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The Almighty Buck Businesses Piracy The Internet Technology

Online Piracy Can Be Good For Business, Researchers Find (vice.com) 59

Posted by BeauHD from the contrary-to-popular-belief dept.
An anonymous reader quotes a report from Motherboard: Piracy isn't always the vile market bogeyman it's portrayed to be by the entertainment industry, a new joint study by Indiana University has found. Indiana University Researchers like Antino Kim say that online piracy can sometimes have a positive impact on markets, and being overly-aggressive in the policing and punishing of pirates may sometimes be counterproductive. As an example, Kim's study ("The 'Invisible Hand' of Piracy: An Economic Analysis of the Information-Goods Supply Chain") points to the hit HBO show Game Of Thrones, which routinely breaks piracy records thanks to heavy file sharing on BitTorrent. The researchers found that piracy often acts as a form of invisible competition, keeping both the manufacturer (HBO) and the cable operator (say, Comcast) from raising prices quite as high as they might otherwise. Raise prices too high, for example, and users will just flee to piracy, creating even higher losses. The researchers are clear to note their findings have their limits, and that they're not openly advocating for companies to fully embrace piracy. They do, however, argue that if you understand the benefits of piracy as a form of invisible competition, you'll find that overly-aggressive anti-piracy efforts can actually harm the market. "Our results do not imply that the legal channel should, all of a sudden, start actively encouraging piracy," researchers said. "The implication is simply that, situated in a real-world context, our manufacturer and retailer should recognize that a certain level of piracy or its threat might actually be beneficial and should, therefore, exercise some moderation in their anti-piracy efforts."
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Online Piracy Can Be Good For Business, Researchers Find More

Online Piracy Can Be Good For Business, Researchers Find

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  • Left "again" out of the title (Score:1)

    by Anonymous Coward
    Tom 'O Reilly said it long ago, and he was right. So many things are discovered that way that would never have been known otherwise. Some, like myself, then buy whatever that was to reward the creator. Sadly, most businesses no longer reward the creator anyway...

  • Didn't we knew that already? (Score:3)

    by godrik ( 1287354 ) on Monday January 28, 2019 @06:20PM (#58036646)

    Popular musicians are pirated and they sell more concert tickets.

    Popular movies may be pirated, but the sequel will sell more entries. (Or you'll listen to the on Youtube and get some revenue from there.)

    The show may be pirated, but you'll sell the t-shirts.

    Almost all entertainment products have multiple revenue streams. Maybe the primary product you don't sell, but you'll sell derivative products. Or you'll sell to the same people 5 years down the road once they'll have the income to buy it.

    • See I'm helping! I kept telling my father it was ok because I was helping the people get their music or movie or program recognition. He said I was crazy. But I know I'm not crazy because the scientists said I'm not crazy. Hah take that dad!

    • Another way to look at this is that people have *finite income*. If they get "free shit", then they're going to spend the rest of their money on other products. Spending a ton of money (taxpayer and corporate) on IP policing is just a drain on the economy, and less actual products get sold. Policing piracy doesn't mean people have more money to spend, since if they do buy your movie instead of streaming it for free, then now they have to not buy something else.

      Therefore, the taxpayer should have *no part* i

    • Popular musicians are pirated and they sell more concert tickets.

      What happens next is that music labels are no longer content with only getting a cut of album sales. So instead of only getting 85% of album revenues, Labels/management/agents now take 85% of concert, merch, and publishing revenues as well. Musicians now only get at best 15% of everything. Last I checked, losing 85% of 3/4 of your primary revenue streams was bad. This was one of the first consequences from piracy in the late 90's, and it's still standard practice today.

  • New? (Score:5, Insightful)

    by TimothyHollins ( 4720957 ) on Monday January 28, 2019 @06:21PM (#58036648)

    Isn't this the oldest argument? The less appealing it is to purchase something, the more likely pirating becomes. Steam made it easy to buy games, and so games sales increased while piracy decreased. Before Steam, it was actually *easier* to pirate a game than it was to purchase it.
    Then came Origin, the Ubisoft thingy, and now the Epic thingy, and as a result buying games became more difficult again in a fractured market, which resulted in games pirating once again increasing. no one wants to have 59 different launchers and storefronts.

    Seeing a movie at home used to require a damn PhD. There were 50000 channels to choose from, and they all came in completely illogical bundles that made no sense. Online options were for some reason even more complicated. And it was bloody expensive too. Tadaa, pirating movies became a big thing.
    Then came Netflix, it was cheap and easy. And suddenly pirating decreased.
    But oh no, everyone wanted in on that sweet sweet deal, and now we have a fractured market which is bloody expensive if you want to cover even half of the good stuff. And guess what? Pirating has once more increased.

    In short, the study is saying that if you offer a solid deal that covers the consumers needs, they will buy it. If you make it more appealing to pirate it (expensive and/or difficult to use), people will do that. I don't consider this rocket surgery.

    • Buying games was not harder than pirating them. Steam didn't make buying much easier. In the first several years, Steam was known as a Steaming PoS. It was awful (and still is today, but for different reasons). Having more digital stores doesn't make things harder, either.

      Digital stores make it easy to install/update/uninstall games. Piracy goes up and down based on how willing people are to pay for shit. A lot of piracy is for older titles that people can't buy, can't find their copy of, can't find u

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Buying games was not harder than pirating them.

