Study Finds Media Industries Overstate Impact Of Piracy

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Study Finds Media Industries Overstate Impact Of Piracy

piracy notice

Researchers at the London School of Economics say the music and movie industries have exaggerated the impact of piracy on their bottom line, and that in some cases it might actually help boost revenues.

I have always maintained (and always will maintain) that piracy is wrong, if only from a moral standpoint: If you want something, you should be prepared to pay for it - and if you're not willing to pay for it, then do without. But in terms of the actual damage it causes to the music and movie industries, it would appear that it's not quite as "wrong" as it appears.

A study by the London School of Economics has found that while some aspects of the movie and music industry are in decline - typically related to "old" methods of distribution - digital models have provided a significant and growing slice of revenues. Overall music industry revenues hit $60 billion in 2011 and in 2012, worldwide music sales actually grew for the first time since 1999. The report says "the drastic decline in revenues warned of by the lobby associations of record labels is not in evidence," and adds that the industry likely would have seen that growth sooner if it hadn't resisted digital expansion for so long.

"Contrary to the industry claims, the music industry is not in terminal decline but still holding ground and showing healthy profits," said Bart Cammaerts, senior lecturer in the LSE Department of Media and Communications and author of the study. "Revenues from digital sales, subscription services, streaming and live performances compensate for the decline in revenues from the sale of CDs or records."

In the movie industry, DVD sales and rentals declined by about ten percent between 2001 and 2010 but global revenues actually increased by five percent over the same period, while global box office revenues in 2012 hit $35 billion, a six percent increase over 2011. Similar things are happening in the videogame and book industries. "Although revenues from print book sales have declined, this has been offset by increases in sales of e-books, and the rate of growth is not declining despite reports lamenting the 'end of the book'," the report states.

The report argues that a "digital culture" that puts a greater value on sharing content than exclusive ownership has led to the development of new models of distribution, like Creative Commons licenses. And in some cases, online sharing of films and music can actually "generate marketing benefits" that increase revenues, noting that a consumer tracking study conducted by U.K. agency Ofcom found that file sharers spent more on content than those who stuck with legal channels.

Source: CBC

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Well, I think we can all agree that the first part of their conclusion isn't very surprising: according to the entertainment industry piracy should've bankrupted them all about three times over.

I doubt this changes much though - opinions on piracy are much to entrenched on either side for such frivolities as scientific research to make much of a dent.

Researchers continue by stating that birds sing, the sun shines, and brother, I hurt people.

edit @V "insight", unless there's someone wanting an angry mob to burn down the library to end this sharing business. Hmm...

I want everybody in this thread to hold a drink up and toast Neil Gaiman for his insight in comparing piracy to going to the library.

EDIT: Thank you, I caught it.

"You don't say!?"

This should be common sense to anyone who is at all familiar of the prevailing mentalities within the games industry.

In other news;

Water is wet
Grass is green.

When are developers going to accept that the reason their product might not sell is not piracy, but that it just plain fucking sucks, and is an overpriced piece of shit.

Still doesn't change the fact that piracy is illegal and should, therefore, be punishable.

inb4 "see, it's fine to pirate"

I'm surprised that these anti-piracy nutjobs are still so vocal about it even despite the evidence that it actually benefits them. I guess it's easier to blame bad business decisions on piracy than your own incompetence.

In other news: The Pope has a balcony and bears you-know-what in the woods.

This suprises me not one bit. The music and movie industries are just butthurt that they resisted the internet for so long that someone else came along and offered a service that they couldn't control and bleed dry in the pursuit of profits. But this study isn't going to change much, the industries have spent too much to just admit they are wrong and there is no way they will wipe out piracy without completely controlling the internet.

Yeah... but this study is all wrong! I mean WHAT?! The indusrty says they lose money from piracy it's becuase they do! Not like... from bad decisions they make on stupid DRM choices or movies launching over half a year later in some countries! I mean DUUUH! (and for those that might be a bit lost, yes ladies and gentlemen, this is a joke).

Adam Jensen:
I'm surprised that these anti-piracy nutjobs are still so vocal about it even despite the evidence that it actually benefits them. I guess it's easier to blame bad business decisions on piracy than your own incompetence.

It's not just about blame, but also about control.

I believe, that even if they would be 100% sure that allowing free downloading would be more profitable than locking out a large part of the userbase (and they would have the properly working DRM to let them choose between the two), some business leaders would STILL prefer to fight piracy.

