Piracy and Profit

Lago PARANOIA · Post by **Lago PARANOIA** » Thu Jan 12, 2012 10:53 pm

I'm not making nor asking for a moral argument here. What I want to know is:

How can most of the major segments of the entertainment industry (video games, music, cinema once you include DVD sales, etc.) be having record profits/viewership while piracy is at its all time heights?

Does that imply that the industries would be even more profitable without piracy? That piracy actually helps make these industries profitable? Or that the net effect of piracy is neutral? Help me out, here.

Juton · Post by **Juton** » Thu Jan 12, 2012 11:05 pm

It's my understanding that piracy generally has a neutral or even beneficial effect on sales. The thinking is, if a person has X dollars they are going to spend on entertainment then they are going to spend about X dollars on entertainment. If that person pirates media then they are going to go out a purchase the media they like best, either to get a better copy or to support the creators.

Even if SOPA works beyond the corporation's wildest dreams it won't really increase revenue. Entertainment is a pretty low priority when you think about it, if a person has X dollars to spend on entertainment that is probably the money they have left after tending to the necessities. It may actually hurt sales, the former pirates may not want to shell out $11 for a movie ticket if they don't know the movie is any good.

angelfromanotherpin · Thu Jan 12, 2012 11:08 pm

I don't know if the exact details are available, but piracy seems to equal more sales. My guess would be because it is essentially advertising.

Ikeren · Post by **Ikeren** » Fri Jan 13, 2012 12:41 am

I was reading a study the other day that found media consumption begets media consumption, and that the highest consumers stayed high consumers, and the lowest consumers slowly grew over time.

Torrenting is a form of media consumption, and leads to more desire for media. Larger percentages of disposable income go towards media.

DSMatticus · Post by **DSMatticus** » Fri Jan 13, 2012 12:46 am

There aren't any real examples of piracy hurting sales, and indeed, lots of indie (apps, games, musicians) developers have come out and said, "they started pirating my shit and after that I made a lot of money." For more obscure products, it works exactly like free advertising.

I suspect the entertainment industry is absolutely terrified of the digital age in general because it is a threat to the publisher-level dominance that pervades the industry. The massive publishing companies are fighting for the continued existence of their highly lucrative jobs. Copyright and media and consumer-driven art can totally survive the digital age and piracy, but the publishers can't so they will, with a straight face, tell you piracy is destroying their businesses while posting record profits (probably discarding the latest depression).

Parthenon · Post by **Parthenon** » Fri Jan 13, 2012 1:22 am

It's also another way to pretend that "Hollywood accounting" isn't the complete bullshit it actually is. Hugely successful films that cost say, $1.3million to produce and advertise and made $2.5million can through 'creative' accounting somehow end up as a loss.

Supposedly, only 5% of films report a net profit, so if they can blame piracy instead of blatantly bullshit accounting they can get away with more.

Josh_Kablack · Post by **Josh_Kablack** » Fri Jan 13, 2012 1:32 am

Here's a soundbyte:

Which game got bigger market share: Doom or Spore?

Stahlseele · Post by **Stahlseele** » Fri Jan 13, 2012 1:53 am

Furthermore, the content mafia is mostly responsible for the "piracy" in the first place.
They distribute the P2P Software. They HOST the P2P Software. They even distribute some of their content themselves for download, without taking money for it.
And they teach and tell people how to do the P2P Stuff too.
And then they turn around and sue you for doing what they equipped you for, what they tought you how to do.

Here, it's a bit better explained than i could do it: http://www.youtube.com/watch?v=WJIuYgIv ... r_embedded
Even if he is slightly too energetic for my liking . .

CatharzGodfoot · Post by **CatharzGodfoot** » Fri Jan 13, 2012 2:50 am

I buy about a third to half of the music I pirate, which is way more music than I would be buying if I wasn't pirating music. If I didn't pirate it first, how would I know that I like it enough to buy (or even know that it exists)? Around here, radio stations don't play most of the stuff I listen to, because I have fairly mainstream tastes and am not a hillbilly.

If I wasn't pirating music, I doubt I would have bought a single album in the last five years.