        With piracy you go to a single place to download as many games as you want. Often you can download whole archives with tons of games. Then people started trying to monetize the downloads with "free" downloads being ridiculously rate limited. And of course the law/companies stepped to shut down these sites.

        When buying games? You could go on Amazon or ebay and try to buy a physical copy and if you were lucky someone was selling one. Then you got to wait half

      • Re: (Score:3)

        by rtb61 ( 674572 )

        Steam really screwed the pooch on forced gaming upgrades, which broke games, was only to sell DLC, added in advertising, the user can not block them, at all. Basically gave up on Steam after Paradox screwed around with forced updates, compulsory invasions of privacy else the game would not run, altering a game completely to sell DLC they planned. Until steam drop forced upgrades that are bad for people but suit idiotically greedy publishers and developers, they are shite and should be avoided. I wont be goi

        • "Steam has turned to shit and should be avoided."

          First, let me just open with the disclaimer that I have hundreds of titles in my steam library. Most of those are crappy little games I got in a humble bundle, though. When it comes down to it I have only a small handful of AAA games, and some of those were purchased at a deep discount. For example, I got fo4+pass for 20 on cdkeys.

          Now with that said, I've been railing about the evils of steam since it was new, and particularly about any game which actually us

          • Reinstalling your warez copy of a game involves one step: INSTALL. And it will still work even when steam no longer exists.

            Two steps.
            1. Mute/turn down the audio of the installer.
            2. Hit install.

        • This seems to be more a dev/pub caused issue than Steam.
    • Comment removed based on user account deletion

    • Re: (Score:2)

      by ljw1004 ( 764174 )

      Isn't this the oldest argument? The less appealing it is to purchase something, the more likely pirating becomes.

      I'm glad your conclusion was obvious to you, because the study actually says something completely different what you've characterized.

      Study: "if you make it less appealing to pirate, then people will buy the product less."
      Your characterization: "if you make it less appealing to purchase, then people will pirate more."

      The only tenuous thread by which I can relate your characterization to the study is if you assume that "pirate more implies buy less". If so, then your characterization is even more unrelated t

  • The researchers found that piracy often acts as a form of invisible competition, keeping both the manufacturer (HBO) and the cable operator (say, Comcast) from raising prices quite as high as they might otherwise. Raise prices too high, for example, and users will just flee to piracy, creating even higher losses.

    Piracy is good because it prevents piracy? Got it.

    • This reminds me of the 34th and 35th Rules of Acquisition.

    • Piracy is good because it prevents piracy? Got it.

      No, piracy is good for business because it keeps the business from raising prices to what the market would otherwise bear.

      Sorry, that's not good for business. It's good for schmucks who actually pay for the content but bad for business overall.

      The argument (above) that people will pirate the movie but buy the t-shirt (or the sequel) is just silly.

  • The most damaging part about piracy (Score:1)

    by Anonymous Coward

    is the overreaction to it.

    Ubisoft makes great games that i will never play because i wont pirate them & their ham-fisted DRM is a huge pain for legit customers.

    Since i wont be a pirate & they wont let me be a legit customer. I'll be neither & just keep buying indie games instead.

  • From the summary:

    "Our results do not imply that the legal channel should, all of a sudden, start actively encouraging piracy," researchers said. "The implication is simply that, situated in a real-world context, our manufacturer and retailer should recognize that a certain level of piracy or its threat might actually be beneficial and should, therefore, exercise some moderation in their anti-piracy efforts."

    I don't know if this is intentional on their part, but the Big Finish Productions [bigfinish.com] people regularly do sales of their stuff, even the somewhat-recent stuff. (They do a lot of full-cast audio stories for Doctor Who - new stories with the original cast - but they do a lot of other things too.) I remember on one of their podcasts a few years ago, they mentioned that they know people do illegally share their stuff around. Everything is (intentionally) unlocked mp3 and unlocked audiobooks, so it'

  • So this competition “keeps [businesses] from raising prices quite as high as they might otherwise”, yet is somehow “good for business”? Uh, how exactly?

    Now we’ve all known (even HBO executives have known, as the article goes on to say in its last part) that piracy provides free advertisement (a tangible business benefit). So, what are the new findings from the paper that show that “piracy seems to have a surprisingly positive impact on the profits of the manufacturer and

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      So this competition âoekeeps [businesses] from raising prices quite as high as they might otherwiseâ, yet is somehow âoegood for businessâ? Uh, how exactly?

      Now weâ(TM)ve all known (even HBO executives have known, as the article goes on to say in its last part) that piracy provides free advertisement (a tangible business benefit). So, what are the new findings from the paper that show that âoepiracy seems to have a surprisingly positive impact on the profits of the manufacturer

  • The more exposure something like a show or movie gets, the more people will tell others about it. Some of those others won't be broke and will pay for the movie or show. It's free advertising, basically.

  • Isn't this basic Black Market theory? The summary implies the benefit is to the market, by creating competition, rather than to the producers of the works. Producers don't care about the health of the market, nor do they want more competition.

  • At $10, anyone who needs the article will pay, whereas people who are just curious will either pirate or go elsewhere. Compare that to Elsevier.

  • You created, you should be able to decide how it's consumed. If it costs you money in the long run that's on you. It's really that simple.

  • Piracy is good for markets in places like India and the PRC but not so good for US coders.

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