Economist Combats 'Myths Of Piracy' With More Myths

from the i-see-your-osiris-and-raise-you-a-zeus dept

Thu, Sep 20th 2012 8:34am — Timothy Geigner

We at Techdirt are among those constantly calling for a factual analysis of intellectual property and the laws that purport to rule it. I won't sit here and claim that disinformation has never come from people on our side of the argument as well, but we've seen time after time after time how the entertainment industry and their maximalist sympathizers tend to live in the kind of make believe world that puts anything this science fiction author has come up with to shame. The mental gymnastics required to follow along industry studies tend give my brain a sprained frontal lobe. That said, it takes a special kind of malfunction to decry supposed myths about piracy and refute them with a couple of made up myths of your own, as economist Michael Smith of Carnegie Mellon does (via Jeff John Roberts at Paid Content).

We actually start off on solid footing debunking myth numero uno, a common one espoused by the content industries: "You can't compete with free"

This myth is often invoked by content owners to justify heavy-handed enforcement measures against piracy sites and individual consumers. After all, why buy a song or movie when you can simply download it for free at a pirate site?

A quick look at the thriving content markets at Amazon, iTunes and elsewhere shows this notion is bunk. All of these sites are competing with free very successfully. As Smith points out, the lowest cost (including free) is not the only determinant of consumer purchases.

Ah, sweet, wonderful logic, with its simple formula of giving people easy access to what they want at a reasonable price as a method for staving off piracy, a symptom of unfulfilled consumer demand. One would hope that the rest of these myths are similar in nature and equally disavowed.

Not so much for myth number two: "Piracy Doesn't Harm Sales"

This myth holds that that people who use content-sharing (“stealing” if you prefer) sites will never pay for the content in the first place so what’s the harm? Meanwhile, “honest” consumers will never turn to piracy.

Smith pointed to evidence that piracy sites are not benign. In one prominent example, he said that when NBC removed shows from on-demand site Hulu, piracy spiked not only for NBC shows but for other networks as well. Meanwhile, no one went out and bought DVD’s as a substitute for the shows that were no longer available on Hulu.

If you're anything like me (and millions of single women hope that you are), reading myth two directly after reading myth one causes you to make this face.

Translated from puppy to human: "What the &!@# are you talking about?" So, in debunking myth one we found that offering an easy legal alternative to piracy negates the harm caused by piracy. Then, for myth two, we decide that refusing to offer what customers want (streaming/digital content) is not to blame for customers not buying what they don't want (shiny plastic discs of content). A large segment of the population does not want the discs anymore and never will, but they do want disc-less content. When that was taken away, from paying customers mind you, they found it elsewhere. Pirate sites didn't hurt sales in that instance; the removal of ways to watch legitimately did. If that is the example Smith wants to use to "debunk" his second "myth", color me unconvinced.

But it's the example for debunking for the next "myth" that wins today's "I think my brain just pooped itself" award. Myth three is: "Anti-piracy initiatives don't work." And you'll never guess what legislation gets to serve as the chief example for why this supposed myth is false.

Smith points to a recent study of France’s HADOPI (a new enforcement regime) to argue that anti-piracy laws do work. He noted that the advent of HADOPI coincided with a big rise in legal online music purchases, particularly in genres like rap and hip-hop that experience high rates of piracy. At the same time, much of this increases took place before the law even went into effect; it appears that news about the law caused people to seek out legal alternatives.

The point is that laws like HADOPI (and presumably America’s impending “6-strikes” initiatives) can provide a clear deterrent to piracy.

This is a perfectly legitimate point, by which I mean it's complete crap that is itself a myth. The truth is that the French government has been so monumentally unimpressed with the performance of Hadopi, which did not show any increased sales, but cost a ton of taxpayer money, that they were seeking to slash its funding. Not exactly the kind of hallmark success you want to trot out as an example of why legislation can stamp out piracy. Separately, reports have shown that Hadopi may have temporarily decreased one kind of file sharing, but appears to have shifted it elsewhere -- which is what seems to happen every time one of these laws come along.

