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Study: Piracy Doesn't Harm Digital Media Sales
r5r5 writes "European Commission's Institute for Prospective Technological Studies has published a study which concludes that the impact of piracy on the legal sale of music is virtually nonexistent or even slightly positive. The study's results suggest that Internet users do not view illegal downloading as a substitute for legal digital music and that a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchase websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting a complementary relationship between these two modes of music consumption. According to the results, a 10% increase in clicks on legal streaming websites leads to up to a 0.7% increase in clicks on legal digital purchase websites."
It's worth noting that this study only measured the effect of piracy on online purchases, not on revenue from physical formats.
Too bad EA didn't get the memo in time.
the recording industries will simply stick their fingers in their ears whilst singing "nanananananana"
. .
For example, just because some people steal cars doesn't mean that I am not going to buy a car. It's all very deep.
I'm not defending MAFIAA in any way, but just want to point out, that the study was conducted under circumstances when file sharing is illegal.
If it becomes legal, it may very well impact the sales in a negative way. Bottom line: interesting study, no practical applications.
May Peace Prevail On Earth
a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchase websites
uh oh, cue the correlation/causation nazis. ok, i'll go first. just cuz thy measured a 10% increase in pirate clicks and an 0.2% increase in legal purchase clicks doesn't mean there is a connection. Heck, perhaps if there had been fewer pirate clicks then there would have been more legal clicks! Also, what the heck is a click? shouldnt the metric be downloads or purchases?
What? People steal cars? I better DRM mine.
Math...how does that work?
No sig today...
I do not think that implies to a negative. You cannot say, well we did not see and correlation, but their might still be causation.
Troll is not a replacement for I disagree.
Piracy's real effect on music sales is difficult to accurately assess. In classical economics prices are determined by the combination of the forces of supply and demand, but the participators in the digital market do not always follow the usual motives and behaviors of the supply and demand system. First, the cost of digital distribution has decreased significantly from the costs of distribution by former methods. Furthermore, the majority of the filesharing community will distribute copies of music for a zero price in monetary terms, and there are some consumers who are willing to pay a certain price for legitimate copies even when they could just as easily obtain pirated copies, such as with pay what you want vendors.
Another issue is that because some people, like many in China, illegally download music because they cannot afford to purchase legitimate copies, not every illegal download necessarily equates to a lost sale. This has some effect on music sales, but as Lawrence Lessig points out, there is wide asymmetry between the estimated volume of illegal downloading and the projected loss of sales:
“In 2002, the RIAA reported that CD sales had fallen by 8.9 percent, from 882 million to 803 million units; revenues fell 6.7 percent. This confirms a trend over the past few years. The RIAA blames Internet piracy for the trend, though there are many other causes that could account for this drop. SoundScan, for example, reports a more than 20 percent drop in the number of CDs released since 1999. That no doubt accounts for some of the decrease in sales... But let’s assume the RIAA is right, and all of the decline in CD sales is because of Internet sharing. Here’s the rub: In the same period that the RIAA estimates that 803 million CDs were sold, the RIAA estimates that 2.1 billion CDs were downloaded for free. Thus, although 2.6 times the total number of CDs sold were downloaded for free, sales revenue fell by just 6.7 percent... So there is a huge difference between downloading a song and stealing a CD."
nanananananana
BATMAN!!!
Didn't you forget Katamari Damacy, or Hey Jude, or Hey Hey Goodbye??
Digital Ride Management?
Don't spread the MAFIAA's FUD for them. File sharing is already legal. "File sharing" and "copyright infringement" are not the same thing.
Indeed. And there is a lot of music available which is either in the Public Domain, or under one of the Creative Commons licenses. For instance, excellent recent recordings of classical music were released as 320kbps MP3 and as lossless tracks, and these are explicitly in the Public Domain. Lots more (typically electronic & rock & metal & house, etc.) can be found at the Netlabels collections. MusOpen typically has classical music, and also has some PD or CC sheet music.
Share away, with these files. Upload, download, give away, stream, sell, whatever. And quite legally. Just about the only thing you can't do with Public Domain stuff is claim that you own the copyright, or that you act on behalf of the copyright owner. Either copyright has expired, or it was never copyrighted to begin with.
Those who can make you believe absurdities can make you commit atrocities. - Voltaire
Didn't you know that in the new RIAA/MPAA dictionary "click" = "download" = "upload" = "unauthorized distribution" = "stealing".
Yes, they're deliberately confusing people.
Unix is user friendly, it's just selective about who its friends are.
I used to get A's in mathematics... What happened?
