I'll add to this as well, since it's a comment I see a lot.

I'm not convinced that people would be willing to go back to Piracy. I think the convenience of being able to listen to any song at any time immediately without having to connect your iPhone to your PC, drag the file over, get them recognised, maybe add some metadata. (I know there'll be more modern approaches to this. I don't think they'll be quite as easy as Spotify)

That's not even mentioning music discovery. Most of my music is now from Discover Weekly.