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

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: <a href="http://cyber.law.harvard.edu/IPCoop/89land1.html" rel="nofollow">http://cyber.law.harvard.edu/IPCoop/89land1.html</a><p>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.<p>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 <i>think they should</i>. 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.<p>(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.)<p>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 <i>seem</i> very sensible.<p>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 <i>need</i> that level of copyright.

Quote from the article:<p>&#62;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.<p>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.<p>Watch this (14 minutes): <a href="http://www.ted.com/talks/lang/en/defend_our_freedom_to_share_or_why_sopa_is_a_bad_idea.html" rel="nofollow">http://www.ted.com/talks/lang/en/defend_our_freedom_to_share...</a><p>What they fear most is that you, the little guy, will be creative and distribute your creativity without involving them as the middlemen.

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?<p>----<p>As an example:<p>Artist A is a top rated multiplatinum artist<p>Artist B is a touring, not so profitable but making a living artist<p>---<p>Do the economics of the industry for each artist change as piracy becomes more and less prevalent?<p>My gut is that artist B benefits as piracy becomes more prevalent because:<p>1) Artist B makes their money from touring so distribution is unimportant to them for profitability, rather distribution is a form of marketing.<p>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.<p>Are those 2 points true? I’m going on what I think, but may be off.<p>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.

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 <i>Does</i> Hurt the Economy.

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?

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?<p>1. <a href="http://arstechnica.com/tech-policy/news/2012/01/internet-regulation-and-the-economics-of-piracy.ars" rel="nofollow">http://arstechnica.com/tech-policy/news/2012/01/internet-reg...</a>

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.

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.