File under 'M' for 'Manic ranting'
I'm not for record companies... quite the opposite in fact: I think they are getting their karmic just dues for their disgusting behaviour of this oligarchy over many decades.
However, if you're going to do science it's important to get it right, and this study's conclusions are just plain wrong.
What they are measuring is that when something is more popular, more people pirate it *and* more people buy it. This does not mean that more piracy causes more purchases or vice versa. The connection between the two is the popularity of the music.
In order to show what this study and/or article are trying to show -- that piracy does not harm legitimate sales -- they would need to look at two groups of people: one of which is able to partake in piracy and one of whom is not (easier said than done), and then compare which group has more sales. If the sales in the piracy-able group are not less than the piracy-unable group, then you can conclude that piracy does not harm sales. But this is the only kind of experimental study which can show this correlation. I'm extremely curious about this, and would *love* to see what the actual, truthful answer is to that question!
This study has been done 100 times and it always reaches the same conclusion. These prosecutions are just serving as a minor revenue stream and a means to legitimize a set of rules that benefit the record companies far more than the consumers or the artists they are purporting to protect.
I can see "piracy" helping CD sales. Basically, it becomes a "try, before you buy" situation and someone wanting the information stored in a nicer way.
I don't see how it helps legal digital sales. If someone pirated X, they already have X, so why would they buy it?
Is it the case that once having pirated X, they buy X+1, not being able to find X+1 on the pirate sites?
A bit off-topic, but I was watching Star Trek: The Next Generation during my lunch break, and I caught the Samaritan Snare episode, in which some aliens capture a Federation phaser and then proceed to replicate copies of it. Seeing that, I was immediately reminded of all this stuff regarding intellectual property, and it made me wonder: how in the world could a culture like ours survive in a world where even physical goods can be replicated without harm to the original creator of the product? When it's possible to create physical copies of goods as easy as it is to make digital copies now, what then?
All I know is, we need to get our stuff together so we'll be ready.
It started off with a copyright disclaimer saying "Piracy is not a victimless crime".
It got me thinking, yes I feel for the 1% affected by piracy because instead of making $1.4 billion they will only make $1.2 billion this year.
Most of us just cannot relate to the impact losing $200 million has on your life and so we should do more to prevent online piracy and not steal content ourselves.
I for one will no longer steal content because I am such an asshole for taking profit away from the 1%. They have mouths to feed with caviar, yachts to fuel, and dreams to realize, just like the rest of us.
Please, don't make a 1%'er cry by stealing their content.
I haven't thought of anything clever to put here, but then again most of you haven't either.
... as I recall.
A few years ago I found a magazine article about music "piracy" from 1981. Back in those days most of the technology we use today didn't exist. Almost no one had a computer, there was no Internet (as we know it today), etc.
The villain back then, according to the RIAA was cassette tape recorders -- people were making tapes of their friends albums rather than buying them. So the RIAA commissioned a study that they hoped to take to Congress to convince them that they needed new laws to combat this terrible problem. But the report was shelved and never widely publicized because it showed that people who owned high end cassette decks, on average, bought 75% more albums than people who didn't.
The more things change, the more they stay the same.
Why do I suspect that those with the 2.1 billion downloaded CDs would be listening to the radio instead of purchasing a CD if downloading them was not an option.
You're exactly right. All of the Media Cartel's claims of lost revenue are based on a fallacy - that every song/movie downloaded equals a lost sale. No matter how many times this is shown to be false, they keep repeating the same lie over and over. Considering the number of times that the Record/TV/Movie companies have cheated artists out of money, this is not surprising.
Possibly... that's why GP said the effect is "difficult to accurately assess."
If downloading was to suddenly vanish. If, hypothetically, tomorrow all of Pirate Bay dried up and every other illegal method for obtaining music ceased to be... what would the actual effects be? Would all of those people go start buying CDs? Would they just get free accounts on Pandora/Slacker/etc? Or do those people already have accounts on free streaming sites? If I were a music downloader, I'd still listen to the radio from time to time, if only to help discover new artists.
Certainly some of the displaced pirates would buy a few albums. Possibly virtually via itunes or amazon. And that possibility is what RIAA/MPAA clings to. The possibility that if 1 pirate could be forced to buy through legal means, then clearly they ALL can be convinced. They just need a harder nudge.
This signature is false.
Question – why do you blame it on pirates? Not saying illegal downloading does not have an effect. (I think it does but I am reading the article) – but why do you name it as the primary cause?
Why not blame the consumer for buying other types of media, such as games and videos?
