Despite its worst impulses, the decade did see the rise of an endless roster of streaming video alternatives, letting consumers finally cut the TV cord. The Advantages and Disadvantages of Piracy - EduZaurus Everyone hears about how file sharing is killing entertainment industries, and it makes sense: If theres an option to simply download an album for free as suppose to purchasing it, or course thats going to hurt the artist. Throughout the years, the entertainment industry hasnt always been the kindest to its fans. 26, Then there is the China Conundrum. Piracy is rampant in China, for both the motion picture sector and for music. there are hundreds of free or cheap alternatives poping up now that are almost exactly the same as pirating. Because of this negative connotation, piracy at first sight seems to have little to do with legitimate business. The entertainment industry has been incredibly reliant on cable packages, commercials, ticket sales, sales of media discs and direct sales through fellow corporations trusted by the industry. As Danaher said, 2021 is going to be a big experiment for the industry when it comes to piracy. And then theres this not so amusing story: Chinas most prominent music executive, Song Ke, abruptly quit his job as CEO of the Mainlands most successful record company in order to launch a Peking duck restaurant. Little was done to independently verify industry piracy allegations, and users had to pay a $35 fee just to protest their innocence. As stated in the graphic, 70% of people are OK with piracy, and it seems like many have just given up on going into theaters as a result of the pandemic. Then there are those like Disney who have, for the most part, postponed the majority of their films until 2021 and placed a handful on its own streaming service. I enjoy hearing about the influences that are often trumped by the negative aspects. If the owner provides free content and then the pirate agrees to promote the owners content, this would encourage the pirate to work with the owners instead of working against them. The most famous online music example of this probably is Napster. Those verticals all have separate costs of goods, separate value chains with other peoples hands taking out large percentages and royalties. Nowhere that I can see. "Despite the Motion Picture Association of America's claim that online piracy is devastating the movie industry, Hollywood achieved record-breaking global box office revenues of $35 billion US. The imaginary revenue (because proving that the people who pirate would have bought it anyway is difficult) is always a fraction of the people who buy it. Music theft (calling it piracy is too nice) has devastated musical innovation and it is only getting worse. Contact Form, Lionsgate Sues Over Expendables 3 Leak (Exclusive), Lionsgate Granted Restraining Order Over Expendables 3 Leak, IFPI Music Report 2014: Global Recorded Music Revenues Fall 4%, Streaming and Subs Hit $1 Billion, The True Cost of Sound Recording Piracy to the U.S. Economy, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1782924, http://www.pcmag.com/article2/0,2817,2409070,00.asp, http://en.wikipedia.org/wiki/Fred_von_Lohmann, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2466026, China: Total population from 2009 to 2019 (in millions), Australia: You Wouldnt Steal a DVD, But You Would Block Websites and Suspend Internet Accounts, http://www.huffingtonpost.com/kathy-wolfe/piracy-profiteers-time-to_b_1210132.html, 45% Fewer Professional Working Musicians Since 2002, Have we lost 41 percent of our musicians? As for the movie industry, Priest points out that [w]hile the Chinese box office may be booming, it is also a winner-take-all market in which a handful of big budget Hollywood and domestic films dominate box office availability and take the lions share of revenue each year. 43 In round figures, this means that 16% of all movies accounted for 70% of the revenue. But a new marketing study from the University of Georgia finds that piracy can actually boost ticket sales in certain situations. The entertainment industrys most controversial attempt to stop piracy in the last decade came in the form of the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA). "It's such a great experiment.". It proved that there was a desire to have access to digital high quality recordings, a wide selection of music, and a service that was easy to use. The rejection of SOPA/PIPA showed that the public was no longer willing to accept vague scaremongering about piracy as an excuse to give up more control and to limit the internet, Masnick said. The LSE researchers urge countries like the U.K. and the U.S. to reform theircopyright enforcement regimes, which they say are out of step with such developments and with online culture generallyand do not necessarily even serve the interests of the creators they claim to be protecting. b. Ive been introduced to countless bands that I normally wouldnt have been introduced to, and consequently, Ive purchased tickets for concerts and albums to support the band. But theres trouble in paradise. TriStars objections were comprehensive, encompassing the scripts fundamental structure. The entertainment industry sees piracy as a very big problem. The bills were so poorly written they risked imposing vast new censorship systems on the internet. To start with, piracy practices can be used as a source for market insights. but it can be hard to tell whats good and whats crap. Dont get me wrong. As time goes on, this chain continues and the industry makes greater profits than it would have without pirating. Stephen Carlisle But what if the entertainment industry could turn this loss into a positive, by taking advantage of pirating? Therefore, most of the time piracy has the connotation. law - How bad is piracy hurting the entertainment industrie's economy The growing use of streaming, cloud computing,so-called digital lockers that facilitate the sharing of content and sites that offer a mix of free and paid methods of getting content will, the studypredicts, spur theentertainmentindustriesto shift their focus from pursuing illegal downloadingto creating more legal avenues for getting content online. This is, however, a lesson many entertainment executives seem unwilling to learn. 