If Piracy Were an Issue, Media Companies Would Change

[Fehmarn]

I live in an old house. It once had coal furnaces. Those were replaced with a central heating system - I feel no obligation towards the coal delivery companies, and I certainly will not give them any of my money. I have moved on and their business model has nothing to offer to me any more.

That, in a nutshell, is the dilemma of the content distribution business.

Trying to adapt to changing and evolving markets is a challenge. Not being able to meet the challenge they declare themselves "welfare mommies" - someone else should give them the framework to sustain their business model?

If you're not delivering the same amount of service as before - why should the asking price be the same? A book has, apart from the well deserved authors royalties, also the cost of fabrication, marketing and distribution factored in, as well as the cost for warehousing and last but not least the cost of up-fronting the capital for all of the before.

No printing, no binding, no transportation cost, diminished distro cost, no capital lockup in warehousing.
Sounds like a great way to get the same content out at much lower cost to the consumer, doesn't it?

Stephen King - "Der Anschlag" (Original title: 11/22/63: A Novel)
German Hardcover Ed. @ Amazon.de: € 26.99
German Kindle Editon @*Amazon.de € 21.99

Only 18.5% less - despite a vastly lesser cost base?

It gets worse:

Stephen King - "11/22/63: A Novel"
US Hardcover Ed. @ Amazon.de: $ 17.49
US Kindle Editon @*Amazon.de $ 16.17

Here the digital issue is only 7.5% below the print edition.

Who are they kidding. Lower cost, higher revenue and they eliminate the re-sale value to the buyer with the DRM nonsense?

I'm not convinced.

[stonetools]

Originally Posted by Belfaborac

I linked to that study, as well as others in this thread. Like I said there, every independent study I'm aware of concludes that pirates have either little, none or a positive impact on sales. (Snip)
All studies funded by MPAA, IFPI, etc. of course conclude otherwise, but that is to be expected. Personally I make it a point to ignore all "research" funded by an interested party, whatever the area, as I consider it inherently untrustworthy. Independent research or bust.

NO. I'm sorry but this is dead wrong . Maybe you missed my earlier post, so let me re-post:

The review, The Economics of Music File Sharing – A Literature Overview, by Peter Tschmuck (Microsoft Word version here), examines 22 studies which look at the effects of filesharing on the music industry. Because some are skeptical of industry generated studies, it should be pointed out that all the studies here are independent, academic studies — working papers, academic journal articles, and dissertations. Of these 22 studies, 14 — roughly two-thirds — conclude that unauthorized downloads have a “negative or even highly negative impact” on recorded music sales.2

Studies since Tschmuck’s only confirm these findings. One notable contribution is economist Stan Liebowitz’s study The Metric is the Message: How Much of the Decline in Sound Recording Sales is Due to File-Sharing? released in November 2011. In it, Liebowitz translates the conclusions of existing studies on the effects of unauthorized downloads on recorded music sales into a common metric to answer the question posed in his title.

His conclusion is stunning: “file-sharing has caused the entire decline in sound recording sales that has occurred since the ascendance of Napster.”

LINK

Looks to me like the MAJORITY of academic studies say that unauthorized downloads(piracy + casual sharing) is hurting the recording industry. One could even call it a consensus. Then there is the report of the General Accounting Office of the US government - the same administration that rejected SOPA, so there is no doubt of its even handedness.

Generally, the illicit nature of
counterfeiting and piracy makes estimating the economic impact of IP
infringements extremely difficult, so assumptions must be used to
offset the lack of data. Efforts to estimate losses involve
assumptions such as the rate at which consumers would substitute
counterfeit for legitimate products, which can have enormous impacts
on the resulting estimates. Because of the significant differences in
types of counterfeited and pirated goods and industries involved, no
single method can be used to develop estimates. Each method has
limitations, and most experts observed that it is difficult, if not
impossible, to quantify the economy-wide impacts. Nonetheless,
research in specific industries suggest that the problem is sizeable,
which is of particular concern as many U.S. industries are leaders in
the creation of intellectual property.

The GAO summary is full of qualifiers and criticisms of certain industry studies, but their conclusion is that piracy is a problem.

