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Ars Examines Outlandish "Lost To Piracy" Claims and Figures

Nom du Keyboard writes "For years the figures of $200 billion and 750,000 jobs lost to intellectual property piracy have been bandied about, usually as a cudgel to demand ever more overbearing copyright laws with the intent of diminishing of both Fair Use and the Public Domain. Now ARS Technica takes a look into origin and validity these figures and finds far less than the proponents of them might wish."

27 of 380 comments (clear)

  1. Anyone else find it humorous... by pwnies · · Score: 5, Insightful

    ...that the people who wouldn't have jobs if there was no piracy are the same people who discovered these numbers?

  2. Actual losses are zero by Kethinov · · Score: 4, Insightful

    As I've said before, the actual losses are zero. An opportunity cost only exists when an opportunity exists in the first place. Nobody is crying foul that horse and buggy makers are out thousands of jobs and dollars due to the advent of cars.

    To content industry: the advent of the internet results in consumer p2p. It cannot be stopped. Deal with it. Do so by competing against it, not legislating against it.

    --
    You're right, I wouldn't steal a car. But if it were possible, I sure as hell would download one!
  3. Scary, really by Max+Romantschuk · · Score: 3, Insightful

    Read TFA a few days ago... It's actually quite scary that lobbyists can throw around completely made up figures which convince lawmakers that we need law X for problem Y. There should be some kind of accountability for quoting random numbers...

    --
    .: Max Romantschuk :: http://max.romantschuk.fi/
    1. Re:Scary, really by whisper_jeff · · Score: 3, Insightful

      I would think that there _is_ a punishment for lying to Congress... Now, if Congress would just call them on the lies...

  4. so? by nomadic · · Score: 4, Insightful

    We all knew this; having a geek site say it doesn't mean much. Now, if the New York Times did an analysis and came up with the same information, and published it, that would actually be news.

    1. Re:so? by gnick · · Score: 4, Insightful

      What makes you think that the NYT has more credibility than Ars? Personally, I see it the other way around: I'm far less prone to double-checking Ars figures than NYT figures. That's because when I did so in the past, Ars figures were a lot more accurate than NYT figures - at least when it came to tech issues.

      It's not about credibility - It's about mass acceptance. You may trust Ars more than the NYT, but like nomadic said - We all knew those numbers were garbage. I can't point my mom to Ars and convince her of anything, but NYT, CNN, MSN, etc would all work just fine. And, despite your "MSM hasn't been mainstream in about 2 years" assertion, I'll need a citation before I believe that the bulk of Americans are getting their news or placing their trust more in blogs/talk shows rather than "mainstream" news outlets.

      Won't somebody think of Joe Six-pack?!?

      --
      He's getting rather old, but he's a good mouse.
  5. Re:"Lost" to piracy by bonch · · Score: 3, Insightful

    You're losing sales. That's pretty valuable to somebody trying to make a living off of it.

    Besides, when has the Slashdot community ever avoided using the phrase "stolen GPL code" even though you can't steal code? People seem to split hairs only when it suits their agendas...

  6. bad analogy by nomadic · · Score: 5, Insightful

    Your analogy completely breaks down; buggy whip manufacturers went out business because demand vanished. Here, demand isn't vanishing.

    1. Re:bad analogy by nomadic · · Score: 5, Insightful

      Wrong: the demand is vanishing. The astounding rise in consumer p2p reduces the demand for the physical CD, DVD, pay-for download, etc.

      People don't demand the physical CD, DVD, etc., they demand the content. How that content is delivered is secondary.

    2. Re:bad analogy by mcgrew · · Score: 4, Insightful

      That's also where the would-be bit salesmen are full of it, too. The music industry has lost sales to independant labels and artists (most of whom WANT their work shared and use P2P to its full advantage), lost sales due to a prolonged and severe boycott of their wares, yet blame any downturn in sales to copyright infringement.

      They count each unpaid-for download as a lost sale, when in fact the vast, vast majority of these would NOT be sales even if copyright infringement were impossible. Peg Leg Pete downloads Madonna's "Lying Dickweeds", finds out it's utter dreck, and deletes it. Madonna's label screams "foul" and says a sale has been lost. College junior Blackbeard (who tries to make ends meet tending bar at night) downloads a copy of Photoshop that he could never afford, and Adobe counts it as a lost sale.

      In short, everyone bandying these numbers around are bald faced liars.

    3. Re:bad analogy by Free+the+Cowards · · Score: 5, Insightful

      Actually, basic economics will tell you that the quantity of something which is obtained for free has no bearing on the demand for a product. "Demand" means the shape of the whole curve, and that curve necessarily spikes far upward at the point where price reaches zero. That people download like crazy for free tells you absolutely nothing about what they would be doing if they had no choice but to pay money.

      --
      If you mod me Overrated, you are admitting that you have no penis.
    4. Re:bad analogy by Rogerborg · · Score: 3, Insightful

      People didn't stop demanding getting from A to B either. How that goal was delivered - by buggy or by horseless carriage - was not secondary.