51, Last year, I settled down at my computer with a $30 iTunes gift card and the year-end issue of Rolling Stone featuring the Top 50 songs of the year. Napster turned out to be a valuable source to get insight in the potential market for online music and revealed the desires of the music consumer. In the absence of the piracy option, he or she would not have purchased material anyway. Does Torrenting Piracy Hurt the Entertainment Industry? c. Because of sound recording piracy, U.S. workers lose $2.7 billion in earnings annually. the official opinions or positions of Nova The entertainment industry has been incredibly reliant on cable packages, commercials, ticket sales, sales of media discs and direct sales through fellow corporations trusted by the industry. Without monetization, you dont have a music. "Revenues from digital sales, subscription services, streaming and live performances compensate for the decline in revenues from the sale of CDs or records.". The majority of the peer reviewed papers all found a clear correlation between file sharing and lost revenue in the entertainment industries. The music industry was in crisis just a few years ago. A new study by researchersatthe London School of Economicssuggests the music and movie industries have been exaggerating the impact digital file sharing has had on their bottom line and found that for some creative industries, copyright infringement might actually be helping boost revenues. Now shes had to sell it and get a Gulfstream III because people like you chose to download her music for free. So, one can hardly say that this illegal downloading of a CD is a lost sale., Collating all of these various points of view is a recent study by Brett Danaher, Michael D. Smith and Rahul Telang, which has just been published (June 2014) by the National Bureau of Economic Research in the journal Innovation Policy and the Economy. According to a study from the University of Georgia, research found that pirating movies raised box office sales via word of mouth: Movie studios estimate that they lose billions of dollars to digital movie piracy. While this is one way to look at it, this post aims to illuminate another side of piracy and shows that it can also be regarded as useful source for market insight, a creator of new markets, and an inducement for innovation. The MPAA, which estimates that the U.S. film industry loses $3 billion a year from physical piracy alone, is growing increasingly frustrated by how often video files are available on the Internet . We also offer combined rates with MusicThinkTank. Many former pirates were quick to flock to the service, supporting studies that showed the best way to beat piracy was through innovation and better services, not lawsuits. But a new policy brief from the London School of Economics and Political Science (LSE) says that not only does piracy not hurt the creative industry but it is actually helping.. The purpose of this blog is to provide information and CBC's Journalistic Standards and Practices. Additionally, with premium video on-demand becoming a purchasing option earlier than usual, it may not be immediately clear if it is on-demand purchases or piracy that is cannibalizing theatrical revenue. Tired of Hollywood remakes of every movie ever made and every TV show ever made? However, as a result of high-speed internet and the popularity of piracy websites, people have been able to find ways to cut out this middleman. 17 Of the remaining 15, every one found that piracy has a significant effect on the revenues of the entertainment industry, including one that found that file sharing was the cause for the collapse of record industry sales from 1998 to 2003. 42 When Google pulls the plug, thats a sign of how bad the business really is. Piracy of the entertainment industry: an overview to the US piracy This market that emerged did not only consist of comparable illegal services such as KaZaA, but also contained legal services that could use the insights that were provided and the market that was established by Napster. So if no one has it or only a few people have it, then its impossible to pirate. On the other hand, where is the next game-changing musician? While the six strikes initiative no longer exists, ISPs have since been forced into taking even tougher positions against pirates. Groups like the Electronic Frontier Foundation have argued that terminating consumer access to an essential utility for violating copyright is an absurd and draconian overreaction. Like six strikes, theres little to no evidence this is actually helping reduce piracy rates. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Your email address will not be published. How Many Spotify Streams Are Necessary To Live Above The Poverty Line? The entertainment industry has been incredibly reliant on cable packages, commercials, ticket sales, sales of media discs and direct sales through fellow corporations trusted by the industry. Smith said that the majority of people who pirate do so because they have no other legal way of consuming a product. 16 Of these 18 studies, only 3 found that there was no statistical impact on the entertainment industries. All Rights Reserved. But, box office analysts won't be the only ones keenly watching how these films perform next year. It is 72 pages long and contains 471 footnotes. Piracy: Friend to the entertainment industry (At least it should be 37 This is even more sobering considering the worlds number two music market is right next door in Japan, which accounts for twenty percent of global music sales. February 2013: The Rise (And Fall) Of Six Strikes Had the record companies adapted to a digital environment earlier, rather than resisting it, they could have witnessed growth much earlier, the authors say. But the 'pirated good', that is, the 'optical disc' is not seen with a similar perception.Till 2004, the creation of numbers conjuring losses up to millions was . 