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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.
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?
Don't spread the MAFIAA's FUD for them. File sharing is already legal. "File sharing" and "copyright infringement" are not the same thing.
Unix is user friendly, it's just selective about who its friends are.
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.
This doesn't necessarily mean that sharing music should become legal, it just means that it shouldn't be life-ruiningly-illegal. Speeding is illegal, but if you get caught you just get a small fine and life goes on. They don't fine you more than 10x your yearly income and stick you with legal fees that could bankrupt CEOs.
Math...how does that work?
No sig today...
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."
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
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?
... 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.
I agree, and I can't understand why the media industries haven't pushed for this sort of thing.
If Jammie Thomas had been fined $100 then she would have had no sympathy. It would deter a lot of people. A lot of people would take the risk, but the same happens with illegal parking. We only need to keep the problem manageable. There would be issues in that we'd need some sort of appeals mechanism and wouldn't want to cause too much hassle for the false positives, or make it too easy for a media company to churn out notices like they do with the DMCA.
Shagg's comment is valid because the MPAA and RIAA don't seem able to make the distinction.
If I rip a DVD that I purchased to a computer I own, that could be considered file sharing. The DVD has shared the file with the computer, but I have not infringed a copyright. If I transfer that digital copy to my tablet or smartphone so that I can watch it during a flight, also file sharing, still not infringing.
If I use the copy on my computer to burn physical DVDs and begin selling them, THAT is a copyright infringement
The powers that be, via DMCA, seek to outlaw all of these practices, and many more.
This signature is false.
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.
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
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.
Shoplifting harms Walmart. Infringement through file sharing does NOT.
And that's the whole point of the research and studies. They show clearly it does not "hurt" their income to infringe. Also, research has shown that by keeping the parties involved with THEIR stuff instead of alternatives, keeps their market popular. We learned that lesson VERY well through Microsoft who famously left security of thier OS license keys absent or weak for a long, long time while they killed the competition and counted "pirated copies" as part of their market share reports.
So when it comes to online media services, the "most free" will win out over those who are less free.
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
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.
Interestingly, does that work only as long as piracy is kept illegal?