Episode 4 – Parts 1&2: Pirates Are The Best Customers

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  • VOICE NARRATION: Ioana Pelehatăi
  • ILLUSTRATIONS: Liviu Bărbulescu
  • SCRIPT: Alex Lungu & Ioana Pelehatăi
  • SOUND DESIGN: Ștefan Teodorescu
  • EDITING & ANIMATION: Alex Lungu
  • SUBTITLES: Emilia Givropoulou(Greek) – Thank you!

FINES

STUDIES

LICENSING & AVAILABILITY

LARGEST SCALE STUDY ON FILESHARING

PIRACY, BULLYING & EXTORTION

THE INDUSTRY & ARTISTS

THE INTERNET AND THE ARTIST

COPYRIGHT – THE AWFUL SIDE

All works used are under Creative Commons licenses.

MUSIC:

SOME ILLUSTRATIONS are derivative of icons from The Noun Project (CC-BY):

CHANGING WHAT WE THINK OF PIRACY

UNDERSTANDING

LEGAL SYSTEM

Pirates are the best customers

This episode of Copy-Me, animated webseries extraordinaire, addresses the real, verifiable, and independent research data that show something pretty weird (at first glance): not only are “pirates” not negatively affecting markets, but “pirates” are actually positively contributing to them. As industries push more on the piracy-destroys-everything rhetoric, it’s time we really take a step back and see the whole picture.

  • Does a trove of independent data paint piracy as the end-all enemy? No, not at all. It’s more that the industry fails to address the market of underserved customers.
  • Do we really need stronger laws to protect our losses? Research shows that no anti-piracy measure has actually worked so far and that protection doesn’t solve anything.

Piracy seems to be more of a symptom and not the cause of all problems. The solution is, and has always been, good quality services. Because distribution is terrible, prices are very high and don’t correlate with customer revenue, and the quality and scope of distribution is just about nonexistent. Meanwhile, “pirates” are your greatest fans and your greatest supporters. They are more likely pay for your next concert, movie, or book if you just give them the chance to do so.

As we see a steady growth of entertainment industry revenues each year, maybe it’s time we really put our lawmakers in the spotlight. Laws can’t fix the problem of an old business model failing to adapt to market changes. And it’s time to really talk about the effects of piracy.

For an extensive view of every study used, click on the tabs below the video.

“We’re being told that we need strong laws, without any evidence for why or whether strong laws are effective.”

The biased views

This is a quote from William Patry’s brilliant book about fixing copyright. And it pretty much summarizes everything wrong with anti-piracy rhetoric: the industry keeps screaming at legislators that markets are shrinking and that existing laws fail to protect losses. They say it’s “all because of piracy” and sadly, their voices are the only ones making news.

As terrible as that is, this stream of poor information only has one effect: lawmakers take all the stats served by the industry at face value and pass or extend laws to help the industry cope with a new paradigm. Everyone loses in the process, and after laws prove ineffective, the cycle repeats itself.

The industry is addressing very broad issues, such as job, revenue, and even creative losses, without ever proving their claims. There’s always more at stake than private interests, they want us to believe. But is it true, or is it all just smooth talking?

After all the data in our episode and all the talk about the “pirates want everything for free” myth, we’re left with some lines of argument that others have covered quite nicely already:

  • Ars Technica’s Julian Sanchez wrote a very extensive analysis on the dodgy digits behind the “war on piracy”,
  • Floor64 has a very good overview of the actual revenue data,
  • and there’s loads of other stats in the “Sources” and “Further Reading” tabs right here on this page.

But is it true that piracy destroys the author’s interest to create?

More piracy, fewer creators. The myth.

The argument goes like this: “because of piracy, producers and distributors experience huge losses, so they don’t have money to invest in new awesome works; and no money at all to invest in weirder or more “creative” writers/directors/singer; in other words, piracy means less creative output”

Or, put even more simply: “piracy means no next Scorsese, Michael Jackson or George Orwell”.

