Dear RIAA: Pirates Buy More. Full Stop. Deal With It.
from the just-wondering dept
Just a few days after Joe Karaganis posted his response to the RIAA's favorite researcher, Russ Crupnick of NPD Group, who suggested that Karaganis must be drunk and have little knowledge of statistics to publish a study showing that pirates tend to buy more -- and then revealing his own numbers that showed the exact same thing -- UK regulatory body Ofcom has come out with a study saying the same exact thing again (found via TorrentFreak).From this, I assume the only logical conclusion is that Ofcom officials are drunk and should have their statistics "licenses" taken away. That, or, it's pretty obvious that people who pirate aren't all just "evil pirates," but also include the industry's best customers, who are apparently being somewhat under-served by the industry. And that's actually supported by other data in the report. When asked what would make people stop infringing, people wanted cheaper legal services and services that had everything they want available to them legally, rather than piecemeal efforts that leave it impossible to get what you want much of the time. It also becomes clear that infringement is not on the margins, but a common activity. 66% of people noted that they had downloaded, streamed or shared
The study also looked at what they spent on, and, not surprisingly, money spent seems to be shifting to scarce goods -- the things that can't be "pirated." In the music world, that includes merchandise and live, as well as online subscriptions, rather than "buying music."
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I'm surprised the *AAs haven't hosted one of these surveys as a way to get a mass of people to admit to it so they can sue them. I shouldn't be giving them ideas, should I?
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The problem is that in the long run basic economic principles always trump government laws. Basic economics says that the price is driven to the marginal cost of production. As has been covered in this blog many times, the marginal cost of reproducing a digital file is near zero. The industry tries to resort to arguments about costs of production, but basic economic theory says that doesn't matter. Other things that don't matter to economics are moral issues like "theft" and "piracy."
One interesting thing about the definition of marginal cost is that it includes a component for "fair compensation" or "fair profit." That is a slippery concept that a lot of microeconomics discussions overlook. Unfortunately for the producers, it is consumers who get to decide what fair means. The interesting thing about the data in this study is that it looks like consumers are willing to include allowance for profit. The physical production costs are near zero, but the data suggests that people are willing to pay rates above zero if they consider it a reasonable rate. Some of the price people are willing to pay does include paying for convenience, but experiments with "pay what you want" show that on average people are willing to pay just for the sake of supporting content creators.
The content industry is used to having monopoly and oligopoly power to set prices. It is not surprising that they are fighting laissez faire market realities. They think that stronger laws will let them return to a world where the producers got to set the prices. However, more draconian laws will not win over basic economics any more than current laws have done.
The real solution is to do what economics says must happen. Producers must find more efficient methods of production and marketing. They must sell things like convenience and the viewing experience. If the RIAA companies don't know how to produce an album for under five million dollars, then they are going to be replaced by someone who knows how to produce the same quality for a few thousand dollars. If the MPAA companies don't remember how to make movies that cost less than 100 million, then they will be replaced by indies that do.
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Artists/companies as welfare dependents. Hmm, that would work for bringing the GOP on board. Or make their heads explode!
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Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
It's wrong! Pirates are dirty thieves! Clearly people who download 100% illegally are less likely to pay, therefore they should all go to jail.
The cops are coming to take all your Big Pooh-funded piracy-tops away!!!
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Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
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Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
I usually don't read posts in advance of making mine, nor often go back, so on that score, you're wasting your own time and making the site repugnant to others. Both those are fine with me. Ad hominem isn't an argument; mine then wins by default.
"Insiders" don't have the wits to see that advance posts reveal themselves as unable to counter mine and because unable to just simply ignore mine, as rather childishly fearful.
You're ankle-biters yapping your heads off at a cat outside the fence.
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
As I said before o_o_t_b, is nothing more than someone who can't do anything but espouse the propaganda that his corporate masters feed him. He/she is as fruity as a nutcake or as Shakespeare once said, "He's mad tis true, tis true." Mayhap he/she will wake up one day and realize that the drip on their meds has been turned up too high all this time.
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
It would if it wasn't loaded by a handful of other fallacies (which, funnily enough, also include ad-hominems).