And so we're once again left unsatisfied by this economist, who notes at first that this is a business model issue before diving right back into the fallacies of the entertainment industry. It's bad enough to fall victim to statistics made up by certain industries, but it's even worse to use them to try to debunk supposed "myths."

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Filed Under: competing, free, michael smith, myths, piracy

36 Comments

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Mesonoxian Eve (profile), 20 Sep 2012 @ 8:44am

Is it just me, or does every time I see "economist", I see problems they've caused?

MPAA "economist": If we don't do this, our sales will drop (as they hide the record breaking sales data of theaters).

RIAA "economist": If we don't do this, our sales will drop (as they hide the record breaking sales data of concerts and merchandise).

Government "economist": If we don't do this, our taxes will drop (as they hide the record breaking subprime mortgage sales data before it lead to the worst global economic meltdown in history).

It never ceases to amaze me people who claim to be economists are furthest in understanding of their own profession than those who are being forced to either spend $30 on this bluray, or $30 on 30 songs because we've "choice".

Goodness, now my brain hurts.
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weneedhelp (profile), 20 Sep 2012 @ 8:56am

Every blog has a boB
http://paidcontent.org/2012/09/17/the-3-myths-behind-internet-pirates-always-win/

No really, it appears to be our beloved boB.
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Chronno S. Trigger (profile), 20 Sep 2012 @ 8:58am

Funny (not really) that this story comes out right after I buy a CD for the first time in years. Granted, it's the Minecraft soundtrack, but I didn't have to buy it. I could have just ripped it out of the .jar file I already have.

"shiny plastic discs of content"

Can I use that?
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Anonymous Coward, 20 Sep 2012 @ 8:58am

Re:
Economists don't do any of those things. Economists are the guys doing studies and compiling statistics that others take and make bogus recommendations like those with because they don't understand anything and are just seeing what they want to see. It's a lot like the difference between a researcher that determines that gene N1-A1 in mice results in a statistically significant difference in response to cancer treatment and the report who write the headline "Science cures cancer in mice, human trials eminent!"
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Dark Helmet (profile), 20 Sep 2012 @ 9:00am

Re:
"Can I use that?"

Of course not. I've copy-f&@#ed the shit out of it.

Oh, fine, go ahead....
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ECA (profile), 20 Sep 2012 @ 9:00am

FROM the old days
Umm,
When was it that we went from FREE, BROADCAST TV..
To paying cable, to watch commercials?

From having 10-15 LOCAL channels..to 200 that we DONT want to watch, out of 250 from all over the country..

From $0.25 cent weekend Theater movies...to $7-10...thats 30 times the price..and I wish my wages had gone up that much..

ANd now they are pissed we aint PAYING from a HULU release?? Of a cable show.. That in the OLD DAYs would have been FREE.. OR $2-3 at the theater..
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Anonymous Coward, 20 Sep 2012 @ 9:04am

you dont have to convince the readers here of the errors of this writers ways. how about pointing him to the truth about Hadopi and how it has cost the public, not the entertainment industries that insisted on implementing this crock of crap, 12 million euros per year for each of the 2 years it's been running, whilst returning a smidgen (150 euros fine to an innocent person!) for all the effort. here's the link to the report:

h**p://torrentfreak.com/french-3-strikes-court-fines-first-file-sharer-even-though-hes-in nocent-120813/
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The eejit (profile), 20 Sep 2012 @ 9:16am

Re: Re:
Does that mean that he got copy-seconds?
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Anonymous Coward, 20 Sep 2012 @ 9:31am

huh, what do these economist know about economics anyway...
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Anonymous Coward, 20 Sep 2012 @ 9:31am

Re: Re: Re:
*rimshot*
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Anonymous Coward, 20 Sep 2012 @ 9:58am

You forgot the Mal
"Shiny Plastic disks of content"

Should read...