Theoretically, corporations are only supposed to care about money. In practice, they are led by humans. Filthy rich humans, in most of our cases, who haave little practical reason to earn more oney of their own.

The only motivation why a person like Bobby Kotick or Yves Guillemot keeps waking up early in the morning and work hard, is not that he needs to, and The Bank will foreclose his house unless he makes enough green arrows point upwards on his monitor, but because he ENJOYS doing it. And most likely, what he truly enjoys is not earning more cash for his investors and for the board of directors, but playing a kind of tycoon game style enjoyment: Growing his dominance over he market, exerting power over his opponents, influencing the lives of millions of people, being relevant.

In a way, patrolling the Internet, making sure that you are having fun in the corporate-approved way, and that you tip at the money jar every time they say so, is not just the means to them earning more money, but an end for it's own sake.

Longstreet:
In other news;

Water is wet
Grass is green.

God Dammit! You ninjar'd me! Why did you ninjar me ?!?!?! You win this time but next time it will be a much different picture. Oh yes, next time . . . . .

the only suprising thing about this study to me was that it wasnt supressed in the first place

wombat_of_war:
the only suprising thing about this study to me was that it wasnt supressed in the first place

Information about piracy doesn't need much suppression, given that how it truly works is counterintuitive enough for the average Forum Warrior to do their job for them.

inb4:
" But this data would benefit the selfish justifications of pirates, therefore it must be false!"
" But stealing is stealing, that's simple, even if it doesn't actually take away things from someone's possesson, or causes financial harm!"
" Just because it's not harmful, doesn't mean that it's not wrong! You still wouldn't steal someone's car for a joyride, and then put it back without damage!"
"But even if piracy in general isn't harmful, I met a particular pirate who was indeed freeloading without paying anything, therefore I will continue to condemn "piracy" for that!"

All right, maybe I'm not giving enough credit where credit's due, the copyright industry did a pretty clver job spreading the "intellectual property" figure of speech, which is in itself largely responsible for making it counterintuitive for file-sharing to sound acceptable.

while i personally don't care about piracy its a double edged sword when the media starts crying about pirates

on one hand you have crazy prices for going to the cinema and watching movies at 12-14 pounds (or 3D at 16 or more) while being blasted by 30 minutes of adverts followed by 20 minutes of trailers 10 minutes of warnings and then finally the movie starts which it may or may not suck (looking at you die hard 5)

and then you have pirates providing a free of charge service for absolutely nothing which isn't exactly a fair trade off for those who made it considering their efforts were going to waste

mateushac:
Still doesn't change the fact that piracy is illegal and should, therefore, be punishable.

inb4 "see, it's fine to pirate"

While it seems obvious why piracy should be punished, I don't think that the fact that something is illegal means it should lead to punishment mostly because just because something is illegal it doesn't mean that its a fair law and should be illegal. Case in point, its illegal for a muslim to convert to another faith in Iran.

I think the argument you are thinking of is "just because the consequences aren't dire, doesn't mean that piracy should be legal", which is completely fair. There is a reason things with lower level consequences like jaywalking or driving without car insurance are illegal.

As for the research itself, I'm kind of confused. In academic terms, its barely a blurb and their data isn't clearly explained. At one point they talk about UK sales, in another global sales. They are ignoring a main criticism a study that looks at absolute values, especially in global sales, that if they took into consideration should have been discussed in the paper: The world population is increasing, money per capita is increasing globally, and original goods are becoming more and more available in areas where they were not before (including using digital distribution). As such, we have this basic equation; more consumers+more money per consumer+access to market goods=more revenue. This is obvious in any consumer good market. For example, the film industry is now focusing quite strongly about films shown in Chinese cinemas which was not the case 10 years ago because the rise of the Chinese middle class and movie watching patterns has been so significant.

Also, ignoring this, we are left with the example of the convenience store: Just because it is profitable does not mean that its right that it looses profit to "five finger discounts". The store should technically be making MORE money. This study doesn't look at the amount of revenue that was lost due to piracy, just an absolute number that is obviously higher today than 10 years ago. Losses from piracy might actually be quite significant while still allowing for these industries to see an increase in absolute revenue.