But on one thing I agree with you: the pseudo-troll posts are actually more annoying than yours. And you aren't the worst offender in terms of trolling either. At least you add some "color" to the boring old comment section.
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Re: Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
Pinkish-red to be specific.
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
Woof woof.
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
"You're ankle-biters yapping your heads off at a cat outside the fence."
You are really quite stupid aren't you? You start off with saying ad homs aren't an argument, thus you win by default and then close with an ad hom. So basically, you may have started off with the win by default, but you felt the need to include the ad hom thereby forfeiting your win. So basically, you shot yourself in the foot after your competition missed the mark? Why? Because you're OotB, which is all the reason you need.
But yeah, you're totally "reasonable and literate by comparison". [rolls eyes] Perhaps that might be true when compared to the other TD loon, bob, but compared to the parodies of yourself you still are quite out there, if not more so because you appear to believe the nonsense you type and act quite smug about it.
But of course all of this is surely flying over your head. Why? Because it is based on using logic and reason. Two things you couldn't be more unfamiliar with if you were just born 5 minutes ago.
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
"Insiders" don't have the wits to see that advance posts reveal themselves as unable to counter mine and because unable to just simply ignore mine, as rather childishly fearful. "
So you're admitting (AGAIN!) that you don't read the articles, will just spew forth whatever leaks from your brain, regardless of whether or not it pertains to the article, and declare yourself a "winner by default"?
Your arrogance knows no bounds...
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
Does this lack of reading include the main articles? Your arguments and their supporting premises often indicate as such.
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
"I usually don't read posts in advance of making mine, nor often go back"
Admitting to being ignorant, and then not wanting to discuss, only broadcast your message.
You make it easy to appear reasonable and literate by comparison.
You forgot your byline on this post. Somebody struck a nerve I think.
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Re: Re: Out_Of_The_Balls (or, a pre-emption of stupidity for the sake of moving past it already)
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C'mon, this stuff isn't hard....
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As far as the media companies are concerned, you can always bleed more blood from a turnip. But a pirate who pirates $10k in media probably doesn't have $10k in discretionary income that they can just spend on that media, especially in this economy.
People who have more than $10k in discretionary income to spend on entertainment (which means that they have much more than just $10k in discretionary income because nobody would/should be stupid enough to not save for rainy days/disasters/etc) might be too busy with their high paying jobs to have time to pirate a lot of media anyway.
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FTFY
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If a pirate copies a song, from a non industry computer, using his own resources, it costs the industry exactly $0.00 in additional expenses. If you remove the pirate the industry is no better off than it was with the pirate. Now what is often confused is the industry likes to claim it costs them $.99 in sales. This is a fake cost. The reason it is a fake cost, is that the producer never had that $0.99 to begin with. It never received nor spent that $0.99, the cost is simply imaginary.
Now if you can come to terms with this cost being imaginary, you can instead re-word it to be a "potential" profit. The question will then change from "How can i get rid of this cost burden?" to "How can i convert that potential earning, into a real earnings?".
Summary:
Removing imaginary costs = Impossible
Converting imaginary earnings into real earnings = Possible
Hmmmm... i wonder where i should focus
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Pareto Principle
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Cue the bad analogies...
Except copying things that are easily copied is nothing like stealing Doritos.
This entire collision of technology and economics is based on simple facts that you seem intent on ignoring. Wishful thinking simply isn't productive here.
You either play the cards you're dealt or you lose by default.
No amount of crying will help. Neither will attempts to abuse courts or law enforcement. Someone ELSE will gladly take our money.
Not only is the public against you. Not only is technology against you. You also have less stupid competitors to deal with. You are not alone. You are not the only one out there competing for our money or our time.
Your limited monopoly will only get you so far.
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If you're saying that the reason you charge me 10 to 20 bucks for Movie X is because it cost you $100 million to produce, I, the customer, won't pay. The value (which is a concept separate from price) of that movie to you is different to me. You value it at $100 million and want to charge as much as possible. The value to me is a couple hours entertainment and there's a myriad of things vying for my attention, saying "I'll entertain you!" I see your price, scoff at it, and will look at something else. Perhaps a movie priced lower, perhaps one that didn't cost so much.
The initial production costs are something you NEVER EVER EVER mention to the end consumer. I don't care and will never care, in fact it is physically impossible for me to care about your $100 million budget. So shut up about it and find some other way to entice me to pay.
