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Online Piracy Can Be Good For Business, Researchers Find (vice.com)
An anonymous reader quotes a report from Motherboard: Piracy isn't always the vile market bogeyman it's portrayed to be by the entertainment industry, a new joint study by Indiana University has found. Indiana University Researchers like Antino Kim say that online piracy can sometimes have a positive impact on markets, and being overly-aggressive in the policing and punishing of pirates may sometimes be counterproductive. As an example, Kim's study ("The 'Invisible Hand' of Piracy: An Economic Analysis of the Information-Goods Supply Chain") points to the hit HBO show Game Of Thrones, which routinely breaks piracy records thanks to heavy file sharing on BitTorrent. The researchers found that piracy often acts as a form of invisible competition, keeping both the manufacturer (HBO) and the cable operator (say, Comcast) from raising prices quite as high as they might otherwise. Raise prices too high, for example, and users will just flee to piracy, creating even higher losses. The researchers are clear to note their findings have their limits, and that they're not openly advocating for companies to fully embrace piracy. They do, however, argue that if you understand the benefits of piracy as a form of invisible competition, you'll find that overly-aggressive anti-piracy efforts can actually harm the market. "Our results do not imply that the legal channel should, all of a sudden, start actively encouraging piracy," researchers said. "The implication is simply that, situated in a real-world context, our manufacturer and retailer should recognize that a certain level of piracy or its threat might actually be beneficial and should, therefore, exercise some moderation in their anti-piracy efforts."
Tom 'O Reilly said it long ago, and he was right. So many things are discovered that way that would never have been known otherwise. Some, like myself, then buy whatever that was to reward the creator. Sadly, most businesses no longer reward the creator anyway...
Popular musicians are pirated and they sell more concert tickets.
Popular movies may be pirated, but the sequel will sell more entries. (Or you'll listen to the on Youtube and get some revenue from there.)
The show may be pirated, but you'll sell the t-shirts.
Almost all entertainment products have multiple revenue streams. Maybe the primary product you don't sell, but you'll sell derivative products. Or you'll sell to the same people 5 years down the road once they'll have the income to buy it.
Isn't this the oldest argument? The less appealing it is to purchase something, the more likely pirating becomes. Steam made it easy to buy games, and so games sales increased while piracy decreased. Before Steam, it was actually *easier* to pirate a game than it was to purchase it.
Then came Origin, the Ubisoft thingy, and now the Epic thingy, and as a result buying games became more difficult again in a fractured market, which resulted in games pirating once again increasing. no one wants to have 59 different launchers and storefronts.
Seeing a movie at home used to require a damn PhD. There were 50000 channels to choose from, and they all came in completely illogical bundles that made no sense. Online options were for some reason even more complicated. And it was bloody expensive too. Tadaa, pirating movies became a big thing.
Then came Netflix, it was cheap and easy. And suddenly pirating decreased.
But oh no, everyone wanted in on that sweet sweet deal, and now we have a fractured market which is bloody expensive if you want to cover even half of the good stuff. And guess what? Pirating has once more increased.
In short, the study is saying that if you offer a solid deal that covers the consumers needs, they will buy it. If you make it more appealing to pirate it (expensive and/or difficult to use), people will do that. I don't consider this rocket surgery.
The researchers found that piracy often acts as a form of invisible competition, keeping both the manufacturer (HBO) and the cable operator (say, Comcast) from raising prices quite as high as they might otherwise. Raise prices too high, for example, and users will just flee to piracy, creating even higher losses.
Piracy is good because it prevents piracy? Got it.
Aargh!
#DeleteFacebook
Researches find that the ultimate effects of piracy are complicated and of blurred attribution.
They go on to say they are shocked that the copout used on shareholders and legislators is based on the same amount of substance as any other pacification sound bite: Between jack and shit, averaging fuckall.
More at 11, though it's just talking heads and B-footage; we thought Bullshit had complicated motives and processes. Now the whole hour will be nonstory. Hell, half of this preview slot had to be stuffed.
Seriously though. "Exercise some moderation in their anti-piracy efforts" isn't happening. Can't give up 1) lobbying whatever their whimsy 2) a punching bag for any quarter report with losses
Raise prices too high, for example, and users will just flee to piracy, creating even higher losses.
They must mean losses *to piracy* as there's no mention of revenue-maximizing pricing. You could lose all but one of your legit customers if that guy will pay you $1B.
Also, it's only "good for the market" if you don't respect the idea of the copyright monopoly in the first place. Yes, there's benefits to consumers as both pirates and purchasers, but how you would argue there's any benefit to copyright owners is beyond me.
is the overreaction to it.
Ubisoft makes great games that i will never play because i wont pirate them & their ham-fisted DRM is a huge pain for legit customers.
Since i wont be a pirate & they wont let me be a legit customer. I'll be neither & just keep buying indie games instead.
