More Evidence That Piracy Can Increase Sales

Socguy writes "The London School of Economics has published a new study (PDF) which shows that the claims about digital downloading killing music and movies are overblown. In fact, there is new evidence to indicate that it actually generates more income in certain cases. 'While it acknowledges that sales have stagnated in recent years, the report points out that the overall revenue of the music industry in 2011 was almost $60 billion US, and in 2012, worldwide sales of recorded music increased for the first time since 1999, with 34 per cent of revenues for that year coming from digital channels such as streaming and downloads. "The music industry may be stagnating, but the drastic decline in revenues warned of by the lobby associations of record labels is not in evidence," the report says. ... The growing use of streaming, cloud computing, so-called digital lockers that facilitate the sharing of content and sites that offer a mix of free and paid methods of getting content will, the study predicts, spur the entertainment industries to shift their focus from pursuing illegal downloading to creating more legal avenues for getting content online.'"

Comments

what about the musicians?

[schneidafunk]

I'm more interested in how well the artists are getting paid, any study on that?

Re:what about the musicians?

[paulpach]

The people actually doing the work are always paid the least. That's what the "capital" in "capitalism" intends.

(And it works surprisingly well, but it's so far short of ideal.)

What you fail to take into account is that getting the capital in the first place took a lot of work for someone to produce. It is not like the capitalist is not working; when he invests, he is putting the fruit of his _previous work_ at risk. He can lose it all, and he is accepting that he won't enjoy the leisure he could be getting right now, with the hope that one day in the future he will enjoy more. Meanwhile, the person doing the job (i.e. the employee), will get paid whether the investment is good or bad.

The system works because the capitalist takes the risk (therefore he has an incentive to take on successful projects and avoid bad ones) and the employee minimizes risk while providing services he is good at and getting access to the tools that help him. The system works because this is a win win relationship, that allows both to work together and produce value.

Re:and maybe rape makes woman more likely to put o

[UnknownSoldier]

> But whether it increases sales is irrelevant.

Sticking your head in the sand over facts is not "irrelevant." There are 5 categories of fans:

1) Will pay for it, will never pirate it
2) Will pay for it, but might ALSO pirate it so they don't have to transcode it
3) Might pay for it, might pirate it
4) Will never pay for it, and pirate it
5) Will never pay for it, and go without

The goal is to _understand_ how those in (3) move to the other categories.

In this day and age consumers are EXTREMELY sensitive to pricing. I don't need to remind you that Valve saw over 2000% (yes, 2000%) increase in Steam sales when they lowered the prices of L4D.

However even if the the product is FREE it doesn't mean people want it such as group (1). Conversely, there ARE some countries where downloading isn't a crime, so stop with your rhetoric that piracy == stealing.

At the end of the day its all bits. Claiming pseudo-ownership over a certain order/representation of them is insane but it is the current system we have, for better, or worse.

Understanding the value of something AND its relationship to money is extremely important as we move towards free energy.

Also see this excellent related TED talk
http://www.ted.com/talks/johanna_blakley_lessons_from_fashion_s_free_culture.html

Re:and maybe rape makes woman more likely to put o

[Baloroth]

Sure, but while it may be irrelevant to whether piracy is illegal or not, profits are extremely relevant to the question of whether it is immoral or not and whether or not it should be illegal. Therefore, the fact it increases sales is quite relevant to any discussion of piracy and the OPs analogy is, well, simply wrong (rape itself is inherently immoral, while copying is not).

Of course the headline is misleading.

[Bill_the_Engineer]

The headline and the summary is a little misleading. The study doesn't actually show that piracy increases sales.

The submitter conflated three issues addressed in the study.

1) Making it easier to obtain authorized copies of digital music offset losses due to piracy. "Revenue from online sources including recorded music sales, streaming, online radio, subscriptions and other is increasing, both absolutely and as a percentage of overall revenue." The music industry remains healthy despite claims of huge losses due to piracy. The industry is learning to adapt by offering something other than the traditional buy-to-own model.

2) Independent artists are able to make money inside a inclusive collaborate digital culture. This challenges the assumptions that someone must have exclusive rights to music in order to make money. The authors talk about CreativeCommons and how SoundCloud is used to collaborate.

3) Prosecuting individuals for copyright enforcement isn't effective. "Targeting individual internet users is not likely to reverse the trend toward an online sharing culture, and there is an urgent need for independent verification of claims of harm to the creative industries as a result of individual copyright."

The authors make the following conclusion for responsible copyright enforcement:

"Broader ‘fair use/fair dealing’ provisions, proposals for private copying exceptions and aiming copyright enforcement and prosecution at infringing businesses instead of at citizens who share online is likely to have the desired effect of balancing the interests of the creative industries and citizens. When both can exploit the full potential of the internet, this will maximise innovative content creation for the benefit of all stakeholders."

I wonder how many people will argue that piracy is good based only on the misleading headline and not the actual contents of the study?

Re:Piracy is competition

[jedidiah]

You also know what's competition? The back catalog.

Every band, every label, every directory, every studio has to compete in an environment where creative media of all kinds is cheap and plentiful. I simply don't have to be stuck as a member of a captive audience being forcibly subjected to today's dreck. I can choose from all of the classics of the last 100 years and they are for the most part dirt cheap.

We are awash in a glut of media. Supply and demand dictates that prices will fall even without piracy.

A watched a new movie and a 50 year old TV show last night. Most of my music was acquired before the turn of the century.

Re:and maybe rape makes woman more likely to put o

[Artifakt]

It's not just about morality. Copyright violation (In the US, at least, I'm not sure if it ever was under the older European system) was all originally a tort. To sue for civil damages, yes, you normally have to show there actually are damages. Copyright law only started using statutory damages in the 2000's, and the US got by with considering actual damages only for over 200 years, before anyone thought it needed changed. Copyright law still covers cases where the matter ends up in a civil suit rather than criminal courts.
            Profits are therefore still relevant, so long as getting a conviction, or just threatening to seek one, also supports winning civil suits. What we have now allows the possibility of people paying statutory damages to other people who have not in fact been damaged, and criminal law being used to support that civil litigation trick. That's not good law, and there's plenty of practical reasons not to do laws like that.
            This also points up that people who don't know the law covers torts as well as crimes should learn before they use a word such as "illegal" in a blanket way and think they are shining light on the subject. Recognizing that copyright torts still exist means that a claim that "profits are irrelevant" becomes self-evidently false. Knowing that criminal prosecution is often threatened in this area to force capitulation on civil claims makes it generally relevant to all current copyright cases and laws. But that's not particularly a moral point - torts are not about moral action - responsible is not the same thing as guilty, and charge abuse is not just happening in copyright cases, even if it's very common there.
          Now taking the thread back to support your moral point - declaring that the profits don't matter means pointing out the immorality of getting paid for NOT having been harmed can't enter the discussion. To run with the rape analogy, someone is trying to declare that the court in a rape case should not consider whether the rapist is actually HIV+ or not before they choose to seek a charge of aggravated rape. (yes, that's only roughly analogous, maybe I could get closer with a car anaolgy).