Of course, you know Justin Timberlake Sean Parker, right? Mr. Napster. I thank Sean Parker every night in my prayers for allowing me to be the cool kid in middle school with all the bitchin’ tunes. Seriously.

On the American launch day of the previously Euro-limited streaming music service Parker wrote a Facebook note that could be described as “excited.”

Absolutely beside himself with excitement, more like it.

Check out his note, in its entirety below –

My thoughts on Spotify launch…

Today represents the realization of a dream. For a decade I have waited for a music service that could rekindle my excitement about music by enabling music to be shared freely across the world — all the while empowering artists to reap the economic benefits of selling their music.

Spotify is the service I have been waiting for.

Since Napster the recorded music business has been steadily declining and, until now, there has been no light at the end of the tunnel. Today’s historic announcement marks the reversal of this downward trend and the beginning of a return to growth by the recorded music business.

Spotify promises to get people excited about music again, and the result will be a new golden age of music–more people discovering and listening to more music than ever before. Spotify is removing the barriers to sharing music with friends so that music can move freely and find its fans organically. In this hyper-efficient system great music will find its natural audience. This means that more artists will find success, more fans will discover them, and artists will make more money selling their music than they thought possible. The rusty gears of the record business will turn again.

Since Spotify takes music viral, listening to music online is finally going to be a social experience. (Just like it’s always been offline.) And by making music social the experience of discovering and listening to new music will be more fun than ever before. While Spotify can be downloaded and used or free on the desktop, users of Spotify will need to purchase content when they want to take music with them “on the go” via their iPod or iPhone. In this sense, Spotify is the answer to piracy: migrating millions of piracy-based music fans to a legitimate platform where their consumption of music can be monetized and the artists who dedicate their lives to creating music can finally get paid.

So, Parker thinks that Spotify is not only a wonderful, fun, smooth experience, but that it also the savior of the music industry. Parker also hits the point that stood out too me when I first got my hands on Spotify – the social presence. Spotify truly wants its service to be about sharing – from the integration with Facebook and Twitter to the “gifting” of songs to friends.

But is it the answer to piracy, as Parker says?

I don’t know about all that.

Check out my hands-on first look at Spotify here.

[Hat tip to Tech Crunch]

[Image Wikipedia]

But research published today by the folks at NPD Group suggests a decline in P2P music downloading since the demise of Limewire. According to NPD, Americans downloaded music via P2P client at a 16% clip in Q4 of 2007. In Q4 of 2010, when Limewire went down, that number had fallen to 9%. More statistics from the study:

The average number of music files downloaded from P2P networks also declined from 35 tracks per person in Q4 2007 to just 18 tracks in Q4 2010, although some downloaded just one or two tracks, while others took hundreds. NPD estimates there were 16 million P2P users downloading music in Q4 2010, which is 12 million fewer than in Q4 2007.

“Limewire was so popular for music file trading, and for so long, that its closure has had a powerful and immediate effect on the number of people downloading music files from peer-to-peer services and curtailed the amount being swapped,” said Russ Crupnick, entertainment industry analyst for NPD. “In the past, we’ve noted that hard-core peer-to-peer users would quickly move to other Web sites that offered illegal music file sharing. It will be interesting to see if services like Frostwire and Bittorrent take up the slack left by Limewire, or if peer-to-peer music downloaders instead move on to other modes of acquiring or listening to music.

Yeah, I’m going to go with the find other means option.

After the fall of Limewire, NPR reports an 11% rise in Frostwire use and a 4% rise in uTorrent use. These numbers seem low, especially the uTorrent rise. It might be helpful to note the information was gathered through online surveys. I’m not saying people lie, but people lie. With private tracker torrent sites like waffles.fm and what.cd popping up, people are going to feel more secure in using torrents to download music. (If you can score an invite to one of those sites)

Even with record companies suing for laughable amounts like $75 trillion, for some people that have been freely acquiring all their music since the early days of Napster, it could prove to be an impossible habit to break.

Digital music spending will reach $3.4 billion over the next five years, as CD sales will continue to decrease. "That means digital music sales will not compensate for lost CD sales in five years," said David Card, Vice President and Research Director at JupiterResearch. "Nor will they return the overall industry to growth. But digital’s where the growth is."

According to the report, music downloads will replace CDs for many-but not most-music buyers in five years. In the near future, on-demand subscription services will attract mostly niche audiences among music fans.

"The music download business will serve as an alternative, but not a replacement to CDs. As detailed in our report, there are still those consumers who prefer a tangible product," said David Schatsky, President of JupiterResearch.

"One size does not fit all when it comes to acquiring music and consumer behavior toward the variety of formats available reinforces that claim."

Tower Records recently closed its doors for good, signaling the end of an era for the brick and mortar music store. Digital music downloads continue to become the method of choice for audio aficionados, while CD sales are plummeting faster than you can say Don Imus.

Even as online sales increase, however, industry revenue continues in a pattern of overall decrease that has the major labels hanging on for their very lives. According to Enders Analysis, a British research firm, record companies have only themselves to blame for the precarious position in which they now squarely rest. 

Eric Bangeman from Ars Technica reports on the firm’s findings:

Is piracy to blame? Is DRM the solution? Enders Analysis says no, instead laying the blame for the industry’s sliding sales at the feet of the record labels. "As we analyze the industry’s core challenges… we consistently find that the industry has lost the ability to influence and control its future," reads the report’s executive summary. "Worse, the industry has often appeared caught short, and its reactions accordingly wrong-footed."

Now we’re getting into some interesting conceptual territory. The RIAA, which represents all the major labels, has focused so intently on controlling revenue streams that it has lost focus on the bigger picture of the evolving industry. As a result, the RIAA has grasped the money stream so tightly that the very future of the music industry itself has slipped through its very fingers.

Gordon Gekko would tell you that greed is good. In this case, however, it has irrevocably removed the major record labels from any sense of relevancy within the music industry.