Shiny Plastic disks of Malcontent
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Nina Paley (profile), 20 Sep 2012 @ 9:58am

that face
Do you really make a face THAT CUTE when you're disgusted by bullshit? I sure don't.
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Dark Helmet (profile), 20 Sep 2012 @ 10:08am

Re: that face
I'm a sucker for cute puppies; especially those I know personally, like this one :)
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GuyFromV, 20 Sep 2012 @ 10:26am

Imgur
Imgur kicks ass.
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Simple Mind (profile), 20 Sep 2012 @ 10:33am

Re:
I have never seen an honest economist. That is, every economist I see on the news or read online is wearing the glasses of their owner and describing the world from that distorted view. They are able to bend and ignore logic with the same ease they whore themselves out to their masters. The economy is complicated, no? With many layers of cause and effect left to interpretation.

You see a university professor on PBS News Hour, and think, "This guy teaches economics at university, so he must be impartial and really know his stuff." Then you hear him spout nonsense that seems to defy simple reality and think, "This guy is an idiot incapable of using simple logic and HE is a professor?" Go find out who is funding his research and then it will make a little more sense. It doesn't seem too surprising that those who's job it is to think about the influence of money are so easily influenced by it.
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Anonymous Coward, 20 Sep 2012 @ 10:42am

Re: Re:
You've got economists in general confused with economists doing consulting work for someone. The phenomena you describe is common in every profession: when you're paid to consult you have a bias towards opinions the person paying you for your opinion wants to hear.
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Greg Nelson, 20 Sep 2012 @ 10:49am

Is there a place with all these "myths" or arguments in one place with well-referenced refutations? I would love to see something like that.
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Stephan Kinsella (profile), 20 Sep 2012 @ 11:35am

"We at Techdirt are among those constantly calling for a factual analysis of intellectual property and the laws that purport to rule it. "

You cannot analyze policy from a purely "factual" point of view. Hume was right about the disinction between is and ought, fact and value. You have to import some norms in order to critique a given norm. This is not a factual endeavor; it is normative, value-laden. Not to say facts are irrelevant; but they are subsidiary to normative concerns.
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Simple Mind (profile), 20 Sep 2012 @ 12:02pm

Re: Re: Re:
You mean when National Association of Realtors says "here is our Chief Economist Lawrence Yun" (or whoever it is now) that Larry isn't really an "economist"? Or that when PBS news says "here is economist X from univeristy Y" that X isn't really an "economist"? Tell them that, not me. I am not the one that paraded them out and call them an "economist". The people that are saying they are an economist if they in fact are not would be the ones causing any confusion.
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Simple Mind (profile), 20 Sep 2012 @ 12:20pm

Re: Re:
Economists do do those things. There may be economists that also just compile statistics. But people calling themselves "economists" do those things. The reporter that wrote that headline about cancer didn't start calling himself a "scientist". And these people recognized as "economists" (though you claim not) go beyond reporting to also interpret and predict. Perhaps society would be better served with a different name for those that interpret than those that compile statistics. But for now, all we have is "economist".
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Keroberos (profile), 20 Sep 2012 @ 12:25pm

...when NBC removed shows from on-demand site Hulu, piracy spiked not only for NBC shows but for other networks as well.
Of course it did. People want convenience. Hulu was a one stop shop for most people. So when some of the content they were used to finding there disappeared, it became more convenient to switch to piracy for all of their content. Add the fact that piracy is more convenient--no need to wait (is it still 8 days for Hulu?) for the new stuff (it releases within minutes to hours on the pirate sites), and no limits on availibility.
Meanwhile, no one went out and bought DVD�s as a substitute for the shows that were no longer available on Hulu.
Um...did this idiot not do his research? The content that most people watch on Hulu is currently airing TV shows. How can anyone go out and buy DVD's of those? The only substitute for a particular episode of a show on Hulu, is that same episode available somewhere else (in this case, only the pirate sites).
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monkyyy, 20 Sep 2012 @ 2:43pm

fun fact, economists are full of it
srsly what have they actually been right about anything?
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Anonymous Coward, 20 Sep 2012 @ 4:27pm

"After all, why buy a song or a movie when you can simply download it for free at a pirate site?". That's what I say!
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Anonymous Coward, 20 Sep 2012 @ 5:47pm

Tim, great stuff. Too bad you are fighting myths and opinion by spewing myth and opinion. Just because Mike has repeated something often enough doesn't make it the truth. It's still opinion.
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That One Guy (profile), 20 Sep 2012 @ 6:12pm

Re:
If you disagree, then provide your counter-argument. Just saying 'you're wrong because you're wrong' isn't going to get you very far.
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ECA (profile), 20 Sep 2012 @ 8:17pm

I have to ask this
WHAT is the reasoning NOT to have more then 1 distribution system for NETWORK TV??

