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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
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.
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.
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.
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.
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.
Piracy is good for markets in places like India and the PRC but not so good for US coders.
Yeah, but that seems that will be an easy work around.
Most of the cracked Steam games that I have come across have just a modified DLL and EXE. Small amount of data that would be easy enough to trade around and hosted somewhere.
http://progressquest.com/spoltog.php?name=Son+Of+Son+Of+DarkRookie