How Does Piracy Affect the Music Industry?

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Piracy negatively impacts the music industry through the loss of album sales, but it seems to increase the success and cost of live concert performances for popular bands. Musicians have also become more creative about ways to license their music rights through corporate deals and partnerships. Stuart Dredge from The Guardian explains that some artists lose sales when their early releases are leaked online.

The music industry often complains that piracy has a crippling effect on its revenues, but CBC News states that economists disagree with this claim, calling it an exaggeration. The popularity of radio streaming sites, such as Pandora and Slacker, have helped the music industry benefit from the prevalence of online use. According to Geoff Duncan from Digital Trends, these sites still appeal to users who demand free music and would otherwise contribute to online piracy because they allow people to listen to a "station" or genre based on their musical preferences without the need to pay any fees. The online radio sites profit from this model by obtaining advertising revenue and charging a monthly fee to users who do not wish to be exposed to corporate promotions. The music industry profits from this model through the royalties that the online radio memberships pay back to them.