What is the problem with having MULTIPLE access points??

WHY USE cable/SAT ONLY??

Using the NET they could distribute the shows Directly to any Broadcaster..
is it MONEY RELATED??
it has to be.
but, I thought there were laws against Broadcasters and advertisers MIXING IT UP..
it CANT be control..otherwise we would NOT be able to record ANYTHING with DVD or VHS over the years..
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Anonymous Coward, 20 Sep 2012 @ 8:36pm

Re: Re:
Sadly enough that's all the effort he thinks he needs to put in for a convincing argument.
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Anonymous Coward, 20 Sep 2012 @ 8:44pm

Re:
Uh...the person identified as an economist is not, which could easily have been verified by reading his CV at Carnagie Mellon had the author of the news article and the poster here done so.

If a contributing factor to the poster's headache that yet another economist doesn't get it, well then he really has no one to blame but himself for relying on third party hearsay.
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Anonymous Coward, 20 Sep 2012 @ 8:50pm

I recently read a rather comprehensive academic study of the methodologies used by several researchers cited here as part of Mr. Masnick's "ton of evidence". Their conclusion? Well, you can read their paper and decide for yourself. I am sure TD can provide the cite since it keeps up on all research in this area, both pro and con.
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Anonymous Coward, 21 Sep 2012 @ 2:13am

Re:
My brains still Fume from the statement :D
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Anonymous Coward, 21 Sep 2012 @ 2:15am

Re: I have to ask this
otherwise we would NOT be able to record ANYTHING with DVD or VHS over the years..

and sure wouldn't if there had been that infamous ruling allowing for it.
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Anonymous Coward, 21 Sep 2012 @ 2:20am

Re:
Care to provide actual reference otherwise ?
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Anonymous Coward, 21 Sep 2012 @ 7:05am

Re: Re:
Yes, but that is for me to know and others to find out, and especially the articles posted by those associated with TD. They seem to have no problem finding studies they state support the positions they advocate. Surely in the process they find articles that do not (or at least make noteworthy comments of prior studies), and a fair discussion of such issues would make note of such articles.
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art guerrilla (profile), 21 Sep 2012 @ 10:04am

Re: Re: Re:
1. an 'economist' is anyone who calls themselves an 'economist'; there are no 'qualifications'...

2. economist jokes:
teach a parrot to say 'supply and demand', and you have an economist...
if you laid all the economists on earth end-to-end, they would never reach a conclusion...

3. the trouble i have had with 'econ 101' and economists in general, is that ALL KINDS of 'stuff' is NOT figured into their supposedly objective calculations: all that 'stuff' that is too inconvenient, or contrary evidence, or impossible to reduce to numbers/money, is branded as an 'externality', and SIMPLY IGNORED...
for example, they may talk about the cost of production related to the materials, labor, etc, but 'externalities' like pollution are COMPLETELY IGNORED...

art guerrilla
aka ann archy
eof
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art guerrilla (profile), 21 Sep 2012 @ 1:03pm

Re: Re: Re:
so-o-o-o, the takeaway here is: you're a dick ? ? ?

art guerrilla
aka ann archy
eof
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nasch (profile), 23 Sep 2012 @ 2:46pm

Re: Re: Re: Re:
for example, they may talk about the cost of production related to the materials, labor, etc, but 'externalities' like pollution are COMPLETELY IGNORED...

I'm not sure you know as much about it as you may think.

http://www.google.com/m?q=economics+externalities+pollution
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