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Neil Young shows off his haul of trophies at the Juno Awards in Toronto, Ont. March 27/2011.

Neil Young is making noise again.

Last week at a tech conference in Southern California, the godfather of CanRock declared that "piracy is the new radio; it's how music gets around." Music industry types everywhere spluttered, bristling at Young's view that stealing music had become the main outlet for people to discover new music. Though Young has loudly asserted the sonic inferiority of the CD and the MP3 – even more controversially, he claimed that the late Steve Jobs preferred vinyl, and that the pair were working on bringing audiophile-quality sound to Apple devices – Young seems to have no problem with listeners discovering music via low-quality sources.

In fact, he thinks the industry itself should provide them for free, and sell the higher-quality audio he prefers to those who want it. At last year's Juno Awards, he spoke at length about his vision: "Give it to the people, so they know what the content is. And let them, if they love the music, and if they loved that new band that they never heard before, let them have a chance to buy that music at whatever quality level they decide is appropriate for them – for their pocket book and their stereo set or their earphones."

Young implied that Jobs's death derailed much-rumoured plans for a 24-bit iTunes Store. But the world he dreams of – where low-quality music is free or cheap, and higher fidelity and convenience cost money – is, in some ways, already here.

Millennials unashamedly stream free tunes on YouTube, those with a little more money, who demand better sound and availability as well as less hassle, pay for it on iTunes or on Rdio, which stream large catalogues for a fee. Even better for those on the audiophile end of the spectrum: big stars such as Radiohead and Nine Inch Nails have made recent albums available in "lossless" 16-bit formats – audio that's still less pristine than Young would like, but far higher quality than MP3s.

Young's view of illegal downloading is a touch out-of-date; in recent years, piracy has been battered. Stronger laws have helped. But so has the rise of easy-to-use legal music sites, says David Price, head of piracy intelligence for UK research firm Envisional. In Sweden and France, for example, legal assaults on piracy have greatly increased the use of iTunes and streaming services like Spotify.

Some people will always want to pirate music, Price argues, but others, once they're blocked from piracy-oriented services, may well be willing to pay. "If there's a really simple thing out there like Spotify or Pandora, one of those services that provides music for very low cost or no cost at all," he says, "then those seem to attract an awful lot of people."

Indeed, despite Young's criticism of what's available in the digital music marketplace, most consumers seem content with the current range of legal options – from tinny YouTube clips to better-sounding and more flexible paid services. Rdio CEO Drew Larner believes that the promise of fidelity by services like Rdio appeals to consumers, but so does convenience. "It's not necessarily only better fidelity," he says. "That's part of it; it's also ease of use, knowing that it's not a corrupted file or a crappy version. It's about functionality as much as fidelity."

Rdio's service provides high-quality audio depending on the speed of the user's internet connection, though even at its peak it doesn't meet Young's exacting 24-bit standard. As for audiophile-quality sound, Larner sees demand coming from a more niche audience – an older one, with more disposable income. "Younger consumers, kids, are less concerned about fidelity, and more about access and being able to listen to it when they want it, where they want it," he says. "But as those kids grow older, fidelity I think is more important."

That would reflect a long-standing trend in the market for stereo equipment, where some buyers trade up from cheap stereos and iPod docks to more serious devices as they grow older. Indeed, the recent surge in sales of high-end headphones suggests that consumers, even young ones, don't completely ignore sound quality. It's just become one of several factors in a market where accessibility and cost tug with equal intensity on our purse strings.

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