As Expected, Ridiculous, Wrong, Exaggerating And Misleading Report Claims That 'Piracy' Is Killing Jobs
from the oh-come-on dept
As was leaked earlier this week, a study paid for by the International Chamber of Commerce has come out with ridiculously misleading and misguided report about how "piracy" is killing jobs all through Europe. The tagline is that it's "costing" 1.2 million jobs and about $330 million. And, of course, that sort of report is the kind that the press loves, and so we get a series of headlines:- Net piracy puts 1.2m EU jobs in peril, study shows
- Internet piracy taking big toll on jobs
- Illegal-file sharing could 'cost billions' by 2015
- Piracy threatens Europe's creative industries
- EU must take 'urgent' action on piracy, report warns
Honestly, the claims by this research firm, TERA, read like "automobiles costing buggy makers jobs and money, something must be done!" It's based on a fundamental misunderstanding of basic economics and the nature of dynamic markets (and, frankly, calls into question anything put out by this particular firm). The only thing "costing" companies money are their own actions. If they are failing to adapt to a changing market, that's their fault. Don't try to pin the blame on new technologies and consumers getting better access to content.
Even worse, when you start to dig into the report you find all sorts of highly questionable or downright incorrect assumptions. TorrentFreak put together a starter list of problems (feel free to add more in the comments):
- The report suggests that there's a direct correlation between Internet traffic growth and lost jobs. That is, the more traffic that is generated on the Internet, the more money will be lost. This correlation is 1 according to the report, which assumes that all growth in Internet traffic will increase piracy at the same rate.
- The report makes another bogus assumption by stating that more traffic will mean more piracy and thus more lost revenue. It does not account for the fact that people might consume higher quality files which are greater in file-size. All projections are based on bandwidth and not the number of pirated goods.
- The report cites some academic literature which suggests that piracy leads to a decrease in sales. Studies that reported the opposite or a null-effect were carefully left out. This bias defines the entire outcome of the report. If they used studies that found a positive effect they would have found that piracy would create hundreds of thousands of jobs in the years to come.
- The report uses fixed substitution rates. They assume that 10 downloaded albums results in one lost sale and this figure is not adjusted for the projected increase in piracy. One would think that the public's budget for entertainment is limited and that the substitution rate would go down as piracy goes up.
- Related to the previous point, if the industry did indeed lose over €240 billion in revenue by 2015, consumers would have a lot of extra cash to spend. Depending on where this money was spent it might create more jobs than the entertainment industry claims it is losing. As a report commissioned by the Dutch Government showed last year, the overall effect of piracy on the economy might actually be positive.
- It gets even more ridiculous when we take a closer look at the claims. In the UK consumers spent €6.3 on audiovisual products. If the projected trends continued, the 'lost' revenue because of piracy would exceed the actual revenue, meaning that the music and movie industries would end up having to pay people for pirating their products.
- Lastly, the researchers seem to have trouble putting a decent report together as they messed up the legend of one of the critical figures. In this figure the bars for "file-sharing" and "global Internet traffic" are switched around. This makes us skeptical about the other statistics that are published in the report.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: europe, file sharing, jobs, piracy
Reader Comments
Subscribe: RSS
View by: Time | Thread
"In canada you get the shaft by hollywood"
this leads you to the fact that if hollywood sucks 240 billion away form what other things you buy how good will the economy be afterwards
[ link to this | view in chronology ]
and just how many artists are there
yea ...right
here we go again start the bribing while htey prepare the releasable ACA that 99% of the EU will vote FOR after claiming unanimously to want it open
get ready for an up your butt month coming
[ link to this | view in chronology ]
Re: and just how many artists are there
lolz, sadly this might be quite an understatement good sir.
..worse case scenario ..in the UK..try "get ready for an up your butt decade"
don't worry , i got my /rant out on another forum..i'm /calm and /mellow now.
but just in case it's of any interest to readers of this forum i'll post a couple of links if i may
december 2006 "gower review" on copyright infringement (pdf format)only 146 pages long.
http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/media/6/E/pbr06_gow ers_report_755.pdf
and "the register" on maximum penalties for copyright infringement (1 page only)
http://www.theregister.co.uk/2008/08/12/big_piracy_fine/
namely max penalty of £50,000.00 and/or 10 years in prison
hence the "up the butt decade" comment.
[ link to this | view in chronology ]
In Other News
[ link to this | view in chronology ]
Piracy killing jobs
[ link to this | view in chronology ]
Re: Piracy killing jobs
Also, Sally Muckenfutch
[ link to this | view in chronology ]
Re: Piracy killing jobs
Sounds like every "leader" since Ugg the First.