      --
      If you were blocking sigs, you wouldn't have to read this.
    5. Re:bad analogy by Free+the+Cowards · · Score: 3, Insightful

      Ah, but we can both be right.

      Does piracy hurt demand? Most likely.

      But would demand be higher, lower, or the same if piracy were somehow eliminated?

      That is hard to say. My guess from what I know (and I realize this is just a guess) is that demand would still be going down even in the absence of piracy. That is to say, while piracy may be responsible for some losses, the industry would still be hurting even if it were not happening.

      In any case, I think that the debate is irrelevant. You can no more stop your products from being pirated than you can stop your buildings from being rained on. If your roof leaks then you must fix the roof, not stop the rain. Likewise, businesses which are built on selling copyrighted material must come to terms with piracy and figure out ways to make money despite it. This is not really a good thing for us (I make my money in this area too!) but there's simply no way to make it stop.

      --
      If you mod me Overrated, you are admitting that you have no penis.
  7. What about... by speroni · · Score: 3, Insightful

    all the jobs created by piracy? There's been how many software jobs created to come up with new anti-piracy software, DRM and the like. How many law suits have been thrown around bloating the salaries of overpaid lawyers and their ilk. Whole corporations such as the RIAA have been created to combat the travesties of pirates on the high webs.

    How many jobs have been created due to the piracy itself. Napster has its roots in file sharing, if not for this company the likes of iTunes would not likely exist. Thepiratebay while not a piracy company would not be what it is right now with out some pirated content.

    On the flip side of all of this imagine what the media would be like if artists did it for the art and not for the money. Movies such as Indiana Jones and the Crystal skull wouldn't exist. Aliens, wtf? Thats the kind of "art" that comes out of focus groups and market testing.

    --
    Eschew Obfuscation
  8. What Kills Me is... by whisper_jeff · · Score: 5, Insightful

    What really kills me is not that the RIAA and MPAA lied (*gasp*) but by how much they've lied. The numbers they quote aren't even vaguely believable. Even if one fudges some numbers and gets creative with accounting/HR tracking, the numbers are still off by several orders of magnitude. I can understand them fudging numbers (applying lost sales from a downturn in the economy to piracy, for example), but these numbers aren't even close to that. Not by the longest of long shots. As the article says, $200 billion is more than the movie and music industry combined. Are they really claiming they've lost more to piracy than they made? Are they really claiming that 7% of the unemployed are from their industries? Because that's what their numbers are saying...

  9. Money lost to piracy by Enderandrew · · Score: 5, Insightful

    Why do people have to be so black-and-white on this issue? Pirates think everything should be free and argue like they're entitled to steal. Argue with them, and they point to illegal MediaSentry tactics and DRM as justification.

    The truth is both sides are wrong. The MPAA, RIAA, ESA, etc. forge huge numbers of loss, not pointing to money that shifted to another market. Pirates aren't entitled to steal, but people who produce IP shouldn't be entitled to harass their customers either.

    If you really want to solve the issue it is quite simple.

    Put out a convenient product, instead of a DRM-ladened one, and people will but it. People will even accept DRM if it isn't too obnoxious. People are buying music and video legally over the internet. Digital distribution is the future and the big boys better embrace it rather than fight it.

    Next, if you want to see were the real theft is, it isn't 12-year old girls downloading Rhianna albums, but rather rampant pirating in places like China and Russia, where pirates mass-produce your material and resell it illegally.

    The US economy would be vastly better off if they received money from the IP they produced globally. The entire world watches our shows, movies, listens to our music, uses our software, plays our games, etc.

    A real international force (unlike the UN) should be able to enforce sanctions against nations who do nothing to crack down on massive piracy. Allowing pirated DVDs to be sold on the street is not acceptable.

    Next, consumers in China often have less money to spend than their US counterparts (though that may change) and they are used to cheap prices on pirate goods.

    The MPAA should HIRE the guys doing the best bootleg releases over there to turn around quick, legal, localized releases and sell them cheap to compete with the pirate market.

    The sad thing is that pirate releases are sometimes vastly more convenient, and better than commercial releases. Check out pirate Windows XP CDs loaded with new drivers, pre-loaded apps, simpler installers, etc.

    --
    http://blindscribblings.com - Tasty pop-culture in conceptual fashion.
  10. Re:"Lost" to piracy by bonch · · Score: 3, Insightful

    If it's crappy, why is getting pirated? That doesn't make sense.

  11. Re:"Lost" to piracy by HungryHobo · · Score: 5, Insightful

    because while it isn't worth money to those people it is just above a youtube video of someone lighting their farts and staring at the wall, in that order.
    They wouldn't spend their money on it even if there was no piracy is all it means.
    How is this concept so very very very hard for certain people to understand.

    Also- downloading a movie off TPB is less effort than going to the video rental place.
    Simple as that.
    Even if the video rental place halved their prices it would still be more effort to go there.