From the summary:
"Our results do not imply that the legal channel should, all of a sudden, start actively encouraging piracy," researchers said. "The implication is simply that, situated in a real-world context, our manufacturer and retailer should recognize that a certain level of piracy or its threat might actually be beneficial and should, therefore, exercise some moderation in their anti-piracy efforts."
I don't know if this is intentional on their part, but the Big Finish Productions people regularly do sales of their stuff, even the somewhat-recent stuff. (They do a lot of full-cast audio stories for Doctor Who - new stories with the original cast - but they do a lot of other things too.) I remember on one of their podcasts a few years ago, they mentioned that they know people do illegally share their stuff around. Everything is (intentionally) unlocked mp3 and unlocked audiobooks, so it's easy to share. And someone on the podcast mentioned the sales help those who have "pirated" their titles to "square up."
Maybe that's not why they do the sale, but those sales help. They always get sales on their really old titles, and this person on the podcast suggested that a certain number of those sales were probably people buying the titles they already "obtained" elsewhere.
Anecdotally I'll admit that I first got into Big Finish when a friend "loaned" (gave) me a few titles. I really liked it, and worked great for my commute, so I started buying more stories. A year or so later, they had a big sale, and I figured "may as well buy the ones my friend gave me." So I did. Now all the audio stories that I have are ones that I actually bought.
So yeah, pirating stuff can lead to more sales.
feedback from the demand for pirated copies of the show allow companies like HBO and Comcast to tailor their prices to extract maximum revenue from their customers or potential customers by seeing where the subscriber numbers rise or drop due to cost increases/decreases and where maximum profitability lies in balancing the two compared to the pirate viewership. Without this feedback they might increase prices enough that they are losing potential profit due to reduced viewership OR they might decrease prices and be leaving money on the table.
So this competition “keeps [businesses] from raising prices quite as high as they might otherwise”, yet is somehow “good for business”? Uh, how exactly?
Now we’ve all known (even HBO executives have known, as the article goes on to say in its last part) that piracy provides free advertisement (a tangible business benefit). So, what are the new findings from the paper that show that “piracy seems to have a surprisingly positive impact on the profits of the manufacturer and the retailer”?
Certainly, that’s not its “competitive” effect.
The more exposure something like a show or movie gets, the more people will tell others about it. Some of those others won't be broke and will pay for the movie or show. It's free advertising, basically.
shit
Isn't this basic Black Market theory? The summary implies the benefit is to the market, by creating competition, rather than to the producers of the works. Producers don't care about the health of the market, nor do they want more competition.
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
What's online piracy?
What's the difference with offline piracy?
Is offline piracy non-plugged to Internet?
At $10, anyone who needs the article will pay, whereas people who are just curious will either pirate or go elsewhere. Compare that to Elsevier.
Did you escape from your mental health facility again? Better go back or they'll take away your pudding privileges again.
IIRC, there was another, old, report which argued that when more of a person's peers have a product, that person is more likely to get it, legally or not. Based on this, the author(s) claimed piracy is responsible for more new business than the loss of the original one.
This report feels more like an attempted explanation of the age-old argument that "people who pirate wouldn't buy the product in the first place, even without access to piracy".
I've been burned too many times on bad movies/games to just pony up money anymore, unless I'm in an actual movie theatre, of course. It's worth ticket price just for the massive auditorium and small crowds I typically encounter. The only game I *might* purchase without having pirated it first in the next year is Cyberpunk 2077. CDPR has a solid record of making good games with a decent life of play. Last game I invested any significant time in playing that wasn't already in my collection was Far Cry 4. I loved it. It was good enough to convince me to spring for 3, 4, and 5. (3 & 4 on sale). 5 was a serious disappointment. I should have waited and tried a pirated copy first.
In general, if something is good, I'll throw money at it whenever I can. Stellaris wound up in that pile, too, though I hadn't played it recently, so when I bought the whole collection it had some different mechanics to deal with now.
Do I think a brand-new release is worth $60+? Almost invariably 'no', but I accept some people do think it is. I'm willing to wager CDPR will present enough value, if not immediately, over the first six months or so that justify the expense. Especially if it's got decent mod support for the community. I'm still a bit bitter over Mass Effect: Andromeda, but I didn't pay for that one, it was a gift from a friend. I still feel bad he wasted good money on a bad product.
You created, you should be able to decide how it's consumed. If it costs you money in the long run that's on you. It's really that simple.
Have you ever wondered why you can find movies streamed, for free, supported by a few measly ads that are probably blocked anyway? Yet downloads and torrent links are mercilessly purged. The point is not making money anymore the point is control of content. Streaming sites go down or dcma links and they're gone, torrents cannot be shut down. By going easy on streaming sites they maintain some level of control over what shows you can access.
P.S. I'd bet it's also why you can find 480p direct downloads easier than 720p, it's left up as a sample/tiered pricing model.
An interesting facet you didn't mention is that when you pirate a game you have it forever. If Steam goes under, all of my games are probably going to stop working. And I paid for them.
Piracy is good for markets in places like India and the PRC but not so good for US coders.