Whats interesting is that why many, many piracy-friendly posters could ever say stuff like " there's no evidence that piracy is a problem" and "independent studies confirm that piracy causes no harm" .
I believe its confirmation bias . You come to a conclusion that you like ("Piracy-no problem!"), then you look ONLY for confirming evidence ( read only Ars Technica, Torrent Freak, Teleread, and such piracy-friendly blogs). Finally, you take it as a given that your comforting conclusion is undisputed truth, and "objective " observers could only see it your way.
Look , it would be nice if we lived in a world of unicorns and rainbows, where piracy isn't a problem. But here on Earth Prime , it actually is and you don't have to be a servant of the content industries to understand this.

[anamardoll]

Originally Posted by taosaur

We don't "accept" it because it's a gross oversimplification of tectonic shifts in information technology, and it serves no purpose in the discussion. It's a red herring stapled to a goat that media companies would like to drive out of the village, which makes a lovely circus act but solves nothing.

That, and correlation is not causation. I mean, this is something I wish they would teach more often. Otherwise, people are going to start genuinely believing that piracy and global warming actually are related.

http://borkweb.com/story/global-warm...ation-decrease

[stonetools]

There hasn't been a decline in the music industry, there's been a decline in recorded music sales. The drop off in recorded music sales in 1999 also corresponds rather nicely with the major record labels being charged with illegal price fixing in that year; generally revenues fall when you're forced to stop price fixing.

Wow, now if there was just some independent study to support your supposition. But the independent studies show otherwise.

I must say that I find it astonishing that someone who styles himself Ninjalawyer should be so friendly to massive violation of the laws or should be so dismissive of the idea that IP rights should be protected. I understand that most posters are simply consumers. They don't understand that without secure IP property rights, content creators won't create , and that arts and science will not flourish . The founding fathers understood that, and thought it so important that they put it in the Constitution. You should understand that too.

[mr ploppy]

Originally Posted by l_macd

That works in general, but the fact is there are plenty of people out there who are happy to take everything they can get for nothing (the actual cost is irrelevant), and have absolutely no misgivings about it.

It's more of a shift in the way people consume entertainment. The internet shares a lot of the blame for that, but probably not in the way you think. People have got used to free content supported by advertising being available whenever they want it, and it is the instant accessibility that matters to them, not any potential saving in money.

The corporations, meanwhile, want people to have access to digital entertainment when they decide to make it available, with the result that people who would have been prepared to pay for it turn to pirate sites instead. While there they see all this other stuff they can have for free so they download it, and it all ends up as an exercise in collecting computer files that they never get around to looking at/listening to.

When you add up the costs of faster than otherwise necessary internet connection and blank media costs for all the computer files they are collecting, it would add up to a lot more than it would cost them to just buy the products they actually do want to look at/use.

But one thing digital priacy can definitely be blamed for is all the hardware devices that have been created specifically to play unauthorised digital content on. DivX players, mp3 players, ebook readers, none of those would have existed if it wasn't for piracy.

[Ninjalawyer]

Originally Posted by stonetools

Wow, now if there was just some independent study to support your supposition. But the independent studies show otherwise.

There are in fact independent studies that support my position, a fact that is obvious from the literature review you quote if you'd bothered to go through it. In the literature review, 22 studies were looked at, 14 of which concluded that piracy had a negative impact on sales, 3 of the studies found no significant impact while the remaining five found a positive impact on sales.

Of course, that's all a bit irrelevant. I've never actually said there's no impact on piracy. I've always maintained that piracy is mainly the result of under-served customers by entertainment industries that are having trouble keeping pace with technology change. Piracy is a problem (the extent of which is highly debatable as show by the study you quote), but I don't necessarily think intrusive laws are the right answer; legislation in general is a heavy hammer, and shouldn't be the go-to response for every problem.

In addition, there's a report here that shows that people are spending more money then ever on the entertainment industry. I add this only to put this debate in the proper context - i.e. that for all the entertainment industry's whining about piracy, they're actually making more money than ever.

And since studies are fun and quoting them is even more fun, a very recent, very comprehensive Canadian study (found here) stated the following with respect to the effectiveness of tougher laws in developing countries (the focus of the study):

[U]Invariably, industry groups invoke similar arguments on behalf of stronger enforcement: lower piracy will lead to greater investment in legal markets, and greater investment will lead to economic growth, jobs, innovation, and expanded access. This is the logic that has made intellectual property a central subject of trade negotiations since the 1980s. But while we see this mechanism operating in some contexts in emerging markets, we think that other forces play a far larger role.

The factor common to successful low-cost models, our work suggests, is neither strong enforcement against pirates nor the creative use of digital distribution, but rather the presence of firms that actively compete on price and services for local customers.