PhoneLobster · Post by **PhoneLobster** » Fri Jan 13, 2012 2:53 am

The Content Mafia can now rest easy, major torrent search sites have finally seen the light and are finally equipping themselves with the staff they need to fight and win the war on Piracy!

Job Posting: Anti-Piracy Programmer
isoHunt is the most comprehensive BitTorrent search engine on the interwebs. It comes as no surprise that losers online share links of copyleft and copyright materials which isoHunt indexes, both in indiscriminate amounts. Each possible infringement from such links are worth tens of thousands of dollars in statutory damage. With 166.2 million files indexed within torrent links on isoHunt, the amount of potential claim is worth TRILLIONS of dollars.

However, the conundrum isoHunt faces is determining who owns copyright over what files are described within torrent files that isoHunt indexes, and what are the wishes of these copyright holders. Is a file's copyright owned by hippies such as Richard Stallman and similar Free Software gang with these ridiculous beards? Or socialist commies such as these filmmakers posting free films and shows at Vodo, (absurd, I know) and similarly free music at Jamendo, and any other sites hosting such so-called copyleft non-sense? Or such copyright holders, whoever they are, hang on to their copyright as they rightfully should and intend on suing any who infringes on their copyright? Afterall, victories in court or settlements are worth more than customers. These copyright holders are our friends and isoHunt seek your expertise in bringing copyright thieves to justice. And profit.

Candidates for a position as Senior Architect and Programmer for Anti-Piracy has the following requirements:

* Semantically determine from names of file listings within close to 7 million .torrents isoHunt indexes, the following: copyright holder of such files, and metadata on the copyright status of such files
* isoHunt do not host or have access to such files (isoHunt can't be a hypocrite and download these files like all the pirates do), so your job it is to determine the above by solely file names
* No master database referencing copyright ownership and status with files shared on P2P networks currently exist, so your job it is to build such a database
* Desired, but not required: to determine names and addresses of pirates participating in the piracy of copyrighted works, for law enforcement purposes (not those owned by copyleft hippies, after having determined copyright status of files). Note that IP addresses does not suffice, even a child can copy out IP addresses of fellow pirates in his BitTorrent client.
* 30+ years experience in C++, Java, Python, Perl, TCP/IP, BitTorrent protocols, and strong magic are required for this job.

Should you qualify, please reply ASAP. Trillions of dollars of profit await, and your compensation will be almost as impressive.

LargePrime · Post by **LargePrime** » Fri Jan 13, 2012 3:31 am

You hear songs for free on the radio, how does that effect profit?

"Pirating" content is far more about exposure and not at all about theft. If most pirates had to pay for content they saw, the distributors would actually lose money, because most of them would demand most of their money back, and that costs them money.

If any of you consume such media you know you have been exposed to and consumed things you would never had paid for. Is some cases you find treasure. When you do you share. And sharing is what it is really all about. "Pirating" was the beginning of what we now call social media, and the 'social' is still a big deal.

In "High output management" Andy talks about giving his legal team quotas. Pissed a lot of people off when it was in his book, but you have to understand that is how law departments are run now. And that explains the collective 'middle mans' response to file sharing.

RobbyPants · Post by **RobbyPants** » Fri Jan 13, 2012 2:18 pm

CatharzGodfoot wrote:I buy about a third to half of the music I pirate, which is way more music than I would be buying if I wasn't pirating music. If I didn't pirate it first, how would I know that I like it enough to buy (or even know that it exists)? Around here, radio stations don't play most of the stuff I listen to, because I have fairly mainstream tastes and am not a hillbilly.

If I wasn't pirating music, I doubt I would have bought a single album in the last five years.

I don't pirate my music, but I do buy it on iTunes because I can preview it. It's basically the same concept you mentioned. Before I was using iTunes, I'd rarely buy albums. Now, I can figure out what I do and don't like before hand, and the only difference between the two is I don't have a song sitting on my hard drive that I never listen to.

Pseudo Stupidity · Post by **Pseudo Stupidity** » Fri Jan 13, 2012 3:06 pm

I used to pirate a bit, a few movies that I wasn't too sure of and pretty much all (30 or so) songs that I really wanted to listen to. I used to actually go see movies and tell people about what music I liked too, I am unsure if that resulted in any sales. I did go to the theatres if I saw a bit of a movie that I liked and didn't want to deal with shitty quality of early torrents.