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- Price for 1 adult ticket at local movie house = $13
- Snacks because I'm not a sneak and buy there = $7.50
- Gas to and fro = $1 (I live close by)
So, for ~2 hours of entertainment + ~10 hours of conversations with friends, I have to spend $21.50. Of course, I could spend just $19.99 in the Blizzard store and get the WoW Battle Chest and a full month of game time which would yield dozens of hours of entertainment along with dozens of hours of conversation with friends. Hmm... which is the better deal? Even better, if I wasn't all that interested in the movie, I can wait until it comes out on TV and watch it for free.
So why again does a $100 million movie budget count?
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Or not. Younger people become older people, and older people tend to have more disposable income and less time, which means that you start paying for convenience (e.g. not scouring the internet looking for a good copy of a movie).
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For convenience you just put the RSS feed of the trusted sources and it downloads everything without you having to take any action.
http://www.makeuseof.com/tag/how-to-use-rss-feeds-to-download-torrents-easily-and-automat ically/
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You only need to look for it if you don't know what you are looking for, because if you do I am betting that all decent pirates already have those in their RSS feeds for torrenting.
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People's tastes are formed when they are young. Hence the popularity of "oldies" radio stations with boomers. If their tastes and buying habits are formed around the indie labels and artists then it isn't a good sign for the major labels.
People carry grudges from their teens and twenties into their thirties and forties. If a young person is alienated by the labels are they going to be willing to give a dime of that disposable income to the labels? Do you suppose people who get 3-strike, 5-strike, or 6-strike notices are ever going to think be willing to give disposable income on a company whose accusation cut off their Internet as a young person?
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I buy way more movies (than I should) now because I'm not a broke student, but MOSTLY because they are in the discount bins. Some "new" movies are still $17.99 and up, well I am not paying that, but I will pay $10 or less if I know it is good (aka seen it before and like it) or $5 or less if it appears interesting.
Yes, I've spent upwards of $5 on a single DVD without knowing whether it was good or not. That's not too much of a risk, but $15 at the theatre or for a "new" DVD, nope, not worth the risk.
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Which would be true if legal offerings where actually more convenient. Once you know where and how to look, which really isn't hard to figure out, you can easily find everything you want in the quality you want with out any restriction.
The industry has to realise that they are competing not only with "free" but an unrestricted highly convenient service. You can compete with free but part of that is offering accesses to legal and convenient alternative.
As this generation grows older things like regional restrictions are going to seem more and more antiquated odd and frustrating so the industry better start adapting or they are going to lose out hugely.
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How is it good business to persecute your best customers and best word of mouth advertisers? Are they going to buy even more music if they're in jail? Or if you cut off their internet connections? That's cutting of your nose to spite your face. "We don't want the money of our best customers because they should be giving us even more money!" Lunacy.
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Logically then, if people were paid to consume, no one would.
This asserts complete nonsense. The main flaw is the weasely "much more likely to pay"; even Mike can't bring himself to say that people would pay rather than get the same thing for free. -- Reminds of the old saying about sex, doesn't it? But here's Mike saying he'd rather pay for it!
Along with that, never forget that Mike's goal seems to be to do away with copyright altogether, so his vision is to allow anyone and everyone to flog the same content. In Mike's bizzaro-world, there's never any need to protect the source producer of the content or prevent grifting.
Click here for Mike "Streisand Effect" Masnick!
http://en.wikipedia.org/wiki/Streisand_effect
Help make Mike the #1 quipper on the net! -- Click one for The Quipper!
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Re: Logically then, if people were paid to consume, no one would.
What's so holy about copyright law? I want to get rid of it, but Mike is on the record as saying he doesn't want to get rid of it, just reform it. Again, you are attacking something HE HAS NEVER SAID. If you want to attack someone who desires to get rid of copyright law, attack ME. Not Mike. At least then, the target and point of your "debate" would be correct. If you continue to attack Mike over this, then it shows you are not debating in favour of copyright, but only attacking for the mere sake of attacking.
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Re: Re: Logically then, if people were paid to consume, no one would.