22. Digital piracy not harming entertainment industries: study | CBC News Loaded. 40 Finding it could not compete with the pirates offering music for free, it partnered with deep pocketed Google China to launch a 100% free, ad supported music download service. Another way that music pirating has become a credible factor for the promise of the record industry is to find statistically the needs & wants of the consumer as far as the types of content that are being downloaded, the favoritism towards genres that are being downloaded. havent done much to actually slow copyright infringement, The "Invisible Hand" of Piracy: An Economic Analysis of the Information-Goods Supply Chain, generating additional buzz and consumer interest. Its a lot easier to pirate media than fork over a sum of money for streaming service subscriptions. Another example is the success of paid Usenet groups, that will undoubtedly appear on the notorious markets list. Still think downloading music for free is no big deal?, When interviewed by CNBC in February 2012, former Disney CEO Bob Iger expressed frustration with the failure to pass anti-piracy bills, stating that the battle should not be Hollywood against the tech sector. While the sector had to be dragged kicking and streaming toward offering better alternatives to bloated cable bundles, the end result is an ocean of less expensive services with the kind of customer service that puts Comcast to shame. However, taking a closer look at piracy practices throughout history reveals that piracy has had a profound impact on the emergence of new business models, technology, and innovation. Simon Shin | SOPA Images | LightRocket via Getty Images, How cinema vs. streaming became Hollywood's new plot twist. However, a new British study suggests otherwise. The music industry was left for dead a few years ago. Now it's - CNN Finally, practices and services that are depicted as piracy can eventually evolve into legitimate businesses themselves. The initial legal struggles of user generated content sites such as YouTube are another example of how semi-legal services helped to establish a new market. Virtually all music downloads in China [are] unauthorized. 27 Piracy rates for optical disc media (CDs, DVDs and VCDs) [are]at least eighty-five to ninety percent. 28 Yet China has skyrocketed to become the second largest film market in the world, with production quantitatively on par with Hollywood. 29 How did this happen? "When information goods are sold to consumers via a retailer, in certain situations, a moderate level of piracy seems to have a surprisingly positive impact on the profits of the manufacturer and the retailer while, at the same time, enhancing consumer welfare," Kim and his fellow researchers state. Its too long, violent, and unfilmable 49 By the way, in searching for that quote, one of the top five auto-complete suggestions by Google was Pulp Fiction Full Movie and led me to a pirate streaming site. Ma, L., Montgomery, A., Singh, P. and Smith, M.D. The Gulfstream III doesnt even have a remote control for its surround-sound DVD system. 18, Of some significance, the authors point to a 2013 study in which the adoption in France of the so-called HADOPI anti-piracy legislation resulted in a 20-25% increase in digital music sales. For decades now, the entertainment industry has struggled to realize that the best way to stop piracy is to offer consumers better, cheaper products. "Insisting that people will only produce creative works when they can claimexclusive ownership rights ignores the spread of practices that depend on sharingand co-creation and easy access to creative works; this insistence privilegescopyright owners over these creators," the report says. The entertainment industry has spent decades demonizing piracy, often to the point of near-parody. This way, instead of creating hostility between the entertainment industry, the pirates, and the average consumer, the doors could be opened for collaboration. It's kind of ironic that the collapse of the entertainment industry would also be in a way the collapse of the piracy industry, so I guess such collapses/downturns could be cyclical. Enter Spotify, whose 2011 launch finally delivered a popular service that was easy to use, had an extensive library of songs, didnt cost an arm and a leg, and brought some much needed competition to Apples domination of the digital space. Piracy is the illegal reproduction, distribution, and use of someone else's product. Studios, hoping to find ways of turning a profit on big budget blockbusters, have turned to new methods for film releases. So maybe that makes me just another old fogey. The same holds true for the movie industry, the researchers suggest. Napster tried to accomplish this but eventually failed to establish a successful legal service. Since box office revenues are the one revenue stream that can be tightly controlled, expect a bunch of safe bets so that box office will be maximized before the losses of piracy start to pile up. With the advent of Napster in June of 1999, the fortunes of the music industry have plummeted. 13 However, this methodology contains a fundamental error: how much would the pirates have bought if piracy was not an option? Box 500 Station A Toronto, ON Canada, M5W 1E6. Sorry, youre only going to get more of the same. Piracy can form an inducement for legal, innovative business models. The researchers are clear to note their findings have their limits, and that theyre not openly advocating for companies to fully embrace piracy. However, when it became available on video on-demand in mid-March, there was a large spike in online piracy. You dont stop it by suing grandmothers or buying problematic laws, you do so by listening to consumers and providing better, cheaper, simpler services. By sharing my iTunes library, he has discovered groups with strong vocal harmonies like Queen, Manhattan Transfer, and genres like doo-wop. Van Ooijen also blogs at HaveYouHeard.It.