It's been a few years since I last pirated anything and, in a similar vein, I've stopped spending money on seeing movies and I only listen to music on Pandora. So...yeah not pirating probably lost them money in my case. I don't know, there hasn't been a movie that's come out for a while that I wanted to see. I think the last movie I saw in theaters was Up or Toy Story 3.

I never pirate video games I haven't legitimately owned (ex. I pirated A Link to the Past a while back, but I owned it on the SNES and couldn't find my damn SNES) though. I'll just wait to play it a friend's to try it out if I really need to. They aren't as bulletproof as the movie/music industry.

Edit: It's worth mentioning I fucking hate iTunes and will never use their service. I probably wouldn't have pirated the songs I liked if iTunes wasn't such a steaming pile.

Stahlseele · Post by **Stahlseele** » Fri Jan 13, 2012 3:12 pm

is it pirating, if you own physical copies and legit keys for a product and download it because it's more convenient?

RobbyPants · Post by **RobbyPants** » Fri Jan 13, 2012 3:30 pm

Stahlseele wrote:is it pirating, if you own physical copies and legit keys for a product and download it because it's more convenient?

In spirit, no. Legally, I'm not sure. I know the whole Digital Millennium Copyright Act has some very dumb stuff in it, so it wouldn't surprise me if it actually is illegal.

Stahlseele · Post by **Stahlseele** » Fri Jan 13, 2012 4:09 pm

In that case,i pirated MW4Mercs SEVERAL times.
Because the bought discs all had production errors that made installing problematic because they'd allways error out on one specific file . . and if you ignored that error so the installation would finish, you'd get game crashes when trying to do one specific mission . . which, of course, was one of the beginner missions . .
no such problems with the pirated versions, which i installed using legit keys.
and using the legit discs to play too.

DSMatticus · Post by **DSMatticus** » Fri Jan 13, 2012 4:19 pm

In the overwhelming majority of cases, it is illegal, yes. Circumvention of "anti-piracy measures" became illegal with the DMCA. No cd cracks are illegal for legitimate copy owners. Not sure how other countries handle it, exactly.

P.S. My number one reason for iTunes hate:
They used to encrypt the music with an account-and-song-specific key, and then encrypt your key library with another key. Now, this never stopped you from playing the music you had legally purchased from iTunes on an iPod or any iProduct, because it would automatically download your key library for you. But it did count as an "anti-piracy measure," which meant it became illegal for competitors or end-users or anyone to circumvent. Anything but an Apple product that dared to decrypt and play those song files was violating the DMCA, even though it was a fairly trivial task, and Apple sent armies of lawyers after anyone who dared.

They set themselves up a nice little monopoly where they sold the content, but if you ever wanted to actually use the content you also had to buy their player (an iPod). They've backed down now, but seriously; just fuck Apple. And they didn't learn their lesson; fast forward to the iPhone. The only apps available? Ones personally approved by Apple and sold through the iPhone store. They have shown an amazing willingness to shit on consumers and handicap their own products to make a buck.

Pseudo Stupidity · Post by **Pseudo Stupidity** » Fri Jan 13, 2012 5:10 pm

And yet, everyone still buys Apple products. Just look at the iPad (and iPad2, now with shit other tablets could do when the iPad came out!) and how well it did. I had to convince family members not to buy the iPad, they thought it was a good tablet.

iTunes is also a really big program, I don't know why it wants to use ALL THE MEMORY FOREVER when all it's doing is playing some fucking music. Maybe new versions (and christ did it update all the time) fixed that? I wouldn't know.

Koumei · Post by **Koumei** » Fri Jan 13, 2012 5:43 pm

One thing I respect Adobe for is that they came out and literally said "If you don't use our products for commercial purposes, we don't care if you pirate it, go right ahead."

Incidentally, if a company, let's call it Leisure Labourstore, releases a leaked document of the rules for, let's call it BattleMaul Largenumber 6th Ed, and such thing is basically "Just needs the pictures to be put into the boxes they provided, and some editing for print" but has no copyright information anywhere in it, and the actual product itself is not out yet, is it still protected in a way that makes it illegal to pirate and to share around the place?