In the case of strenuously defending Megaupload, Mike definitely views that take down as wrong. Now, Megaupload produced ZERO of the content that was available for anyone do downlaod, and knowingly had terabytes of infringing content on it. I suppose you can argue those facts. -- My point here is that Mike wishes Megaupload and others to operate outside of copyright, effectively doing away with it. So you and he can hedge and dodge and pull out legalistic quibbles, but Mike is definitely NOT upholding copyright.
Take a moment for Mike "Streisand Effect" Masnick and click:
http://en.wikipedia.org/wiki/Streisand_effect
Actual unsolicited testimonial: "Until I read Techdirt.com, I didn't know what shameless self-promotion was!"
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Re: Re: Re: Logically then, if people were paid to consume, no one would.
Mike is a believer in evidence-based policy, but has never said he wants to get rid of copyright. That is his position and he has every right to stand by it. You are not attacking his stance based on the strengths or weaknesses of his view-point: you are attacking him simply for having it!
Also, we've covered the Megaupload case. We here at Techdirt have covered it to death, and will continue to cover it. You are ignoring every single thing the US has done wrong in trying to prosecute DotCom and Megaupload. If DotCom is in fact a criminal who has stolen millions, fine, lock him away. But only after a fair trial. Not after a drumhead trial, not after SWAT style arrests taken at the behest of biased parties.
You hunger for a world where copyright cannot be violated. For your information, such a world does not exist. The only way for such a world to exist is to accept Orwellian level surveillance into our lives, to monitor literally every letter we write with a pen, to say nothing of every keyboard stroke. That is why I oppose copyright: the only way for it to be effective is to willingly give up many of my human rights.
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Re: Re: Re: Logically then, if people were paid to consume, no one would.
You're an idiot, out_of_the_asscrack. You have the the reading comprehension skills of darryl, with the only difference between the two of you is that you somehow managed to improve your spelling.
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Re: Re: Re: Logically then, if people were paid to consume, no one would.
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Re: Logically then, if people were paid to consume, no one would.
That's exactly what happens. People ARE willing to pay for something they can get for free. What's more, people are willing to pay a second time for something they're already paying for. Don't believe me? Take a look at the bottled water industry. People pay taxes to supply perfectly drinkable water to their houses. They then pay again to buy more tap water in plastic bottles.
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Re: Re: Logically then, if people were paid to consume, no one would.
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Re: Logically then, if people were paid to consume, no one would.
Out of the Blue proclaims at every opportunity that he'd never support hostile governments known for human-rights abuses, wrongful imprisonment, and slavery. The gentleman doth protest too much, methinks. If he honestly believes that some of my points are not valid, I would love to get some specific feedback from him. Those�I count myself among them�who accept that I am absolutely shocked and appalled that Out of the Blue could voice the kinds of gross lies and historical misrepresentations that he so often does do know one thing. We know that he has an innate tropism to make serious dialogue difficult or impossible. Out of the Blue will almost certainly tiptoe around that glaringly evident fact because if he didn't, you might come to realize that it is easy to see faults in others. But it takes perseverance to promote peace, prosperity, and quality of life, both here and abroad.
Truth be told, this is just simple math. That is, if A is more stupid than B, and B is more stupid than C, then A is more stupid than C, right? In case you don't have the secret decoder ring, A is a vitriolic dork; B is a puerile fanatic; and C is Out of the Blue. I close this letter along the same lines it opened on: I find Out of the Blue's ethics to be plebeian at best.
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Re: Logically then, if people were paid to consume, no one would.
Nice insertion of bullshit here. Mike has repeatedly said in main articles he is NOT against copyright, but the ABUSE of copyright.
But don't let facts get in the way of your logic.
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I bet that if they did that low price, and then ALSO offered the content globally at the same time and easily accessible to anyone, the total revenue would be much, much bigger.
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Why can't Hollywood at least offer the same convenience, even if they don't believe the economics work for the price?
To get a useful file from BluRay movie I have to buy a physical copy and rip it myself. When the likes of the Pirate Bay offer a superior experience to the legitimate copyright holders, you have to question Hollywood's business strategy.
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Yet another point of failure
DRM makes any system more complex and more failure prone.
It's another moving part to seize up and stop the engine.
