8 ms·

Does Online Piracy Hurt The Economy? A Look At The Numbers

83 points by Kavan 15y ago

daintynews 15y ago
With sites like piratebay,org and btjunkie.org, in some sense, "show business" as an industry is affected. The number of people hitting the cinema would be less since most movie goers would just wait for the "copy" to be available for download. But the workers behind show business aren't really being let out by their employers, so I don't think it's such a huge problem.
- geuis 15y ago
  What you've said is completely annecdotal and completely wrong. As evidenced by the article from Forbes and the original article at Arstechnica, the number of movies being made and the number of people paying to see movies is higher than it was 10 years ago before file copying really got stated.
  - teamonkey 15y ago
    In the last few years there has been a big push in the movie industry to produce movies that are better in or more suited to the theatre than at home. 3D, Imax, etc. This is a direct response to piracy (and secondarily to people who wait to get the Blu-ray). I think it's misleading to say that the spread of piracy is responsible for increased revenues, when the products themselves have been changing in a direction designed to generate more revenue in the cinema.
    - daintynews 15y ago
      I completely agree. I'd like to point out as well that even movies that aren't supposed to be in 3D are now in 3D. So really, these sites are the are the sole reason of increased revenues
      - daintynews 15y ago
        I mean, not sole reasons
- Vivtek 15y ago
  most movie goers would just wait Wrong, wrong, wrong, wrong, wrong. Moviegoers love to go to movies, and movie downloaders are the same guys that wait a week in line for the new Star Wars. Perfect customers, in other words. Did you know our town had a second-run movie theater until last year? One of the last towns to have one. They were packed all the time - but the new owners of all the theaters in town closed it because people could watch movies on the cheap instead of paying eight bucks at the plex. Now everything's only open for about five weeks and is then gone forever. I'm a busy man. My schedule often required going to the second-run because I literally cannot focus on chunks of time of five weeks to see a movie. Now, my only recourse is to wait a year or so for the studios to release a version of that movie I can buy, or pirate it. Sometimes I pirate it, even though I freaking loathe Bittorrent and the hassle involved in finding a good pirate copy. But I don't have a choice. And I love movies. I love Pirates of the Caribbean - my wife actually saw the first one in the cinema nearly thirty times. Once she showed up five minutes late for the evening showing and the attendant just laughed and waved her into the theater instead of opening up the cash register again, knowing she'd be back the following night. So after it closed in the movie theater, I downloaded it to continue watching it - then we bought it as soon as they decided to sell it to us, wore out one copy, and bought another. Do you think I'm atypical? Yet Hollywood thinks I cheated them by downloading Pirates of the Caribbean. If movie attendance is down, it's not because people are waiting to see a pirated videocam version they downloaded, it's because real prices have doubled or tripled and people simply no longer have the money to go to the movies as often. In a recession, no less. Next the MPAA is just going to garnish everybody's wages on suspicion of piracy. (If they actually do that, please don't blame me for thinking of it first...)
  - batista 15y ago
    Wrong, wrong, wrong, wrong, wrong. Moviegoers love to go to movies, and movie downloaders are the same guys that wait a week in line for the new Star Wars. Perfect customers, in other words. I doubt those perfect customers are representative of the average movie goer. Surely very few people "wait a week in line for the new Star Wars".
    - yassim 15y ago
hxa7241 15y ago
Copyright economics has one basic question: is the public getting plenty of good 'content'? And this has two components: 1, is plenty of stuff being produced?; and 2, does the public have easy and cheap access to it? This is just the standard economic structure; look it up: http://cyber.law.harvard.edu/IPCoop/89land1.html http://cyber.law.harvard.edu/IPCoop/89land1.html Now we can see that the common statements about the 'problem' of piracy are misconceived (often deliberately of course). The only proper problem that could exist here is if the public are being poorly served: by insufficient content or expensive/difficult access. Industry bodies complain that their companies are 'losing' money. That is a nonsensical use of the word 'losing'. What they mean is they are not making as much as they think they should. But the purpose of copyright does not care about what they like to imagine, it cares about the two question above. If enough content is being produced, then by definition the companies producing it are being paid enough. (And piracy is actually a direct positive for the economy, since it helps with the second question: it gives the public better, cheaper access to content -- indeed, just what industry bodies have been obstructing by buying legislation.) So is there a decline of production? Well, those claiming, or rather implying, there is cannot provide any evidence, so why listen to them? And we can at least simply look around to get a rough idea. Do you feel there are less movies/music/books now, compared with say 10 years ago? That certainly does not seem very sensible. And another notable point is this: these industries say they have been suffering a terrible onslaught of piracy for about 10 years now, yet there appears to be no decline of production. Now there are two possible deductions from that: either they are talking nonsense, and/or the current level of copyright has been strongly proved to be unnecessary. If production has stayed sufficient, yet copyright has de facto been reduced, we obviously do not need that level of copyright.
- pwg 15y ago
  > Industry bodies complain that their companies are 'losing' money. That is a nonsensical use of the word 'losing'. What they mean is they are not making as much as they think they should. The above is such an important point that I felt it deserved it's own quote. The "loss" put forth by the entrenched media is not a "loss". Unfortunately, not enough people recognize their slight of hand in calling piracy a "loss"
annon 15y ago
I'd love to see how much the RIAA/MPAA claim that megaupload was costing them in piracy. Surely we'll see that money just come flying in now that megaupload has been shut down?
- yesbabyyes 15y ago
  $500 million according to what I've read, here in WSJ: http://online.wsj.com/article_email/SB10001424052970204616504577171060611948408-lMyQjAxMTAyMDEwOTExNDkyWj.html http://online.wsj.com/article_email/SB1000142405297020461650...
shingen 15y ago
The tech industry is harmed by piracy a zillion times greater than Hollywood ever has been or ever could be. Microsoft alone is pirated more than Hollywood in dollar terms. Yet the tech industry hasn't spent the last ten years trying to get vile bills like this passed. It's clearly because Hollywood is in trouble that they're scrambling. Same thing the recording industry did when they saw their own tombstone. Unfortunately Hollywood is even more powerful.
- pwg 15y ago
  "First they ignore you, then they ridicule you, then they fight you, then you win." Mahatma Gandhi (http://www.quotedb.com/quotes/2776 http://www.quotedb.com/quotes/2776) SPOA/PIPA seem to very firmly place the tech world into the "then they fight you" arena.
pwg 15y ago
Quote from the article: >because SoundScan data is markedly incomplete when it comes to the releases by indie artists who have benefited most from the rise of digital distribution. And that, right there, is the actual reason for the push by the big media giants. Piracy is simply the straw man used to get what they want past an unsuspecting public. What they fear most is the ability of the internet to allow artists to create and then __distribute__ without needing them (the existing media giants) to be gatekeepers and middlemen collecting their share of the revenue along the way. Watch this (14 minutes): http://www.ted.com/talks/lang/en/defend_our_freedom_to_share_or_why_sopa_is_a_bad_idea.html http://www.ted.com/talks/lang/en/defend_our_freedom_to_share... What they fear most is that you, the little guy, will be creative and distribute your creativity without involving them as the middlemen.
joejohnson 15y ago
A fun aside: if an article title ever asks a question, the answer is always "no". Otherwise, the headline would just read something like Online Piracy Does Hurt the Economy.
wtvanhest 15y ago
The majority of analysis on the economics of piracy are focused on record company profits in total. Does anyone know of any research on how the economics look for various groups of artists? ---- As an example: Artist A is a top rated multiplatinum artist Artist B is a touring, not so profitable but making a living artist --- Do the economics of the industry for each artist change as piracy becomes more and less prevalent? My gut is that artist B benefits as piracy becomes more prevalent because: 1) Artist B makes their money from touring so distribution is unimportant to them for profitability, rather distribution is a form of marketing. 2) Artist A loses because their distribution is more profitable (still not as profitable as touring for the artist) but their distribution funds their marketing. Are those 2 points true? I’m going on what I think, but may be off. More importantly I’d like to hear if anyone knows of any analysis performed on the different classes and how they are impacted by piracy? I would be willing to bet that if there are differences there are opportunities for niche business profits and if one wanted to make a good argument against anti-piracy legislation understanding those differences will be important for fighting those regulations.
pash 15y ago
Since the linked article is almost wholly a quote and rehash of Julian Sanchez's article for Ars Technica [1], why not just read that? 1. http://arstechnica.com/tech-policy/news/2012/01/internet-regulation-and-the-economics-of-piracy.ars http://arstechnica.com/tech-policy/news/2012/01/internet-reg...