What, an industry that makes billions of dollars suing grandmothers and nine year old girls over copyright claims is overstating the impact of piracy on their profits? Surely, you jest! *massive sarcasm*

Is it just me or is this starting to sound like a drug debate? I mean you have people saying "look at the actual effects" and the other side saying "Yeah but it's illegal"

I also think there is an atmosphere of "well, I used to pirate when I was younger and struggling for cash but now I can afford these things its totally unforgivable to pirate, even if you're struggling for cash" ... It's a weird double standard to me.

I'll agree that piracy is damaging to the industry in SOME fashion; but I hardly believe it's such an omnipresent evil that it forces corporations and governments to double down on aggressive pro-corporate legislation. Piracy is a problem, yes, but I've always believed that it's a problem the moneymakers more than gladly exaggerate in order to postpone their own obsolescence.

In the eighties, the popular tactic was essentially "Don't use a tape deck, buy our cassettes instead!", and now it's shifted to "Don't download lossless formats off of Torrent trackers, use our vastly inferior legal download platforms! Better yet, buy a CD for which you probably don't even own a reader anymore!"

In terms of games, I'm kind of torn. I have a friend who works for A Big Company That Shall Remain Unnamed, and I occasionally pirate games his own team has developed. I used to lie about it and pretended I hadn't bought or played this or that title, until a slip of the tongue made me realize that honestly, the low-level grunts at places like EA's studios or Ubisoft Montreal don't really give a crap about how you enjoy their work. They're paid, in any case, and paid quite well. There aren't any cases of major devs downsizing because piracy negatively impacted the studio's ability to survive.

Besides, I'm more in the habit of nabbing games, waiting until the paycheck comes through, buying it legit and keeping my pirated copy's saved games. :) Pirated games have largely replaced demos for me, and most don't have than one month or two in terms of shelf life. As soon as I can afford retail and if the game is worth it, I'll gladly shell out the moolah.

Although - Steam's changed that, in recent years. A third tactic of mine involves waiting for Christmas or summer sales.

Bottom line, I'd prosecute the guy with the bloated media server who hosts his own super seedbox, but not the casual Torrent user who hasn't received so much as a single warning from his ISP.

maxben:

I think the argument you are thinking of is "just because the consequences aren't dire, doesn't mean that piracy should be legal", which is completely fair. There is a reason things with lower level consequences like jaywalking or driving without car insurance are illegal.

[...]

Also, ignoring this, we are left with the example of the convenience store: Just because it is profitable does not mean that its right that it looses profit to "five finger discounts". The store should technically be making MORE money. This study doesn't look at the amount of revenue that was lost due to piracy, just an absolute number that is obviously higher today than 10 years ago. Losses from piracy might actually be quite significant while still allowing for these industries to see an increase in absolute revenue.

The reason behind granting copyright monopolies to publishers in the first place, is to secure a reasonable level of public goods being produced.

Your analogies about jaywalking and theft, are faulty because even if on a small scale, they infringe on other people's basic human rights to safety/property. Laws should proportionally balance out people's rights between each other.

Current copyright law fails at that. It is protecting one leviathan-of-an-industry, by granting it monopolistic control over the online distribution and access to information, giving them censorship tools, and a right to interfere with millions' of peoples' daily communication and with many artistic expressions.

And for what? To make it's profits grow at an even larger rate than they already do anyways?

Theoretically, publishers could always ask for more copyright, to secure even greater profits. Stretch it from 95 to 120 years, abolish Fair Use, abolish the First Sale Doctrine. There you have it: you have fixed even more "problems" of publishers "losing" money that they could theoretically be able to earn.

And vice versa, you could shorten it to 40 years, extend Fair Use to personal file-sharing, or limit it to the actual works that are being produced, rather than general "franchises".

And publishers would "lose" money compared to what they are capable of earning.

But the real question is not whether they would "lose money" compared to a stricter monopoly system, but whether it's a good thing for society to let them earn that money in the first place, or we should let them be content with lower profits, and their already humongous size.

Yeah no shit Sherlock. The real irony for me here is that I do not pirate as I respect the artists that create media I enjoy. Sadly though for about the last 8 years I've found myself purchasing less and less of films, books, music and games. While the markets are saturated with products, there just aren't that many I find worth paying for. So it's never been piracy that keeps them from getting my money, it's due to them putting out substandard crap I don't want. I'm sure I'm not alone here.

