Study: Piracy Doesn't Harm Digital Media Sales 173
r5r5 writes "European Commission's Institute for Prospective Technological Studies has published a study which concludes that the impact of piracy on the legal sale of music is virtually nonexistent or even slightly positive. The study's results suggest that Internet users do not view illegal downloading as a substitute for legal digital music and that a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchase websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting a complementary relationship between these two modes of music consumption. According to the results, a 10% increase in clicks on legal streaming websites leads to up to a 0.7% increase in clicks on legal digital purchase websites."
It's worth noting that this study only measured the effect of piracy on online purchases, not on revenue from physical formats.
and (Score:5, Insightful)
the recording industries will simply stick their fingers in their ears whilst singing "nanananananana"
Re:This was proven years ago... (Score:4, Insightful)
Re:A bit late (Score:5, Insightful)
Yes, but they also want to make sure you can't sell it later, and keep you from getting refunded by retaining the power to remove your license at any time.
EA wasn't out to stop pirates, they were out to manipulate and screw over the customers.
correlation/causation (Score:3, Insightful)
a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchase websites
uh oh, cue the correlation/causation nazis. ok, i'll go first. just cuz thy measured a 10% increase in pirate clicks and an 0.2% increase in legal purchase clicks doesn't mean there is a connection. Heck, perhaps if there had been fewer pirate clicks then there would have been more legal clicks! Also, what the heck is a click? shouldnt the metric be downloads or purchases?
Re:Only when file sharing is illegal. (Score:5, Insightful)
Don't spread the MAFIAA's FUD for them. File sharing is already legal. "File sharing" and "copyright infringement" are not the same thing.
Re:Only when file sharing is illegal. (Score:5, Insightful)
I'm not defending MAFIAA in any way, but just want to point out, that the study was conducted under circumstances when file sharing is illegal.
If it becomes legal, it may very well impact the sales in a negative way. Bottom line: interesting study, no practical applications.
This doesn't necessarily mean that sharing music should become legal, it just means that it shouldn't be life-ruiningly-illegal. Speeding is illegal, but if you get caught you just get a small fine and life goes on. They don't fine you more than 10x your yearly income and stick you with legal fees that could bankrupt CEOs.
Re:This was proven years ago... (Score:4, Insightful)
Another issue is that because some people, like many in China, illegally download music because they cannot afford to purchase legitimate copies, not every illegal download necessarily equates to a lost sale. This has some effect on music sales, but as Lawrence Lessig points out, there is wide asymmetry between the estimated volume of illegal downloading and the projected loss of sales:
“In 2002, the RIAA reported that CD sales had fallen by 8.9 percent, from 882 million to 803 million units; revenues fell 6.7 percent. This confirms a trend over the past few years. The RIAA blames Internet piracy for the trend, though there are many other causes that could account for this drop. SoundScan, for example, reports a more than 20 percent drop in the number of CDs released since 1999. That no doubt accounts for some of the decrease in sales... But let’s assume the RIAA is right, and all of the decline in CD sales is because of Internet sharing. Here’s the rub: In the same period that the RIAA estimates that 803 million CDs were sold, the RIAA estimates that 2.1 billion CDs were downloaded for free. Thus, although 2.6 times the total number of CDs sold were downloaded for free, sales revenue fell by just 6.7 percent... So there is a huge difference between downloading a song and stealing a CD."
Re:This was proven years ago... (Score:5, Insightful)
... as I recall.
A few years ago I found a magazine article about music "piracy" from 1981. Back in those days most of the technology we use today didn't exist. Almost no one had a computer, there was no Internet (as we know it today), etc.
The villain back then, according to the RIAA was cassette tape recorders -- people were making tapes of their friends albums rather than buying them. So the RIAA commissioned a study that they hoped to take to Congress to convince them that they needed new laws to combat this terrible problem. But the report was shelved and never widely publicized because it showed that people who owned high end cassette decks, on average, bought 75% more albums than people who didn't.
The more things change, the more they stay the same.
Re:Only when file sharing is illegal. (Score:4, Insightful)
Shagg's comment is valid because the MPAA and RIAA don't seem able to make the distinction.
If I rip a DVD that I purchased to a computer I own, that could be considered file sharing. The DVD has shared the file with the computer, but I have not infringed a copyright. If I transfer that digital copy to my tablet or smartphone so that I can watch it during a flight, also file sharing, still not infringing.
If I use the copy on my computer to burn physical DVDs and begin selling them, THAT is a copyright infringement
The powers that be, via DMCA, seek to outlaw all of these practices, and many more.
Re:This was proven years ago... (Score:3, Insightful)
Why do I suspect that those with the 2.1 billion downloaded CDs would be listening to the radio instead of purchasing a CD if downloading them was not an option.
You're exactly right. All of the Media Cartel's claims of lost revenue are based on a fallacy - that every song/movie downloaded equals a lost sale. No matter how many times this is shown to be false, they keep repeating the same lie over and over. Considering the number of times that the Record/TV/Movie companies have cheated artists out of money, this is not surprising.
Only commercial piracy should be illegal (Score:2, Insightful)
Everyone understands that it's wrong when a commercial outfit pirates and sells music or films for their own profit. Only they themselves would object to it being illegal.
But non-commercial media sharing is in a very different category to that. The sharing that kids do on the Internet is just today's counterpart to what we used to do as kids back in the day, copy our records onto cassette tape for our friends, and it's certainly not criminal activity.
It was free promotion back then, and it's free promotion now when done on the Internet too. The labels should be overjoyed that promotion is being done for them, for free. Once fans become fans, they will end up buying the official versions too, because that's what fans do. But without the free initial exposure, they won't become fans in the first place.
Interesting data, but doesn't support conclusion (Score:4, Insightful)
Yeah. Their data does not support their conclusions.
First, note that their conclusion was that there is "essentially zero" correlation between illegal downloads and legal downloads. The correlation they found (for every 100 people who illegally download, 2 of them will go on to legally download the music) is insignificant (and "essentially zero" is their phrase, not mine.)
What they don't measure, though, is what would have been purchased if pirate downloads had not been available. They do say, however, that 20% of the people who clicked on pirate download sites never went to legal download sites, not ever once. If even one in ten of these people would have bought a legal download if they couldn't get the illegal one, that would wash out their 0.2 percent positive correlation entirely, not even thinking about the remaining 80% who sometimes looked at legal sites but ended up downloading from pirate sites. What fraction would have bought music legally if pirate downloads weren't available? I don't know-- but neither do they.
Re:This was proven years ago... (Score:3, Insightful)
Let me know if you run into any of those classical economies. The one we're in is anything but.
"Supply and demand" are relics of the Industrial Revolution. Few of the really big industries (and especially ones that have to do with virtual property) show any "supply and demand" effect any more. And what constitutes "supply" when you're talking about digital information? I assure you, there has never been a shortage of people making music. And there's no shortage of ones and zeros, so... by my back of the envelope calculations, the actual retail price of an mp3 of a pop song should be much closer to $.0001 than to $.99.
Re:This was proven years ago... (Score:4, Insightful)
And our government is absolutely willing to believe whatever the entrenched industry tells it. No matter what evidence to the contrary they are presented.
It's the way faith-based governments work. Just have faith in the lobbies with the most money, and that money will be transferred to you.