Is internet piracy really that bad?
After a recent case in the Dutch court, Ziggo and XS4all have to block torrent website The Piratebay once again. This was already the case in 2012 but was that block was overruled in higher court in 2014. The case is not new and the same thing has happened, and is still happening in a lot of countries for multiple so-called piracy websites. Organizations such as BREIN are filing these lawsuits to protect copyrights of several companies. Meanwhile providers defend the blocking of these websites based on freedom of speech. There is a lot of discussion about the downsides of piracy, but are there upsides too?
People in isolated countries generally have less access to mainstream series and movies. For example, if you live in Siberia and that one movie is not available on Netflix and not being shown on TV, how would you access it? You can get it sent from another country but that may not even be a possibility. The only option you would be left with is downloading the actual movie.
It gives companies reason to re-evaluate their profit model, Spotify and Netflix for example, dove in the market with a solution that solved the problem for people with low-income, such as students. This group is financially not able to buy everything, but are a big contributor to making or breaking a series in terms of popularity. All the extra publicity generated from this group might give the series an even bigger boost and may even increase total sales instead of lowering it.
The market of multimedia is still very much ruled by large companies such as HBO and Warner Bros. Piracy has brought more access to this market and its artists. You might even say that it actually stimulates smaller series and artists- file sharing, giving them more chance to breakthrough. Soundcloud and YouTube for example, made it possible for lots of small and unknown artists to share their content and generate revenue outside of big labels.
Series are more popular than ever, whether illegally downloaded, watched via Netflix or on TV, watching series and the term binge watching are quite popular these days. Cinemas are doing better than ever (MPAA, 2015). While most people view downloads as missed income for companies or artists. They might stimulate other parts of the market, such as merchandise.
While these reasons may not reflect the reality perfectly, I can say that piracy has disrupted the market multiple times, forcing them to innovate and change with current times. It also puts a dent into large company domination of the market. I think these changes are good for the general health of the market. Is calling piracy a necessary evil justified? You decide. We’ll have to see how the market evolves.
https://www.nrc.nl/nieuws/2017/09/22/xs4all-en-ziggo-moeten-the-pirate-bay-voorlopig-blokkeren-a1574474
https://www.mpaa.org/wp-content/uploads/2016/04/MPAA-Theatrical-Market-Statistics-2015_Final.pdf
There is actually research that shows that piracy has a positive effect on the (national, I suppose) economy, though – as I saw it some years ago – I wouldn’t know the veracity of this study. I am also aware of (game) studios that have experimented with piracy, which often didn’t turn out to be a success – but on the other hand, how many people who buy games haven’t complained about needlessly restricting and intrusive DRM, even citing it as a reason to pirate things?
It stands to reason, however, that if people are not going to buy your product anyway (because they don’t have enough money, for example), then piracy is a net profit for you. After all, you lose nothing – there is no potential sale to be made, and no disks or such are being stolen – and you gain publicity.
I think a case can be made that Steam (especially its sales) or GOG.com or such are similar to Netflix and all. Steam offers platform-specific rewards (community, achievements, a whole social sphere, so to say) and both offer a lot of convenience (access anywhere, latest patches, special fixes…). Just as iTunes decreased pirated music, so too do I expect Steam and GOG.com to have had such an impact on pirated games. Not on all games – see my second paragraph – but some.
Hi,
I agree with you on the fact that piracy actually isn’t that bad for business.
People enact in piracy because they cannot afford the high-quality product. Lower quality products thus can be less related to piracy (Ravenscraft, 2017). This means that vendors should maybe reconsider their pricing strategy and employ a payment method on an as-needed basis. People who need it from time to time pay only on occasion, while people who use it full-time are better off buying it fully, because they use it professionally (I suppose), which makes them have less incentive not to have the official licenses. Exposure of piracy in the professional sector is regarded as fraud and gives you a bad name. Adobe developed Photoshop, which was a too high-priced good for many people who actually wanted to use it. They switched to subscriptions and made it cheaper, which caused the situation to change completely (Ravenscraft, 2014).
In addition, companies can use piracy as a proxy of customer demand. Businesses can use enforcement related efforts and balance them with looking at how to adjust or develop business models to reap the benefits of the demand by offering fans/users what they are looking for when they are looking for it (Ravenscraft, 2014). The biggest examples of this business model innovation are YouTube and Netflix. They offer people the service of streaming whatever they like to watch, without having to download something illegally.
Ravenscraft, E. (2014, October 22). How Piracy Benefits Companies, Even If They Don’t Admit it. Retrieved October 11, 2017, from https://lifehacker.com/how-piracy-benefits-companies-even-if-they-dont-admit-1649353452