Why not blame it on market structure where the market has become more efficient and the consumer is grabbing more of the surplus? Consumers are buying more single tracks. They are listening to streaming radio channels which pay less than radio.
My instinct is that these 2 factors have as much to do with this as anything.
Everyone understands that it's wrong when a commercial outfit pirates and sells music or films for their own profit. Only they themselves would object to it being illegal.
But non-commercial media sharing is in a very different category to that. The sharing that kids do on the Internet is just today's counterpart to what we used to do as kids back in the day, copy our records onto cassette tape for our friends, and it's certainly not criminal activity.
It was free promotion back then, and it's free promotion now when done on the Internet too. The labels should be overjoyed that promotion is being done for them, for free. Once fans become fans, they will end up buying the official versions too, because that's what fans do. But without the free initial exposure, they won't become fans in the first place.
Yeah. Their data does not support their conclusions.
First, note that their conclusion was that there is "essentially zero" correlation between illegal downloads and legal downloads. The correlation they found (for every 100 people who illegally download, 2 of them will go on to legally download the music) is insignificant (and "essentially zero" is their phrase, not mine.)
What they don't measure, though, is what would have been purchased if pirate downloads had not been available. They do say, however, that 20% of the people who clicked on pirate download sites never went to legal download sites, not ever once. If even one in ten of these people would have bought a legal download if they couldn't get the illegal one, that would wash out their 0.2 percent positive correlation entirely, not even thinking about the remaining 80% who sometimes looked at legal sites but ended up downloading from pirate sites. What fraction would have bought music legally if pirate downloads weren't available? I don't know-- but neither do they.
http://www.geoffreylandis.com
If a 10% increase in piracy activity correlates with a 0.2% increase in legal activity then we can estimate that a dollar of stolen media corresponds to $0.02 in lost revenue. If the RIAA came after me for 100 pirated songs, I'd be happy to settle the lawsuit for $2.
That is kind of like saying... "Shoplifting does not impact overall volume from Walmart". Its still theft people!!! Now I'm not saying I never download pirated material, but at least I'm honest with myself in saying that it is still theft. It doesn't matter that it doesn't affect sales. Its still theft.
Music sales may be continuing, but the difference is that people tend to buy bands like Justin Bieber or other pop stuff pushed by the record labels.
In the 1990s, before piracy, one could do well as an independent band, or have a good chance at getting signed and making it big. Back then, if you were good, you had a chance of making it big. Trent Reznor is a good example.
Fast forward to now. Music as a way of making income is dead, just like textiles and meat-packing. You cannot live off of CD sales
Sorry, but you've got it wrong. Piracy didn't kill bands, technology did.
Just as you can no longer make a living selling buggy whips, changes in technology has greatly reduced the demand for physical media. The inconvenient truth that nobody wants to admit is that iTunes and other sources of *legal* downloading is the biggest thing hurting musicians and the record companies. Here's why:
Until a few years ago, buying music meant going to a store and buying an album. Regardless of the format (CD, Vinyl LP, etc.) buying an album was your only choice. Even if half the songs on those albums weren't so great, it didn't matter. Buying an album was the the only option available to consumers. This was a great deal for musicians and record companies because it meant that they sold a lot of albums and both musicians and record companies made a lot of money.
Then along comes the iPod, iTunes and all the rest. Suddenly, people can now buy individual songs and put them onto their mp3 player of choice. Not only does this greatly reduce the demand for physical media (CDs), but when their favorite band puts out a new CD they can just buy the 4 or 5 good songs that everyone is talking about and ignore the 5 or 6 shitty ones.
At this point it becomes a matter of simple arithmetic. Instead of selling a million albums, an artist sells a million copes of 5 songs, and 5 million songs at 99 cents each is a lot less than 1 million albums at $12-15 each.
The same is true for publishing royalties. Once again, the math is simple. Sell a CD and you get publishing royalties for all 12 songs. Sell individual songs and you only get royalties for the songs sold. The shitty songs that everyone ignores generate no money.
Right. It's all a wash.
So now can we please just stop all the nonsense and have the RIAA leave people alone?
You are welcome on my lawn.
http://youtu.be/0Qkyt1wXNlI
Let me know if you run into any of those classical economies. The one we're in is anything but.
"Supply and demand" are relics of the Industrial Revolution. Few of the really big industries (and especially ones that have to do with virtual property) show any "supply and demand" effect any more. And what constitutes "supply" when you're talking about digital information? I assure you, there has never been a shortage of people making music. And there's no shortage of ones and zeros, so... by my back of the envelope calculations, the actual retail price of an mp3 of a pop song should be much closer to $.0001 than to $.99.