Since BluRay is more effective DRM, it's also more of a bother to decrypt. It's even more of a bother to use with "legitimate" tools. It's much more bothersome than DVD where the DRM aspect is usually a minor speed bump.
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Re: Yet another point of failure
That and the ridiculous pricing.
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Minor Correction
The 56%/66% figure comes from Table 2.2.1a on page 11 and covers *all* online consumption of content.
It's also worth noting that no individual category goes over 8% of any illegal activity (and that's music)... so people who pirate one thing doesn't seem to be pirating other types of stuff.
[Disclaimer: I haven't had a chance to read the full report yet - just skimming.]
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Re: Minor Correction
Have updated the post to reflect this...
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Some pirates
Record companies are stuck in their ways, but so are pirates.
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Re: Some pirates
Instead, the effort and time they wasted trying to stop piracy has allowed it to evolve into what we have now: a distributed global network of easily accessibly pirated material.
And as for legal alternatives, we only have a handful which are crippled by idiotic license agreements to the point of being nearly unprofitable for the service providers and almost useless to the end-user.
It's madness. Everyone involved could (actually, should) be much better off by now. Instead, the only ones that are "winning" are the pirates, the ones "they" have been fighting against all this time.
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Re: Re: Some pirates
No it wouldn't.
Napster did evolve into a pay site. And iTunes also showed up. And dozens of other legal sites. People still pirate. Why? Because they're selfish, greedy sociopaths that don't care if they rip off artists.
Pull your head out of your ass and deal with reality.
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I can't get Pandora in my country. So no-one gets my money for that. Americans only recently got Spotify. I only recently could get Netflix (with a pathetic selection), and I still can't get Hulu. It's like they really really don't want my money!
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Re: Some pirates
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Re: Some pirates
For the simple, obvious reason that minors have far less disposable income than adults, but still have more or less the same amount of content vying for their attention. Last I heard, it wasn't exactly common for a teenager to have a credit card they can use to pay for a subscription to a music streaming service.
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Re: Some pirates
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DEA
Even most rights holders class the DEA as the wrong response when there are better options but it seems the Government wishes to spend all �5.8 million on the DEA only to see this doomed scheme crash and burn the hard way.
I think the people need to ask the UK Government some hard question here seeing that this is public money that they are spending on protection of commercial groups. The Government has told us that this �5.8 million of public money would be recovered as rights holders use the DEA. However in France their Hapodi is having issues when the French Government is tired of supporting the scheme and plans to cut their funding. Then in NZ they only moan at the price and make no realistic effort to pay the actually cost of the scheme while the entire RIAA ignore this NZ system and have not even sent out one single notice.
So what is this lunacy? Most of them don't want to use it and don't want to pay for it. So does that mean that UK public tax funds is to be used to provide regular prop-up support funds for the DEA? We sure as Hell won't get our �5.8 million investment back.
Here is an idea when the Government should make them pay 100%. They after all are the ones who wanted the DEA and so they should also now pay for it. Should they not do that then the DEA should be allowed to die.
Then all this hassle is being done to attack their best customers. Politics = Lunatics.
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Help my math. 56%?
people who downloaded 100% legally: 1279
people who download 100% illegal: 216
people who are a mix of legally & illegal: 186
(216 + 186) / (1279 + 216 + 186) = .239
which gives us only 24% of those that are the base for those charts who admin to have downloaded illegally.
If the 56% who are mentioned in this article to have done so in the last 3 months is supposed to be taken as 56% of the 66%, that should still be 37%(ish) shouldn't it?
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Batman
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Doesn't matter.
Doesn't matter if that person spends 99% of their income on their stuff. If they get one thing without paying, they are "pirate scum" who deserve to be strung up in the middle of town, next to their families and friends, and stoned to death by rich executives in suits.
This is why these dinosaurs need to die.
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Re: Doesn't matter.
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Dear Techdirt
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Interpretation of Results.
For streaming services they're probably accurate, though.
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And then, once they are making over 30 shows per month, someone in the music industry comes and tries to make then sign a contract - where the musician gives up their rights to the recording, and the company start trying to make all the previously shared files "illegal". At least, a significant part of the brazilian musicians refuse giving a percentage of the profits of the shows to the recording companies.
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so nice but
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