83 points by Kavan 15y ago

With sites like piratebay,org and btjunkie.org, in some sense, "show business" as an industry is affected. The number of people hitting the cinema would be less since most movie goers would just wait for the "copy" to be available for download. But the workers behind show business aren't really being let out by their employers, so I don't think it's such a huge problem.

geuis 15y ago
What you've said is completely annecdotal and completely wrong. As evidenced by the article from Forbes and the original article at Arstechnica, the number of movies being made and the number of people paying to see movies is higher than it was 10 years ago before file copying really got stated.
- teamonkey 15y ago
  In the last few years there has been a big push in the movie industry to produce movies that are better in or more suited to the theatre than at home. 3D, Imax, etc. This is a direct response to piracy (and secondarily to people who wait to get the Blu-ray). I think it's misleading to say that the spread of piracy is responsible for increased revenues, when the products themselves have been changing in a direction designed to generate more revenue in the cinema.
  - daintynews 15y ago
    I completely agree. I'd like to point out as well that even movies that aren't supposed to be in 3D are now in 3D. So really, these sites are the are the sole reason of increased revenues
    - daintynews 15y ago
      I mean, not sole reasons
Vivtek 15y ago
most movie goers would just wait Wrong, wrong, wrong, wrong, wrong. Moviegoers love to go to movies, and movie downloaders are the same guys that wait a week in line for the new Star Wars. Perfect customers, in other words. Did you know our town had a second-run movie theater until last year? One of the last towns to have one. They were packed all the time - but the new owners of all the theaters in town closed it because people could watch movies on the cheap instead of paying eight bucks at the plex. Now everything's only open for about five weeks and is then gone forever. I'm a busy man. My schedule often required going to the second-run because I literally cannot focus on chunks of time of five weeks to see a movie. Now, my only recourse is to wait a year or so for the studios to release a version of that movie I can buy, or pirate it. Sometimes I pirate it, even though I freaking loathe Bittorrent and the hassle involved in finding a good pirate copy. But I don't have a choice. And I love movies. I love Pirates of the Caribbean - my wife actually saw the first one in the cinema nearly thirty times. Once she showed up five minutes late for the evening showing and the attendant just laughed and waved her into the theater instead of opening up the cash register again, knowing she'd be back the following night. So after it closed in the movie theater, I downloaded it to continue watching it - then we bought it as soon as they decided to sell it to us, wore out one copy, and bought another. Do you think I'm atypical? Yet Hollywood thinks I cheated them by downloading Pirates of the Caribbean. If movie attendance is down, it's not because people are waiting to see a pirated videocam version they downloaded, it's because real prices have doubled or tripled and people simply no longer have the money to go to the movies as often. In a recession, no less. Next the MPAA is just going to garnish everybody's wages on suspicion of piracy. (If they actually do that, please don't blame me for thinking of it first...)
- batista 15y ago
  Wrong, wrong, wrong, wrong, wrong. Moviegoers love to go to movies, and movie downloaders are the same guys that wait a week in line for the new Star Wars. Perfect customers, in other words. I doubt those perfect customers are representative of the average movie goer. Surely very few people "wait a week in line for the new Star Wars".
  - yassim 15y ago

hxa7241 15y ago

Copyright economics has one basic question: is the public getting plenty of good 'content'? And this has two components: 1, is plenty of stuff being produced?; and 2, does the public have easy and cheap access to it? This is just the standard economic structure; look it up: http://cyber.law.harvard.edu/IPCoop/89land1.html http://cyber.law.harvard.edu/IPCoop/89land1.html Now we can see that the common statements about the 'problem' of piracy are misconceived (often deliberately of course). The only proper problem that could exist here is if the public are being poorly served: by insufficient content or expensive/difficult access. Industry bodies complain that their companies are 'losing' money. That is a nonsensical use of the word 'losing'. What they mean is they are not making as much as they think they should. But the purpose of copyright does not care about what they like to imagine, it cares about the two question above. If enough content is being produced, then by definition the companies producing it are being paid enough. (And piracy is actually a direct positive for the economy, since it helps with the second question: it gives the public better, cheaper access to content -- indeed, just what industry bodies have been obstructing by buying legislation.) So is there a decline of production? Well, those claiming, or rather implying, there is cannot provide any evidence, so why listen to them? And we can at least simply look around to get a rough idea. Do you feel there are less movies/music/books now, compared with say 10 years ago? That certainly does not seem very sensible. And another notable point is this: these industries say they have been suffering a terrible onslaught of piracy for about 10 years now, yet there appears to be no decline of production. Now there are two possible deductions from that: either they are talking nonsense, and/or the current level of copyright has been strongly proved to be unnecessary. If production has stayed sufficient, yet copyright has de facto been reduced, we obviously do not need that level of copyright.