The report is over 400 pages, but it's actually not too much of a slog; I'd recommend it everyone give at least some of it a read.

And finally, this scathing commentary:

Originally Posted by stonetools

I must say that I find it astonishing that someone who styles himself Ninjalawyer should be so friendly to massive violation of the laws or should be so dismissive of the idea that IP rights should be protected. I understand that most posters are simply consumers. They don't understand that without secure IP property rights, content creators won't create , and that arts and science will not flourish . The founding fathers understood that, and thought it so important that they put it in the Constitution. You should understand that too.

Being a lawyer doesn't make you supportive of all laws, even bad ones. In fact, being well-acquainted with the legal system generally provides a good understanding of the costs and benefits of new laws and enforcement initiatives. I'm not going to address the rest of the above comment since it's mainly fluff (assuming a conclusion while giving a quick shout-out to your founding fathers).

[Belfaborac]

Originally Posted by stonetools

NO. I'm sorry but this is dead wrong

No need to be sorry, but even if you are it actually it isn't wrong at all.

What I said was: "every independent study I'm aware of concludes that pirates have either little, none or a positive impact on sales."

I've underlined the important parts. Firstly: independent. To repeat: research that is funded by an interested party is worthless, or very often worse than worthless, in that it is often commissioned purely to obfuscate the issue.

Secondly: [that] I'm aware of. I have obviously not read every independent study, but I have perused all those most well known and many not so well known. In regards to all those I have come across, been made aware of, or unearthed myself (probably 30-35 in all) every one has concluded as I stated.

In other words: not dead wrong at all.

As far as the document you link to, I've no idea if it is in fact an independent study in itself. Hence I have no way of determining whether or not is has any value (according to my own standards). I can no doubt find out by doing a little digging, but not right now.

Secondly I have no way of reading the vast majority of the sources it lists and hence I can verify neither their quality, their conclusions, nor their independence for myself. Just saying they're independent does not make them so.

Finally and most peculiarly: none of the most publicised independent studies are are among those listed among Dr. Tschmuck's references. It can hardly be an oversight, so presumably it must be by design. I find this very strange, if not outright suspect.

His conclusion is stunning: “file-sharing has caused the entire decline in sound recording sales that has occurred since the ascendance of Napster.”

Now, I've yet to do more than skim the document, but if that is an accurate description then it's obviously an entirely bogus study. No-one in their right mind could possibly present such a patently laughable conclusion, disregarding entirely every point which has previously been mentioned in this thread and many more besides, thereby apparently wilfully ignoring the digital revolution which has taken place over the last decade in its entirety.

Looks to me like the MAJORITY of academic studies say that unauthorized downloads(piracy + casual sharing) is hurting the recording industry. One could even call it a consensus.

Hardly. My points still stand, comfortably.

Whats interesting is that why many, many piracy-friendly posters could ever say stuff like " there's no evidence that piracy is a problem" and "independent studies confirm that piracy causes no harm".

Etc, etc.

These are just assumptions made with no basis in fact and as such are worthless. Simplistic pop psychology, based on nothing more than what you yourself would like to believe.

Personally I am neither for or against piracy, just like I am neither for or against gravity. The two are almost equally inevitable and almost equally pointless to attempt to negate. If piracy could be stopped completely, or even substantially, I would have no issue with that whatsoever, but neither will ever happen.

What I am against is what I am convinced (partly on the basis of all the independent research I've read) are the blatant lies told by those who sell us entertainment and who wish to adopt draconian measures in order to ensure their survival, rather than to evolve with the times.

[stonetools]

OK, I'm going to pass over whether you established that independent studies actually supported your specific claim.

Of course, that's all a bit irrelevant. I've never actually said there's no impact on piracy. I've always maintained that piracy is mainly the result of under-served customers by entertainment industries that are having trouble keeping pace with technology change. Piracy is a problem (the extent of which is highly debatable as show by the study you quote), but I don't necessarily think intrusive laws are the right answer; legislation in general is a heavy hammer, and shouldn't be the go-to response for every problem.