There are, of course, a number of fallacies in this argument.

No direct link between monetary loss and piracy

First of all, as our episode and a number of independent studies show (check the “Sources” tab), there is no direct link between piracy and how much money you earn from a product. What you earn and how popular a product becomes is determined by the marketplace and by critical acclaim. Copyright laws can only ensure that once you’re popular, you can be protected.

Sure, you can complain about file-sharing, but no law or anti-piracy measure can make you successful right off the bat. And, once you’re popular, it’s inevitable for your files to be copied. This is 2015, after all. The time when someone couldn’t get a copy as fast as you can are long gone, and are never coming back. Copying will only get easier.

In other words, everything is already free on the Internet. This doesn’t actually mean you can’t compete with free or can’t have a sustainable business model based on $0 marginal cost (digital copies). Just look at Linux, Vodo, Patreon, Humble Bundle or even Youtube. Delivering good quality services will always drive piracy down and will always bring more people to pay for your stuff. It’s not control that you need. It’s focusing on how to let people pay, and not on how to make people pay.

Producers don’t have to be paid, distributors don’t have to be paid, not even artists have to be paid. No industry works like that. This, of course doesn’t mean the artist or culture is irrelevant, as I’ll point further on. But you don’t see coffee shops yelling at clients to feel bad because they “stole” by not buying the shop’s $50 organic one-of-a-kind coffee and going next door instead. Maybe the market isn’t big enough, maybe clients are bored of organic coffee, maybe clients just don’t want $50 coffee. That’s a lot of maybes and it’s not really up to lawmakers to make people pay for products they don’t want.

No clients? That might mean your business is flawed, not that everyone else is stealing from you.

Scorsese’s movie won’t be made in 2015

Not having the next Scorsese in 2015 is totally irrelevant. Scorsese’s movies belong in the years they were made. It’s like saying refrigerator technology drove all the icemen carrying ice to people’s doorsteps out of business. Technology changes, culture changes, and people change with it.

Of course Scorsese wouldn’t make any money if he released Taxi Driver today. Any movie ever made is tied directly to its time and place. Taxi Driver was brilliantly made, and revolutionary for its historic context, but it couldn’t register a bleep on anyone’s radar today. There were loads of movies that borrowed from that Taxi Driver culture, improved on it, and managed to elevate film-making to even higher standards. The market wanted that movie in 1976 because it was a product of 1976. It’s 44 years later, dammit! Not even Scorsese himself is making the same type of movie today that he was 40 years ago.

More creators than ever

As difficult as this might be to hear, there’s no data showing that there are fewer creators or less “creativity” today. The statistics actually show that there isn’t, and there never was, a “creative apocalypse”.

There are more people than ever creating stuff today, and the “creatives” are actually making more money than 10 years ago. Now there’s hundreds more methods of distribution, more equipment and less expensive gear, there are more channels, more curators, and a lot more diversity. Claiming loss of diversity because your distribution model can’t afford it anymore (even if that very model wasn’t diverse in the first place) just proves how far off you are from reality. Diversity comes from having the power to decide how and when you want to make the thing that you love, not having a corporation decide for you. More people will always make for more diversity.

If the public were to choose between the ever-growing diversity of Youtube, for example, and the sloppy excuse for production and distribution that is the mainstream movie industry, it would surely choose the first. The industry is not entitled to make movies, books or music just like their predecessors did 50 years ago. Times change, culture changes, and you have to change with them.

Investing too much money in movies and can’t recoup your losses? Well have you ever though of… I don’t know… not investing that much money? Nobody’s making you invest in hundreds of extras, or tons of CGI, just like no one’s making people pay for stuff they don’t want. Maybe the market just isn’t lucrative for big budget movies anymore. That is neither good, nor bad. It’s just reality. Producers were crying about the market no longer being lucrative for black and white or silent movies a while ago, but did that serve them any good?