Stahlseele · Post by **Stahlseele** » Fri Jan 13, 2012 6:15 pm

Yes it is.
Just because it's not mentioned anywhere does not mean it is not copy righted.
The writer, at least, has the sole copy right on anything he writes.
Unless he has a contract stating that whatever he writes automagically belongs to the corp he is writing for.

LargePrime · Post by **LargePrime** » Mon Jan 16, 2012 7:36 pm

Koumei wrote:One thing I respect Adobe for is that they came out and literally said "If you don't use our products for commercial purposes, we don't care if you pirate it, go right ahead."

I cannot find a source for this. Can you link me?

fectin · Post by **fectin** » Tue Jan 17, 2012 12:19 am

Lago PARANOIA wrote:Does that imply that the industries would be even more profitable without piracy? That piracy actually helps make these industries profitable? Or that the net effect of piracy is neutral? Help me out, here.

The answer to all of these is no. None of those options must be true. You can imagine a scenario where twinkies are unpopular, and only available in one gas station, so are basically never shoplifted. You can extend that thought-experiment to consider super-popular twinkies which are sold everywhere, and so are shoplifted all the time. In that case, the hidden variable is twinkie popularity, and shopliftings are all lost sales (because even if the shoplifter wouldn't have otherwise bought a twinkie, it's still an inventory loss).

In reality though, it doesn't work out that way. Like all real science, different studies have shown different results, but my sense of the preponderance of evidence is that piracy and music purchases are complimentary goods; i.e. doing more of one drives you to do more of the other.

I suspect without direct evidence that there are actually losers in this. I suspect that piracy acts as a "try before you buy" sort of deal. This means that content which people like will tend to benefit, but that overhyped content (defined for my purposes as content which normal channels recommend as more valuable to the consumer than it actually is) tends to suffer. E.g. (and remember that this is still personal theory, not proven or even demonstrated) Natasha Bedingfield had a strong hit several years ago (Pocket Full of Sunshine). Within the group of pirates, if the remainder of her album is also popular, piracy benefits her, and boosts her album sales. If pirates believe that the remainder of her album is dreck, piracy is probably harmful to her album sales. As this is essentially forcibly de-leveraging an induced informational asymmetry, it's real hard for me to disapprove (it's like disapproving of someone stealing a sample of snake oil).

However, there does remain a moral issue, at least in my mind. Current law describes content as property of various entities, and I am strongly in favor of e.g. an owner's right to feed a Picasso through a woodchipper. If you own a thing, you should be able to light it on fire for no better reason than that you want to. It is your right as a business owner to make terrible business decisions, for very bad reasons or for no reason whatsoever, and I figure that extends to IP as well. The other side of the coin though, is that having bought something, I should have the same right.

I'm not really sure how to resolve that one, and have been wrestling with it for a while.

cthulhu · Post by **cthulhu** » Tue Jan 17, 2012 3:20 am

Juton wrote:It's my understanding that piracy generally has a neutral or even beneficial effect on sales. The thinking is, if a person has X dollars they are going to spend on entertainment then they are going to spend about X dollars on entertainment. If that person pirates media then they are going to go out a purchase the media they like best, either to get a better copy or to support the creators.

Looking Glass Studios is probably the counter example. Systm Shock 2 was a commerical disaster. However, SS2's piracy rate was apparently very high, it was a great critical success and it is widely remembered as a classic game. If piracy encouraged purchases or was a 'try before you buy' arrangement, then SS2 would have been a commerical success.

However, looking glass isn't in business....

Looking glass studios in particular is to me the biggest counterargument to this line.

Vnonymous · Post by **Vnonymous** » Tue Jan 17, 2012 3:57 am

http://insomnia.ac/commentary/pc_game_piracy/

Piracy is a solved question, pretty much.

cthulhu · Post by **cthulhu** » Tue Jan 17, 2012 5:12 am

Vnonymous wrote:http://insomnia.ac/commentary/pc_game_piracy/

Piracy is a solved question, pretty much.

A significant part of that guy's arguement is that Piracy is caused by games having good graphics.

I'm not even joking. He spends ages on this point.

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