I find it strange that you think that legislation and law enforcement has no place in a response to what after all are violations of the law . IP rights are , after all, PROPERTY RIGHTS: and when my property rights are violated, (say if I am burglarized)I call for a police officer (what do you do?).
The Obama Administration in its SOPA response, had this to say , on piracy and the need for legislation:

Let us be clear—online piracy is a real problem that harms the American economy, threatens jobs for significant numbers of middle class workers and hurts some of our nation's most creative and innovative companies and entrepreneurs. It harms everyone from struggling artists to production crews, and from startup social media companies to large movie studios. While we are strongly committed to the vigorous enforcement of intellectual property rights, existing tools are not strong enough to root out the worst online pirates beyond our borders. That is why the Administration calls on all sides to work together to pass sound legislation this year that provides prosecutors and rights holders new legal tools to combat online piracy originating beyond U.S. borders while staying true to the principles outlined above in this response. We should never let criminals hide behind a hollow embrace of legitimate American values.

This is not just a matter for legislation. We expect and encourage all private parties, including both content creators and Internet platform providers working together, to adopt voluntary measures and best practices to reduce online piracy.

LINK

Now in agreement with you it calls for more than just law enforcement and legislation. But it does say new legislation is needed.
As to the study you cited, here is another lawyer 's response , from the same source:

Some point to the 400+ page Media Piracy in Emerging Economies report, released in 2011 by the Social Science Research Council and funded by the Ford Foundation, as providing evidence that enforcement “doesn’t work.” But that’s not what the report concludes, as the editor of the report itself, Joe Karaganis, pointed out in a Torrentfreak article last week:

We talk about the efficacy of enforcement at some length in our Media Piracy report. Many readers have concluded that enforcement doesn’t work. But that isn’t what we say. We say, rather, that we’ve found no evidence that it has worked.

It’s also important to note what the report researchers looked at to come to that conclusion: the research was primarily qualitative rather than quantitative, relying on interviews, focus groups, and analysis of media reporting.

That said, this is but one study. Other researchers have found evidence that enforcement has led to increases in legal purchases of music.

In a paper released last week, Dr. George Barker of Australian National University analyzed the data from a 2006 Industry Canada survey to conclude that “P2P downloads have strong negative effects on legitimate music purchases” and “stronger copyright laws would substantially increase music purchases and music industry sales revenues.”

These findings are confirmed by another recent study by four economists from Wellesley College and Carnegie Mellon University, which determined that France’s graduated response program (Hadopi) caused “iTunes song and album sales to increase by 22.5% and 25% respectively relative to” countries in a control group that hadn’t enacted graduated response programs.

You are right that it shouldn't be the only response , or even the first response. That said, we are 15 years into the era of mass Internet piracy. Clearly, something legal needs to be done.

[Belfaborac]

Originally Posted by stonetools

OK, I'm going to pass over whether you established that independent studies actually supported your specific claim.

Whether you're addressing Ninjalawyer or myself, why don't you simply read the linked studies and see for yourself?

[Andrew H.]

Originally Posted by Belfaborac

No need to be sorry, but even if you are it actually it isn't wrong at all.

What I said was: "every independent study I'm aware of concludes that pirates have either little, none or a positive impact on sales."

I've underlined the important parts. Firstly: independent. To repeat: research that is funded by an interested party is worthless, or very often worse than worthless, in that it is often commissioned purely to obfuscate the issue.

Secondly: [that] I'm aware of. I have obviously not read every independent study, but I have perused all those most well known and many not so well known. In regards to all those I have come across, been made aware of, or unearthed myself (probably 30-35 in all) every one has concluded as I stated.

In other words: not dead wrong at all.

Well, it is curious that you managed to look at 35 studies and not find any of the ones that disagree with your position.

As far as the document you link to, I've no idea if it is in fact an independent study in itself. Hence I have no way of determining whether or not is has any value (according to my own standards). I can no doubt find out by doing a little digging, but not right now.

Or you could read the linked article "all the studies here are independent, academic studies — working papers, academic journal articles, and dissertations."

Secondly I have no way of reading the vast majority of the sources it lists and hence I can verify neither their quality, their conclusions, nor their independence for myself. Just saying they're independent does not make them so.

Finally and most peculiarly: none of the most publicised independent studies are are among those listed among Dr. Tschmuck's references. It can hardly be an oversight, so presumably it must be by design. I find this very strange, if not outright suspect.

Maybe because he limited himself to academic studies?

Now, I've yet to do more than skim the document, but if that is an accurate description then it's obviously an entirely bogus study. No-one in their right mind could possibly present such a patently laughable conclusion, disregarding entirely every point which has previously been mentioned in this thread and many more besides, thereby apparently wilfully ignoring the digital revolution which has taken place over the last decade in its entirety.

