). The conclusion was that Swift would have come out ahead had she left her tracks on Spotify, which is what I argued a few weeks ago.
Nevertheless, there are a couple of inescapable conclusions here.
The debate over which effect is bigger -- lost sales or found revenue -- is religious at this point, and it's tied closely to the (separate) questions of whether streaming royalties are large enough and properly divided among the various interests (label, artist, songwriter, producer, manager, lawyer ...). Still, the trend lines seem clear.
Data from the Recording Industry Assn. of America show that streaming revenue grew 28% from mid-2013 to mid-2014, and it made up more than a quarter of the $3.2 billion collected in the first half of the current year -- up from one-fifth in the first half of 2013. That's driven mainly by paid subscriptions to music services, which industry analysts say generate many times more dollars per user than streams do. The number of paid subscribers in the United States is growing rapidly too; it averaged 7.8 million in the first half of the year, compared with 5.5 million in the first half of 2013.