Trickle-down economics is bullshit

There’s this myth that without the gatekeepers, the producers and the distributors, artists would be out on the streets. As I said earlier, now it’s easier than ever to be your own producer and distributor and manage to live a decent life and make exactly the things you want. There are no such barriers anymore.

What is still there is this rhetoric coming directly out of the industry’s mouth: “You’ll starve without us!” Oh really?

“Increasing revenue to distributors does not mean increasing revenue to artists”, says William Patry who’s studied a lot of hard data. The statistics are not what you’d expect. Money flows away from the artists as distributors make more. In other words, the rich always get richer and you get… well, nothing. Yeah, that’s right: if you sell your rights to a distributor, don’t expect to get more money just because they make more. This is just another way of putting “a colorable face to their monopoly”, as Patry puts it.

Trickle-down economics is a Reagan era philosophy that has proven dead wrong even by the IMF(!) and it’s time to let it go. That’s because…

We want more creators!

And if we truly want this (we really do!), it’s time to stop catering to industry needs and focusing on the needs of the artist, for once.

The industry is always opposing change, and that’s not too hard to see. For instance, in 2011, MPAA Vice President Greg Frazier said that “democratizing culture is not in our interest”. In other words, they don’t care about other people doing what they do, they just want to be the only ones doing it. And that’s not really what diversity, culture or creativity mean. Culture is not something that can be left in the hands of a few.

Still, you might say that creators, be they independent or subscribed to an industry, depend on copyright and anti-piracy laws. Well, no.

Creators depend on copyright, you say? Sure, some popular artists do, and it’s nice to see artists making a living out of their work, but this statement is pretty funny coming from an industry that actually hasn’t researched the issue at all. There’s actually ZERO evidence that creators are incentivized to create just because, on the off chance they turn out to be very successful, their work is protected for 70 years after they die. Most creators think in terms of what money they have for next week or next month, not what their unborn daughters get after they die.

Copyright or anti-piracy laws cannot and will not provide the initial economic conditions that authors need, nor do they make authors create more works. Independent studies show that copyright is actually not an incentive to create at all. The real motivations are actually intrinsic. Simply put, copyright is not the reason people create.

If we really want more creative people doing more creative work, we should teach more of that in our schools, we should have bigger and more diverse budgets for culture, government subsidies and tax breaks. Some authors like to rely on distributors too, and that’s fine. But focusing only on what distributors manage to select, market and distribute will not motivate more people to create and live off their works. The truth is creativity is far more likely to happen outside the established channels. Just take a look at Patreon!

Effective copyright laws

Unfortunately, we base the law on old assumptions about creativity, and we only work with century old ideologies of distribution and control.

Addressing some of the above needed changes won’t solve much, because laws need to reflect reality first. For instance, you have to pay an army of lawyers just to able to license your book or your music to each country in Europe. Copyright should serve culture, not hinder the public domain and damage our entire cultural heritage. Copyright should allow audio-visual quotations, remixes, fan media, parodies, commentaries and all possible future technologies because they’re a big source of revenue for the economy. Money should first go to the intended beneficiaries, not to third parties. Copyright should allow unauthorized copies for educational work and should protect authors from contract abuse. We cannot focus only on the small fraction of existing works and ignore the 99% of culture that is at risk of being lost forever.

Disney was able to remix Brother’s Grimm “Snow White” (it was in the public domain), but no one is legally able to remix Disney’s version for another 18 years as of this writing. That’s almost 100 years after it was first released! The piracy excuse doesn’t serve any artist, it only serves large corporate interests which want to squeeze every penny out of works they didn’t even create.

Now what’s your excuse?

Editor: Ioana Pelehatăi
  • Grenaid

    Great video once again! I’m a little annoyed that the 150k thing keeps coming up, with the implication that the average user could get slapped with that.

    I know it’s a threat that goes out in settlement letters, but I don’t believe (correct me if I am wrong) that ANYONE has ever been slapped with that for downloading a song or movie. Instead, that threateningly large amount is for people who share that content with someone else (ripping, camming, or uploading.)

