Speaking Truth to Pirates

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Posted on October 20, 2017

Sharing Something Online Doesn’t Mean I Would Pay For It

Two weeks ago the world got to read a European Union report on online piracy and copyright material from 2015. The report was 304 pages long and cost about USD$428,000. Its authors likely thought it would never see the light of day. Except, Julia Reda, a member of the European Parliament from the German Pirate Party, got her hands on a copy and shared its contents on social media. The report’s bombshell conclusion? “In general, the results do not show robust statistical evidence of displacement of sales by online copyright infringements”.

The report does qualify this statement, however, by saying it “does not necessarily mean that piracy has no effect [on sales] but only that the statistical analysis does not prove with sufficient reliability that there is an effect.” Specifically, the study found some limited effects on sales numbers for “blockbuster films.” 

Intuitively, online piracy — the act of taking something without paying for it — means less money for whoever is selling that which is pirated. However, this is not the only lens through which to look at this issue. 

There are two notable aspects of the report:

  1. Why the study could not quantify online piracy’s effect on artists’ bank accounts
  2. The importance its findings hold for content producers.

First the data.

It is impossible to compare the world before and after illegal downloading. The popularization of online piracy is a watershed, fundamentally changing the relationship between patrons buying art and artists creating it.

We cannot compare a purchase made in a world where piracy exists with the same purchase in a world before mainstream piracy.  There is no way to use totals from one era to extrapolate behavior in another. The numbers cannot prove with sufficient reliability the impact piracy has on sales. Which explains why the study was inconclusive.  

The study looks at the entirety of art being consumed and assumes everybody downloading content illegally would have paid for that material if not for online piracy. Colloquially, when we speak about shows that are not worth watching, we say they are “not worth the download.” It’s an expression that illustrates how my generation’s cultural industries have been shaped by piracy. Piracy breaks the connection between paying for art and experiencing it. This is acute in the age of social media, when fandom is celebrated like never before and when we can measure how many people are talking about a particular piece of art. But today, an artist who creates trending content is not necessarily compensated for making it to the charts. 

Art is an experience. The act of sharing that experience provides a way to measure its value. You pay for access. It is impossible to separate how people pay for art with how they talk about it, which means it’s impossible to look at online piracy without considering social media. Illegal downloading makes it possible to share the experience or talk about it without paying for access, while the explosion of social media conversations reveal the extent to which a piece of art captures attention. It is perfectly reasonable for artists and publishers to see significant engagement with their content on social media and wonder if those people ever paid to experience their art.  The answer is, almost certainly, no.

Illegal downloading lets people who would not otherwise pay for art still experience it. The study confirmed that this group of people represents an entirely separate audience from those that pay the full price for the same piece of art. In fact, there are cases where online piracy actually raises overall revenue by exposing more people to content and creating merchandising or licensing opportunities that would not have been available without free access to that original content.  

This is not to suggest that the combined rise of illegal downloading and social media did not fundamentally change how people buy and sell content. Though it makes intuitive sense to blame declines in publishers’ and creators’ revenues on online piracy, this study—while flawed—suggests that there are other factors. An obvious one is competition. File-sharing technology removes barriers to publishing and lets more artists reach more people than ever before. Consumers have more choice, so it stands to reason that established players would see some losses in a more crowded market.

So what are creators to do? How can they succeed in a world where some pay for content and others don’t? Maybe it doesn’t matter. The payers and non-payers collectively contribute to the online discussion, helping others discover the creative work.

Of course, it is natural for creators to consider the increased number of people accessing their work when taking into account lost revenue. The study suggests that these people are really a bonus audience, existing in addition to the core fans who will consistently pay for content. This turns online piracy into an opportunity for content producers. Rather than stealing customers, online pirates remove barriers to access. The net outcome is a larger pool of people familiar with the work, which means a larger pool of people who are potentially interested in tie-in products. It also means a larger pool of people generating more exposure through the simple act of talking about it online and offline. This is most obvious in situations where individuals who have downloaded an album pay to see the performer live in concert. 

More people engaging with your work is always a positive. Illegal downloading is not going away. While it may be hard to accept, “free” movies, music, and books should be looked at as loss-leaders instead of the core product. With online piracy removing the connection between accessing and discussing art, the burden is on publishers to distinguish between core fans who pay for art and those who download it illegally. Publishers need to convert pirates into payers through merchandise, licensing, and other revenue streams. 

This is not to say that piracy is right. But, we live in a world where online piracy is the reality, and we need to deal with that world as it exists. Campaigning against piracy risks alienating an entire generation and will likely shrink secondary audiences rather than turning them into additional revenue streams.

As fans, it is important to support our favourite creators by paying for work we enjoy. It is equally important for creators to recognize that—more and more—being a fan of someone’s work does not always mean being a paying customer.    

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