Entitled:

maxben:

I think the argument you are thinking of is "just because the consequences aren't dire, doesn't mean that piracy should be legal", which is completely fair. There is a reason things with lower level consequences like jaywalking or driving without car insurance are illegal.

[...]

Also, ignoring this, we are left with the example of the convenience store: Just because it is profitable does not mean that its right that it looses profit to "five finger discounts". The store should technically be making MORE money. This study doesn't look at the amount of revenue that was lost due to piracy, just an absolute number that is obviously higher today than 10 years ago. Losses from piracy might actually be quite significant while still allowing for these industries to see an increase in absolute revenue.

The reason behind granting copyright monopolies to publishers in the first place, is to secure a reasonable level of public goods being produced.

Your analogies about jaywalking and theft, are faulty because even if on a small scale, they infringe on other people's basic human rights to safety/property. Laws should proportionally balance out people's rights between each other.

Current copyright law fails at that. It is protecting one leviathan-of-an-industry, by granting it monopolistic control over the online distribution and access to information, giving them censorship tools, and a right to interfere with millions' of peoples' daily communication and with many artistic expressions.

And for what? To make it's profits grow at an even larger rate than they already do anyways?

Theoretically, publishers could always ask for more copyright, to secure even greater profits. Stretch it from 95 to 120 years, abolish Fair Use, abolish the First Sale Doctrine. There you have it: you have fixed even more "problems" of publishers "losing" money that they could theoretically be able to earn.

And vice versa, you could shorten it to 40 years, extend Fair Use to personal file-sharing, or limit it to the actual works that are being produced, rather than general "franchises".

And publishers would "lose" money compared to what they are capable of earning.

But the real question is not whether they would "lose money" compared to a stricter monopoly system, but whether it's a good thing for society to let them earn that money in the first place, or we should let them be content with lower profits, and their already humongous size.

Just to be clear, I wasn't comparing piracy to jaywalking in a strong sense, just in the sense that they are both low consequence issues. In the strong sense of course they are completely different.

You also have to separate the minutia of copyright protection from piracy. The wrongdoing of these industries and copyright regimes is very very different from piracy. I do not see how you can argue that mass file sharing such as public torrenting could fall under fair use. Your arguments are in bad faith and follow a straw man fallacy.

I can answer to your arguments directly, but I want to put it up front that they have nothing to do with a piracy argument. Now that we have that out of the way:

1. There are no industry monopolies. Having monopolies on a particular product within a particular sub set of a particular industry NEVER counts as a monopoly. If I own a large piece of land and build houses on it, my control of all that land and houses does not count as a monopoly because there are other houses and land. There are other entertainment products owned by other people, you have no reason to consume that company's products if you don't want to.

2. Those who produce a product can choose to sell or not sell it as they wish. I have every right to censor a product I produce and companies regularly pull products from market or change it in some way.

3. Artistic expression means nothing if you choose to sell it to a production company. You can make videos on youtube or sell your records independently or find a producer that gives you more power over your work. Once you agree to a contract that limits your control, that is your choice and is legitimate business. Do you see companies complain after selling shares publicly that they've lost "business expression" when major shareholders exert control? Again, they had a choice to go public for the extra funding but they were not coerced to doing that.

4. We all lobby for our own best interest. That is basic freedom of expression within a democracy. Of course publishers want a stronger copyright regime, and they aim to get it. Have you ever been a part of a political movement? It is the same thing. I think the big problem is not copyright issues, but basic political issues. How much lobbying is ok? Should corporations be able to give money to politicians? Should corporations be able to use corporate money for political purposes? These are faaaaar deeper questions that go beyond entertainment industries.

5. As entrainment industries don't cause pollution, are incredibly varied (absolutely not monolithic), can be completely avoided by artists and consumers, don't cause human rights issues, etc etc I cannot see how you can say that they are significantly bad for society. I wouldn't even say that they are bad to society, but we'll use significant as in "significant enough that we should allow individuals to pirate at will" because that would require you proving that they are basically the devil.

Music sales shot up in the '90s because people re-bought their favorite albums to upgrade from cassettes and records to CDs. Once people finished upgrading, sales dropped down to pre-CD levels, and the music industry blamed piracy.

The same thing happened to movies. Sales shot up because people re-bought their favorite movies to upgrade from VHS to DVD. Once people finished upgrading, sales dropped to pre-DVD levels, and the movie industry blamed piracy.