It looks more like you are intentionally disregarding any data which contradicts your preferred piracy-denier world view. Even purely academic papers. Why even pretend that you are interested in what the research actually shows?

[snip]
What I am against is what I am convinced (partly on the basis of all the independent research I've read) are the blatant lies told by those who sell us entertainment and who wish to adopt draconian measures in order to ensure their survival, rather than to evolve with the times.

All of the independent research you've read which somehow missed the research contrary to your pre-existing opinion.

[BillSmithBooks]

despite the (debatable) effects of piracy, the music industry is larger than ever:


http://www.techdirt.com/skyisrising/

More revenue, more total sales...the biggest change is that people buy a lot more singles now because they've realized that most albums are 2 good singles with 8-12 songs of filler.

Video games, film, TV and books are also substantially bigger than ever despite the so-called crippling effects of piracy. Really, I wish I should be so lucky as these schmoes.

[Belfaborac]

Originally Posted by Andrew H.

Well, it is curious that you managed to look at 35 studies and not find any of the ones that disagree with your position.

30-35 (probably) independent studies. I've read more studies than that, but once again: if they're not independent, they're worthless. There are a large number of studies out, funded directly or indirectly by the industry, but I see no reason reading any more than I have done, seeing as their conclusions can be predicted with an accuracy of close to 100%.

Or you could read the linked article "all the studies here are independent, academic studies — working papers, academic journal articles, and dissertations."

I don't believe things just because I read them somewhere.

Maybe because he limited himself to academic studies?

Most amusing. Would you care to elucidate on why the studies I've linked to should not be considered "academic"?

It looks more like you are intentionally disregarding any data which contradicts your preferred piracy-denier world view. Even purely academic papers. Why even pretend that you are interested in what the research actually shows?

Because I am interested.

Once I come across a verifiably independent study which concludes that piracy is a significant problem, I'll happily both read it and link to it in further debates. Should the number of such studies ever reach the number which today concludes otherwise, then I'll happily begin to re-evaluate my stance.

All of the independent research you've read which somehow missed the research contrary to your pre-existing opinion.

Once again, not true. See above.

[stonetools]

ersonally I am neither for or against piracy, just like I am neither for or against gravity. The two are almost equally inevitable and almost equally pointless to attempt to negate. If piracy could be stopped completely, or even substantially, I would have no issue with that whatsoever, but neither will ever happen.

What I am against is what I am convinced (partly on the basis of all the independent research I've read) are the blatant lies told by those who sell us entertainment and who wish to adopt draconian measures in order to ensure their survival, rather than to evolve with the times.

Well, I'm going to take you at your word that you simply didn't research the issue. You did what most do: you read the position that you liked and concluded that this position was right .
Do the content creator advocates exaggerate claims of damages? Sure they do. BOTH sides exaggerate: the content creator advocates and the piracy advocates who claim that piracy is harmless or beneficial. However, both the GAO and the scholarly consensus have concluded that piracy is indeed harmful-though to a lesser extent than claimed by industry advocates.
Faced with that evidence, my approach is to keep on open mind, but to accept the scholarly consensus going forward. ( That's my approach to all kinds of disputed factual issues , from evolution to climate change). if the scholarly consensus changes, then I'll happily go over to the pro piracy side. Hey , its the most convenient side-download stuff for FREE!! What could go wrong? Of course, what's convenient in short term usually is bad long term. Its what I call the passenger pigeon problem.
In the 19th C, the passenger pigeon was the most abundant bird in North America. Its flocks darkened the sky.What could possibly be wrong with shooting all the passenger pigeons you could want, for fun and profit? The hunters resisted conservation laws as an unreasonable and unenforceable restriction on their " rights". And so the good times lasted-right up until the year when the passenger pigeon flocks did not come.
Right now we live in a society where artists can freely create and distribute works for a living. We take that living away and just as the passenger pigeon flocks melted away, so too will the artists and their works

[stonetools]

Originally Posted by Belfaborac

Whether you're addressing Ninjalawyer or myself, why don't you simply read the linked studies and see for yourself?

Actually, I was trying to be nice-its clear that studies cited do not establish Ninjalawyer's claim that the decline in music industry revenues had anything to do with any price fixing case.

[Belfaborac]

Originally Posted by stonetools

Well, I'm going to take you at your word that you simply didn't research the issue. You did what most do: you read the position that you liked and concluded that this position was right .

You're good with those baseless suppositions. Do keep it up.