You are welcome on my lawn.
This has been proven over and over and over again in all manner of ways and all manner of areas.
People believe, for example, that homosexuality is somehow learned and that homosexual parents will make gay children. Provably false all over the place. People continue to believe that being cold gives you a cold. This is also provably false and no one ever questions how one gets a cold in the summer time. It's like apples can hit them on the head all day long and they'll NEVER get that apple come from trees because they won't look up!
So the **AA groups believe that people don't buy when they can infringe. That seems logical on the surface, but reality is different.
Give people an efficient and reliable way to download things legally, and they WILL pay for it... but it has to be what they want in the way they want it. FORGET about lacing the video streams with commercial ads like on TV. (But they'll do that anyway... they always do.)
Belief trumps fact all day long. The only way to trump belief is to wait for the believers to die....and hope they don't teach their beliefs to others.
you know why people don't even bother anymore to try buying stuff anymore?
Because the "pirate" download is easier, sometimes faster, and, especially in the case of videos, earlier and better (meaning without all these traillers, fbi screens on the beginning etc).
Besides, the industry only moved their slow butts for two reasons: this piracy they speak of and apple. If they could, they would be selling nicki minaj crap por 30 dollars each song.
Music as a way of making a living is as viable as ever. I spend more per month seeing musicians play live than I spent on CDs.
Give me Classic Slashdot or give me death!
Who cares about physical formats except for half a dozen music nerds who wants the "experience" of a physical object? It's pretty obvious that the younger generations just want to hear their music, not accumulate dust.
Car moves too far from your home without you in it - it goes BOOM!
You don't need to worry about police or insurance either.
Mine's packaging is covered in Arabic so it all looks like a terrorist car bomb gone bad.
Mit der Dummheit kämpfen Götter selbst vergebens
Repeatedly.
But, just like with the hundreds of studies that disprove the lies about marijuana use, the people who buy our government simply don't care, and will continue to reject reality and substitute their own.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Dog with Rockets and Machineguns
An enigma, wrapped in a riddle, shrouded in bacon and cheese
That is a better answer to why people listen to music, but it does not explain the relative decline of music sales to other entertainment products.
Consider this: The 80’s is generally considered to be the zenith of the mainstream recording industry. Since then the amount people have spent on music has fallen – both in dollar terms or as a percentage of their entertainment budget.
Video games were a niche product of young men. Today even grandmas are playing the Wii.
Movies were limited to the screen or rental - buying a VHS movie was about $100. Now it is much easier to buy a DVD to build your library or steam something on line.
But music was relative cheap, value wise. A low end stereo system did a good job. Walkman allowed you to take the music on the go. Sure, MP3 players are an big improvement – but relatively speaking the 2 examples that I am giving had a relatively larger improvement.
And our government is absolutely willing to believe whatever the entrenched industry tells it. No matter what evidence to the contrary they are presented.
It's the way faith-based governments work. Just have faith in the lobbies with the most money, and that money will be transferred to you.
Hectice, baby, Mercator says hello to you
They can't all be convinced, there isn't enough money in the world for them to all buy the legal copy hence why the 1 pirate to 1 sale thing doesn't quite work. You can't be sure that if the pirate couldn't pirate they would buy.
my car already has DRM, its called a telematics box, the insurance company mandates I have it, because I fit into a high-risk (young driver) category. But this doesn't stop them selling my data to traffic analysis services. :(
The sociopaths in suits are too brazen, too stubborn, too consumed with power, wealth and political connections to care what it says in "some study" that they'll snidely dismiss.
It doesn't matter if they're factually proven wrong, these sociopaths have continually demonstrated that they are beyond reason.
When they start losing money because artists are sick of their bullshit? Must be piracy.
Funding through Kick Starter? Yup, piracy.
Alternative distribution methods that earnestly attempt to legitimatize? Piracy.
Licensing with CC or just plain public domain instead? Piracy.
These rabid dogs are beyond curing and can only be PUT DOWN.
Maybe not *all* of them, but if some could be convinced, more could be convinced. At least, that's the RIAA's stance. They just need to bludgeon a little harder.
This signature is false.
I'd like to think we're a bit more high speed than that, these days.
USB stick sneakernet!
This signature is false.
No, it means that they are not correlated.
This is more a product of the payola system that ensures record companies control what we hear on the radio. The bland sameness of contemporary pop music is driven by their need to create stars that they can control and tailor to their market analysis. This is what happens when corporate decision making is driven by analytics. Creativity gets left out of the equation.