The large companies fighting hardest get most of the money while the artists get small percentages. Also, The games industry is actively trying to screw over paying customers, so I don't care about piracy at all with them.

image

I call on the powers of the Cage to summarize my feelings regarding this research!!!

image

Entertainment sectors that continuously make record profits and show positive economic growth and ever increasing sales numbers are not being harmed by piracy? What a shocker!

NO?!

Really?

I would have NEVER guessed!

I mean, it's not like these people have been caught outright lying about piracy and pulling numbers out of the cavernous space between their buttcheeks many, MANY times before or anything.

But honestly, do we even need to hear this?

Now, if only like, some actual larger news organisations would report on this so that the common Schmoe that actually buys into their "You wouldn't download a car" bullshit could get educated.

But we all know that the chances of that happening are right up there with the sun rising in the west or the American democratic process being even barely functional

mateushac:
Still doesn't change the fact that piracy is illegal and should, therefore, be punishable.

inb4 "see, it's fine to pirate"

Its not illegal everywhere. In my country, for example, is perfectly legal, as long as I do not profit from it(like copying a music cd and then selling that copy, for example)

mateushac:
Still doesn't change the fact that piracy is illegal and should, therefore, be punishable.

inb4 "see, it's fine to pirate"

If the only reason one can accurately give why something should be punishable is "it's against the rules/law," then it shouldn't be.

As the old adage says, "When the reason of a rule ceases, so should the rule itself."

EA Exec: "Damn it! How'd we let another slip the safety net??? This information was never supposed to make it to the general public!"

Seriously, who the fuck is actually surprised by this? And I would be even less surprised if Publishers just ignored this.

Entitled:
The only motivation why a person like Bobby Kotick or Yves Guillemot keeps waking up early in the morning and work hard, is not that he needs to, and The Bank will foreclose his house unless he makes enough green arrows point upwards on his monitor, but because he ENJOYS doing it. And most likely, what he truly enjoys is not earning more cash for his investors and for the board of directors, but playing a kind of tycoon game style enjoyment: Growing his dominance over he market, exerting power over his opponents, influencing the lives of millions of people, being relevant.

In a way, patrolling the Internet, making sure that you are having fun in the corporate-approved way, and that you tip at the money jar every time they say so, is not just the means to them earning more money, but an end for it's own sake.

This person is absolutely correct.

In the nineties, it became obvious that papermakers could help protect the environment by using newfangled chemicals, instead of traditional bleaches, to whiten paper. It also became obvious that the new chemicals were cheaper than the old, environmentally-hostile, methods.

Yet they resisted change. Why?

Because environmentalists wanted it. They hated environmentalists. They were the wrong culture. So that was how it was.

You can't expect honest, decent people to come from a corrupt culture, and corporate culture is utterly corrupt.

I really do wonder why so many people on the internet hate money and those who make a lot of it. Piracy hurts, maybe not as much as they claim; but at the same time I really doubt the other side can prove how much it doesn't hurt. People don't like having to spend money on things so they acquire it without monetary sacrifice. It may be small and insignificant (I don't know, most data is skewed), but the loss is there. If you don't like it, then try to change things; bitching about it on the internet isn't going to help.

Reading threads like this makes me upset. Of course they exaggerate the effects of piracy, because they want people to give them money. That's obvious.

But I'm so tired of people defending piracy beyond that. The absolute best I can do is say "Whatever, people will do what they do." At the end of the day, people are getting a product or a service that they didn't pay for.

It's the same as walking into a movie theater without a ticket and sitting on the floor.

There's been loads of studies finding that music pirates end up spending more money on legal music and going to concerts/shows than people who don't pirate, on average.

I thought this stuff was general common knowledge by now.

Well, this sounds about right. I think there have been several who have stated as much, including our own Jim Sterling on this very site.

Anyway, I'm not surprised. But I still don't like pirating. Especially if one pirates a newer game or such. It's one thing to download a ten year old game on an emulator, that no one can find, it's another to download a brand new game.

Mind you, if you can't legally get a game, then piracy maybe your only option, and I wouldn't begrudge you for that. But I don't think one should pirate something just because they can. Just because I don't feel that is right.

On the other hand, I don't think a person who has pirated games or music should be left without a penny to their name, no matter how prolific they are. And I have heard of such a thing.

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