pwg 15y ago
> Industry bodies complain that their companies are 'losing' money. That is a nonsensical use of the word 'losing'. What they mean is they are not making as much as they think they should. The above is such an important point that I felt it deserved it's own quote. The "loss" put forth by the entrenched media is not a "loss". Unfortunately, not enough people recognize their slight of hand in calling piracy a "loss"

annon 15y ago

I'd love to see how much the RIAA/MPAA claim that megaupload was costing them in piracy. Surely we'll see that money just come flying in now that megaupload has been shut down?

yesbabyyes 15y ago
$500 million according to what I've read, here in WSJ: http://online.wsj.com/article_email/SB10001424052970204616504577171060611948408-lMyQjAxMTAyMDEwOTExNDkyWj.html http://online.wsj.com/article_email/SB1000142405297020461650...

shingen 15y ago

The tech industry is harmed by piracy a zillion times greater than Hollywood ever has been or ever could be. Microsoft alone is pirated more than Hollywood in dollar terms. Yet the tech industry hasn't spent the last ten years trying to get vile bills like this passed. It's clearly because Hollywood is in trouble that they're scrambling. Same thing the recording industry did when they saw their own tombstone. Unfortunately Hollywood is even more powerful.

pwg 15y ago
"First they ignore you, then they ridicule you, then they fight you, then you win." Mahatma Gandhi (http://www.quotedb.com/quotes/2776 http://www.quotedb.com/quotes/2776) SPOA/PIPA seem to very firmly place the tech world into the "then they fight you" arena.

pwg 15y ago

Quote from the article: >because SoundScan data is markedly incomplete when it comes to the releases by indie artists who have benefited most from the rise of digital distribution. And that, right there, is the actual reason for the push by the big media giants. Piracy is simply the straw man used to get what they want past an unsuspecting public. What they fear most is the ability of the internet to allow artists to create and then __distribute__ without needing them (the existing media giants) to be gatekeepers and middlemen collecting their share of the revenue along the way. Watch this (14 minutes): http://www.ted.com/talks/lang/en/defend_our_freedom_to_share_or_why_sopa_is_a_bad_idea.html http://www.ted.com/talks/lang/en/defend_our_freedom_to_share... What they fear most is that you, the little guy, will be creative and distribute your creativity without involving them as the middlemen.

joejohnson 15y ago

A fun aside: if an article title ever asks a question, the answer is always "no". Otherwise, the headline would just read something like Online Piracy Does Hurt the Economy.

wtvanhest 15y ago

The majority of analysis on the economics of piracy are focused on record company profits in total. Does anyone know of any research on how the economics look for various groups of artists? ---- As an example: Artist A is a top rated multiplatinum artist Artist B is a touring, not so profitable but making a living artist --- Do the economics of the industry for each artist change as piracy becomes more and less prevalent? My gut is that artist B benefits as piracy becomes more prevalent because: 1) Artist B makes their money from touring so distribution is unimportant to them for profitability, rather distribution is a form of marketing. 2) Artist A loses because their distribution is more profitable (still not as profitable as touring for the artist) but their distribution funds their marketing. Are those 2 points true? I’m going on what I think, but may be off. More importantly I’d like to hear if anyone knows of any analysis performed on the different classes and how they are impacted by piracy? I would be willing to bet that if there are differences there are opportunities for niche business profits and if one wanted to make a good argument against anti-piracy legislation understanding those differences will be important for fighting those regulations.

pash 15y ago

Since the linked article is almost wholly a quote and rehash of Julian Sanchez's article for Ars Technica [1], why not just read that? 1. http://arstechnica.com/tech-policy/news/2012/01/internet-regulation-and-the-economics-of-piracy.ars http://arstechnica.com/tech-policy/news/2012/01/internet-reg...