    Hell I have no problem paying a subscription- I pay for a rapidshare account. It's convenience that matters to me and TPB is very very convenient for people. And since the rights holders seem to be represented by idiots who didn't jump in faster services like TPB and Rapidshare got there first and are now well dug in.

  12. Re:"Lost" to piracy by Gewalt · · Score: 4, Insightful

    If it's crappy, why is getting pirated? That doesn't make sense.

    Because civil disobedience is an excellent way to show your disapproval of bad business models.

    --
    Modding Trolls +1 inciteful since 1999
  13. Re:"Lost" to piracy - Major Fallacy Here! by Nom+du+Keyboard · · Score: 4, Insightful

    You're losing sales. That's pretty valuable to somebody trying to make a living off of it.

    You make the fallacy of equating every pirated instance to a lost sale. Many songs are copied that would never be bought otherwise, and the same applies to movies and software. People would simply go without at the price demanded for a legal sale, or find a cheaper alternative (listen less, FOSS, etc.). So to say that sales are lost to piracy is no more valid than flogging the figures of $200B and 750,000 jobs.

    --
    "It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
  14. Re:"Lost" to piracy by bonch · · Score: 5, Insightful

    If you honestly believe people are pirating games, movies, and music as a form of "civil disobedience" to stick it to the man, I don't know what to say. It's the same tired cultural revolution argument that's been trotted out for over a decade. The simpler truth is that human beings are selfish by nature, and if there's an easy way to get something for free without repercussion, they'll latch onto it and justify it any number of ways. Your argument, for instance, is a mental exercise in portraying other people as the bad guy, even though you're the one ripping off the artist. It's a huge leap, but people make it all the time so they don't feel like they're doing something wrong.

    Besides, what "bad business model" are you referring to? The one where you make something and try to sell it? The industries have already adopted internet distribution models through iTunes, Steam, and so forth. What more do you want?

  15. It's not that simple of an equation by sjbe · · Score: 5, Insightful

    You're losing sales.

    Let's go through the logic of that shall we?

    1. Copyright holder sells Copyrighted Material
    2. Some individuals make unauthorized copies
    3. Copyright holder loses money because income is not received from unauthorized copies.

    Seems to make sense at first.

    Problem with that logic is that it typically implies that every instance of copying equals an instance of lost sales which is clearly and demonstrably not true. Someone who cannot afford the authorized copy will never purchase it so that cannot be a lost sale. Someone who is unwilling to pay the price being asked is likewise never going to be a lost sale. Ergo the only population in question is those who are able and willing to pay the price being asked but decide to pirate anyway. This is necessarily a smaller population.

    What really is being claimed is that copyright infringement cannibalizes a percentage of sales that otherwise *may* have come to the copyright holder. For digital works, the marginal cost of a copy is essentially zero so while the copyright holder may lose a sale, he/she/it doesn't lose any cash since they have not lost an asset they owned. It might induce a higher fixed cost per unit since fewer units are sold and the cost cannot be amortized over as many units. A problem to be sure but a very different issue.

    It also implies that unauthorized copying never results in purchases of authorized merchandise. It is relatively easy to find examples of products where bootleg/unauthorized copies actually helped drive the popularity of the product to the point where authorized copy sales increase.

    You'll notice the word theft never was mentioned because it isn't theft. This doesn't make the copyright infringement any more moral or legal but it does make it a different situation.

  16. Re:"Lost" to piracy by future+assassin · · Score: 3, Insightful

    You're losing sales. That's pretty valuable to somebody trying to make a living off of it.

    So one industry is dying because of social attitude changes, while the money that industry lost was just spent on another part of the market which thanks to piracy is now booming and employeeing citizens.

    --
    by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
  17. Re:"Lost" to piracy by HungryHobo · · Score: 4, Insightful

    Nobody's asking them to pay. But if they were asked to pay they'd simply decline to watch. simple as that.

    Value: ~Zero
    Cost: ~Zero
    Result: Watch

    Value: ~Zero
    Cost: ~$9.99!
    Result: Goes and watches someone light their farts on youtube.

    Simple enough for an arts student to understand.
    How is this concept so very very very hard for certain people to understand?

  18. Re:"Lost" to piracy by HungryHobo · · Score: 4, Insightful

    show me where on TPB they get asked to pay.
    The question was about lost sales. the point was there were no lost sales because if they had to pay to view then they simply wouldn't view.

  19. Re:"Lost" to piracy by gilgongo · · Score: 4, Insightful

    If it's crappy, why is getting pirated? That doesn't make sense.

    Probably for the same reason as I read the crappy free daily news sheets they hand out on the subway: they're free, they pass some time, and if they bore me I can throw them over my shoulder without a second thought. Nothing lost, nothing gained.

    Oh, and nobody loses a sale :-)

    --
    "And the meaning of words; when they cease to function; when will it start worrying you?"
  20. Re:"Lost" to piracy by MobileTatsu-NJG · · Score: 4, Insightful

    "I'm going to take it and derive enjoyment from it, but it's not good so I won't pay for it."

    If one cannot return a shitty movie, he or she's going to find another means to review its value.

    --

    "I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)