    I dislike seeing that amount waved around in threat letters, and am disappointed to see it pop up here too. I hope this is addressed in the future.

    Keep up the good work!

    • Hey Grenaid and thanks for commenting.
      You are right with one thing: no one ended up paying that much money.

      But the thing is the industry can pretty much ask for any number. And the bigger it is, the quicker they can convince you to settle. It’s just another way of extorting people and turning them into an example. As I see it, even 1k is a lot of money for just one copy of one song. And no one should be forced to fork up so much money.

  • WhyAmISigningUpForThis

    Interesting video.

    A few comments:
    I don’t think the music industry is making people pay for what they don’t want. As far as I see it, if someone doesn’t want a song, they don’t buy it. That isn’t the same as a person not wanting a song and pirating it anyway. The people being targeted are in the latter group.

    I agree with you on the last point that there is far too much red tape, and middlemen in the copyright sector. This definitely needs to be addressed.

    As for what are my excuses?

    I think your argument that pirates are the best customers might have to do with the fact that the people that consume the most media so happen to be people that pirate. I don’t think pirating is the cause of this, and I think it’s a correlation if anything.

    I’m curious to hear what your perfect music industry would be? There is obviously a limit to piracy’s “Benefit” to society. If consumers abandon purchasing any media whatsoever and instead pirate it, I don’t see how a benefit could be possible. The only thing stopping piracy from hurting revenue is the fact that people who pirate also purchase media. If your goal is to abolish copyright and the music industry in general then this factor will vanish.

    Thoughts?

    • Good questions and I will try to be brief.
      We’re not looking to abolish copyright, as copyright does actually contribute to society. There is some evidence that big budget movies or popular artists do sometimes rely on copyright protection. And I would hate to not be able tot see the next Mad Max in cinemas.

      Sure, I can agree that some pirates consume more media. But if we truly want an open discussion on piracy, maybe it’s not fit to have just two categories(pirates vs non-pirates). People are not that predictable or that simple tot judge.

      For instance, some people download CAM copies to try the movie out and then come to see the movie in cinemas (https://torrentfreak.com/research-warns-against-overestimated-movie-piracy-losses-141006/). Others buy the Blu-ray, for instance, but want to have another copy on their PCs and don’t want to/don’t know how to rip the disc. Others want to come to a concert and want to sample the music before attending. Others download unauthorized copies of Photoshop but buy 20 legal copies for work.
      I’m sure you can think of other examples too.

      What I’m trying to say is that we can’t honestly say one pirated file means someone lost the money equal to the price of the product. Also, nobody’s abandoning legal products, as the statistics show an increase in revenue each year. There are lots of legitimate reasons to buy from authorized sources, as they’re sometimes easier to access, simpler to understand, you don’t need to be computer literate or have an understanding about how viruses work.

      As even more studies point to piracy boosting sales (http://www.scribd.com/doc/172985274/LSE-MPP-Policy-Brief-9-Copyright-and-Creation), I see things not from the must-stop-piracy perspective, but from how-to-make-them-your-fans perspective. Piracy will always exist and will only become easier. Still, all studies show that when users are presented with legal alternatives, piracy drops radically:

      – For instance, Neil Gaiman had a book published in 2011 and saw that having his book on Pirate Bay actually boosted his sales. He then put another book for free and his sales increased by 300%.
      – Monty Python released in 2008 a load of high resolution videos on Youtube, and despite the fact that users could copy them entirely, their sales got a boost of 23000%
      – When tv show “Lost” was made available on Hulu in the US, piracy dropped immediately by 50%

      So the solution is not more law, but authorized content at affordable prices, in forms that are useful to all possible consumers.

      • WhyAmISigningUpForThis

        Thanks for the response! Lots of food for thought.

  • Pragmatist_in_another_guise

    I have popped in from TorrentFreak where a pointer this site was posted.

    It looks interesting and I shall wander around it.

    • Cool! Nice to know where our readers come from 🙂