I'm always astonished by the complete absence of talented foreign artists on US radio because someone way up high decided not to allow them entry into our entertainment market. A good current example is the Kiwi Kimbra who backed up Gotye on the strangely successful song of his. You would think that would get her some commercial recognition considering how talented a singer she is (watch her live performances). She released an album and it is not to be heard in most corners of the US market other than a few TV commercials.
Sure it's hard to get noticed through traditional channels but there are plenty of MySpace (back when it was relevant) and YouTube artists who have developed a following that can drive concert ticket sales. Social media is also influencing the rise of artists to the general consciousness of the public. With a little initiative an artist or group can market themselves and develop a following that could develop into something more. Taylor Swift is a good example of how artists should approach a career in the industry. While she's easily dismissed as a typical pop sensation, take a good look at how she closely manages her own business and cuts out the record industry moochers in the process.
Back when radio stations had DJs that could control their playlist there was more variety to be had. That variety still exists in venues like college radio stations, NPR affiliates, and the few remaining independent commercial stations.
There has always been generic pap on mainstream radio. You don't hear the junk that came out in the 60's, 70's, and 80's on the "classic" stations nowadays so that biases the view that what we have today pales to what we had in the past. There's no reason to despair about the "death" of good music. It's there today. You just may have to look harder for it.
I am becoming gerund, destroyer of verbs.
Keep in mind, too, that songs can act as promotional material for their artists. If someone pirates a song then plays it to a bunch of their friends that can turn into sales. Just as how radio play actually increases sales of the songs played, so too can pirated downloads.
Couldn't be lower discretionary purchases in a recession. No, must be pirates. Note, the rise of the initial piracy, Napster era, saw an increase in spending, up until the recession.
Learn to love Alaska
Interestingly, does that work only as long as piracy is kept illegal?
I've seen it attempted. Some teens were walking through the parking lot minding their own business when a car said (in that deep monster truck announcer voice) something about 'the viper' and standing too close (they were not really THAT close). One of the kids (apparently intoxicated) yelled "OH YEAH! Well FUCK YOU!" and began smashing the headlights and windshield while yelling "fuck you" repeatedly.
Yeah, I guess Digital Ride Management works about the same as the other DRM then.
And it's just as irrelevant to me now as it was then. I believe people should approach this issue from the freedom angle, not the "Well, it doesn't really hurt sales..." angle; anything else misses the point, in my opinion.
Filthy, filthy copyrapists!
I don't know that it "hurt" them; I think people just decided to copy data without giving the music industry money. I don't actually think a loss of potential profit is harmful in the first place.
Filthy, filthy copyrapists!
"There is evidence that if illegal downloading were to hit the 100% mark then there would be no music made. (well no professional music made) There would be no way to fund it."
That's such an awfully stupid comment. If no music was paid for due to 100% illegal downloading there'd be no professional music made - no shit, professional by definition requires payment. Professional is the key qualifier though, there'd still be music made, I know any number of people who have made their own bands for the sheer enjoyment of making music rather than any inherent interest in making a profit.
Supply and demand are still useful for gauging economic reactions. The problem is that Supply and demand are like Newtonian Physics: Very useful in the simplified case, but there's more going on there. In physics it's relativity. In economics, there are various other forces at work (e.g. lobbying, government action, and, yes, even piracy). Those other forces have an effect on price, though each case varies (and can even vary from purchase to purchase within the same market). Still, supply and demand are still useful metrics to use.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
Yes, they are both illegal, but one requires physically breaking into a car, and moving it to another location where you must either strip it for parts or sell it to someone else, and the other can be done from your couch.
More importantly, stealing a car deprives the original owner of their car. Downloading music leaves the source data completely intact, depriving no one of anything except for "potential" profit.
The people who steal music or movies or other digital media were probably never going to buy that stuff in the first place.
It makes sense, of course, to keep thievery from becoming so easy that everyone can do it -- and it was that way back in the early days of file sharing. But nowadays there is a sharper line between buyers and stealers.
What part of "the data doesn't support their conclusion" do you need me to repeat?
That is, indeed, what they said. However, the data does not support their conclusion.
http://www.geoffreylandis.com
uhuh, i think most people with an eye on the world already knew that but maybe it's nice to see an official governmental organization come to an official governmental conclusion on it so the bought out judges stuck in the past might get a chance to get their head straight about some things before condemning downloadmom or uploadson to a life of crime with excessive fines
Free speech was meant to be free for all... how can anyone grow up in a nanny state ?