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."

Comments

Re: Didn't we knew that already?

[Scarletdown]

Heck, at a concert I attended a couple years ago in Boise, neither Tesla, REO Speedwagon, nor Def Leppard minded their fans recording throughout the concert. And I am pretty sure all three bands gained quite a few new fans that night, though probably not all that many for REO Speedwagon. The old geezers still have it, but they still seemed out of place between the other two.

Another thing I noticed were the T-shirt sales at the concert. It was a pretty clever technique they used too. There were vendors outside selling for half the price the vendors inside were asking. To some of us, it was obvious that they were expecting most customers to think the outside ones were bootlegs, while the ones inside were legitimate. And that netted them plenty of shirt sales from both buying demographics: the ones who don't care about bootleg or legit buy up the cheap ones; and the more "conscientious" buyers would wait and buy at double the price inside.

Sounds like something out of the Ferengi playbook. :)