[ link to this | view in chronology ]
linked to articles
I also don't like how the study states that it's intent is to show the losses to the industry. Not if there are losses, not if Europeans are feeling the loss. The objective is horribly non-scientific.
[ link to this | view in chronology ]
Re: linked to articles
[ link to this | view in chronology ]
[ link to this | view in chronology ]
lier's don't figure
[ link to this | view in chronology ]
Re: lier's don't figure
you spotted that also ... the population of the EU ... your math is a little off the exchange rate is 1 US to 1.366 EU.
[ link to this | view in chronology ]
damn ca we see a chorus line with 1.2 million actors
[ link to this | view in chronology ]
if the USA is in recession
kinda also kicks the study down below hell level no?
[ link to this | view in chronology ]
All this mention of poorly-conducted studies....
And not one mention of a well-conducted study?
Come on. If you're going to report on such an important issue, at least link to a formal study that supports your viewpoint.
Like this one perhaps.
[ link to this | view in chronology ]
They always ignore that if you save £10 by pirating a DVD you will spend that same £10 on something else, such as a meal out or even a music album. It doesn't take the money out of the economy, it just changes which industry is in receipt of it.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
Which of course reduces inflation - so piracy reduces inflation ah - ever wondered why inflation used to be so high back in the 70's and 80's but is so low now - piracy has solved the problem!
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
It's a coincidence
[ link to this | view in chronology ]
By this logic...
[ link to this | view in chronology ]
"Fashion" perhaps? Others?
[ link to this | view in chronology ]
Lost income
All it takes is a willingness to license rather than holding a death grip on the control of who gets and who doesn't. At present if some site is willing to give over 60% of their total income to the holders then they are all for giving a license, provided they haggle for months and sometimes years to get the gnat's whisker defined.
What if there was a rewrite on what was acceptable terms for licensing? What if any pirate site (as so now termed) could just go apply for a license and get it? All those same sites would be contributing to the economy and jobs. This is not going to happen because the IP holders see that is loosing control and they will go down the drain rather than loose that control.
The point of this, is that it is the licensing system that is being wielded as the final straw to be loaded on camel back. Those same usual suspects are in the end, the ones causing all the distress. It's not the pirates (most of who would give their left nut to be legal) but rather it's the established players in the market who are to blame and no one else.
[ link to this | view in chronology ]
Oh they are totally right..
If they want to help create/save jobs maybe they should cut into their profits so that more people can afford the goods!!
[ link to this | view in chronology ]
[ link to this | view in chronology ]
lol that cracked me up!
[ link to this | view in chronology ]
Poking around Google News
"A report was commissioned by a partisan wing of the International Chamber of Commerce (ICC) corporate lobbying group called Business Action to Stop Counterfeiting and Piracy (BASCAP). Its directive was to investigate the "alarming rise in piracy driven job losses in Europe's creative industries.""
Is that true? None of the other articles say that the study was done by the "Business Action to Stop Counterfeiting and Piracy". I know it's the Inquirer, but with all the dumb ass things done in government, I can't tell anymore.
[ link to this | view in chronology ]
Re: Poking around Google News
It's on the cover of the report, at the bottom.
[ link to this | view in chronology ]
Increase use of seeds leads to drop in farm revenue
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
So copyright infringement is nothing like speeding and the laws that govern both. Good to know!
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
[ link to this | view in chronology ]
Re: Re: Re: Re:
[ link to this | view in chronology ]
Re:
Go to Germany then....
[ link to this | view in chronology ]
Re:
The autobahn allows for it and yet the accident rates on the autobahn are less than those of California and many other places with much lower speed limits. Heck, even in California the majority of accidents don't happen on the freeways, freeways have lower accident rates if I remember correctly.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
i am still
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Hell, it just seems like a common tactic these days
Reality is rarely if ever talked about since people want what they want and will do anything to get it.
Rubish
[ link to this | view in chronology ]
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/17/AR2010031701791.html
Why does the mainstream media put out such BLATANT lies.
This is blatantly false, provably so by all the content that people offer freely through creative commons and other similar licenses. Yet I'm supposed to believe anything the mainstream media tells me after they lie to me like this? This puts everything they say into question and puts their whole studies into question. Why should I take such liars seriously?
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Good journalism is dead.
I think the most obvious question these so-called main stream journalism outlets should be asking is: if consumers really have that much cash lying around and aren't giving all of it to the industry, where is it going? Under the mattress?
Just goes to show once again that good journalism died long ago. It isn't about reporting the news in an accurate and unbiased fashion anymore, but is instead about sensationalizing the news in order to serve ones own purpose (profits mainly).
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]