Aussie Study: Infringers Spend More On Content Than Non-Infringers

Studies

from the try-and-buy dept

Thu, Jul 23rd 2015 4:09am — Timothy Geigner

We've argued for quite a long time that treating "pirates" like criminals instead of potential customers is a massive mistake for a whole host of reasons. There's the futility of the legal game, for instance, as well as the possible public relations nightmare that going after the public, even the infringing public, can create. But the best reason to not treat infringers like criminals is because they're often the best actual customers of content out there as well. In study after study, it's shown that a person who engages in some infringement spends more total money on movies, music, and video games than someone who gets everything legit. Pirates, scurvy-laden bastards as they may be, happen to be the creative industries' best customers.

And it turns out it's no different in Australia, where a recent government study bore out the same conclusion: infringers spend more money on content than content-saints.

Consumers who flirt with the morally ambiguous line of content consumption spend more money, according to a survey released by the Australian Department of Communications. Over a three-month period among respondents aged 12 and over, the survey found that those who consumed a mixture of copyright-infringing and non-infringing content spent on average AU$200 on music, AU$118 on video games, AU$92 on movies, and AU$33 on TV content. Consumers who only consumed non-infringing content spent only AU$126 on music, AU$110 on video games, AU$67 on movies, and AU$22 on TV; whereas pure copyright-infringing content consumers spent a mere AU$88 on music, AU$24 on video games, AU$53 on movies, and AU$8 on TV content.

In every market, the sometimes-infringer spends more. In the case of music and movies, the delta between the occasional infringer and the all-legal consumer is huge, much larger than the delta between the all-legal and all-infringement consumers. Video games and television don't show the same delta, but even in those arenas the occasional infringers spent more than the saint. Why? How?

Well, because the occasional infringer infringes because they're a fan, a fan perfectly happy to spend money on scarce goods where spending that money makes complete sense.

However, the survey also found that the majority of spending on music and movies was not on the content items themselves.

"For both music and movies, the majority of the average spend was not from purchases of either digital or physical copies. In the case of music, this primarily consisted of concerts and gigs, and in the case of movies, this primarily consisted of going to the cinema," it said.

And since the advents of the VHS and cassette tapes, that's always been the case. Theaters are about experience and live music for great acts will always be in demand, even if bootleg tapes and pirated DVDs are in hefty supply, which they are. For the content itself, the survey respondents essentially indicated that the juice wasn't worth the squeeze.

A majority of survey respondents said that they would pay for a music subscription service that charged AU$5 per month, and AU$10 per month for a movie subscription service. Only 5 percent of respondents said that nothing would make them stop consuming copyright-infringing content.

In other words, the "everyone just wants everything for free" line the entertainment industries have been pimping for decades is bunk. Instead, the overwhelming majority of customers and potential customers want content on-demand at prices that make sense, in which case they're perfectly willing to fork over the money. And even when they feel the price doesn't make sense, they're still willing to fork over money for things they do value as fans -- even though they may have become fans through pirated content. Either way, the industries win. It's just a matter of how much they want to win. Hint: crying over infringers who spend the most money isn't the optimal response.

Frustratingly, this government study was released roughly a month after Australia passed its version of SOPA, largely at the behest of industry lobbyists armed to the teeth with industry numbers showing industry losses at the hands of these same dastardly pirates who are spending so much money on their products. It sure would have been nice if the government had managed to have access to their own data before passing such draconian legislation, rather than relying on the historically unreliable data from the entertainment industry.

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Filed Under: australia, copyright, infringement, research, sopa, spending

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That One Guy (profile), 23 Jul 2015 @ 2:24am

Yes and no
Frustratingly, this government study was released roughly a month after Australia passed its version of SOPA, largely at the behest of industry lobbyists armed to the teeth with industry numbers showing industry losses at the hands of these same dastardly pirates who are spending so much money on their products. It sure would have been nice if the government had managed to have access to their own data before passing such draconian legislation, rather than relying on the historically unreliable data from the entertainment industry.

While it would have been nice if they'd had some actual data to base their decision on, odds are good that even with this data they still would have passed the law regardless, because the absurd numbers the 'entertainment' industry likes to throw out make for much better sound-bites than the real numbers from studies like this.

Much better PR from being able to trumpet how 'Piracy is costing creators billions every day, but I, and others passed a bill to stop piracy for good!', than to admit that pirates actually tend to be hefty spenders, at which point those pushing the *AA numbers will immediately jump on you for 'defending piracy'.
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- Ninja (profile), 23 Jul 2015 @ 4:25am
  
  Re: Yes and no
  They'd have ignored it alright. They are deaf under the piles of money being shoved in their ears. (That was a rather polite way of expressing it!)
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  - Derek Kerton (profile), 23 Jul 2015 @ 10:08am
    
    Re: Re: Yes and no
    "That was a rather polite way of expressing it!"
    
    Right. You could have gone with:
    
    "They'd have ignored it alright. Their thinking is constipated by the piles of money being shoved in their..."
    
    Well, you could have gone that route, but you kept it civil.
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  - charliebrown (profile), 24 Jul 2015 @ 1:02am
    
    Re: Re: Yes and no
    With the size of Tony Abbott's ears, that must have been a lot of money. Still, lots of small change equals lots of dollars when all is said and done.
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Anonymous Coward, 23 Jul 2015 @ 4:25am

And the study will be summarily ignored by the cartels because money and control.
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Anonymous Coward, 23 Jul 2015 @ 4:38am

"For both music and movies, the majority of the average spend was not from purchases of either digital or physical copies. In the case of music, this primarily consisted of concerts and gigs, and in the case of movies, this primarily consisted of going to the cinema," it said.

That is somewhat mixed news, as the studios get money from cinema performances, but the labels do not get much money from concerts and gigs, just their cut of any public performance licenses.
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- jupiterkansas (profile), 23 Jul 2015 @ 7:46am
  
  Re:
  Bad news for the labels, not the artists - which has kind of been the whole point of this debate from the beginning.
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  - Anonymous Coward, 23 Jul 2015 @ 12:50pm
    
    Re: Re:
    Look up "360 deal"
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- tqk (profile), 23 Jul 2015 @ 9:29am
  
  Re:
  ... but the labels do not get much money from concerts and gigs ...
  
  No, but they do get money from resulting sales from the gigs advertising the works. If you go to a concert and enjoy what you get, you're going to want to support their efforts to encourage them to do more, by buying the labels' stuff. Yes, many will just torrent free copies, but real fans don't want to screw their favourite artists. That doesn't encourage them to produce more.
  
  Carrot or stick? I think that stick is the way more expensive way for them to go, and it works abysmally for everybody except for the Righthaven and Prenda leech industry types.
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Ninja (profile), 23 Jul 2015 @ 4:43am

Well, I was in that legal+infringing part for a good while till the MAFIAA pissed me off enough so I'd simply go without. Netflix sort of brought me back in the middle and I occasionally spend money on games (specially when Humble Bundle lets me buy games I want but I despise the company, such as Warner or EA, and lets me give all money to charity or to the HB team). Many of the people I know are in that middle class too.

One particularly nice thing is that the older people (ie: my parents) usually buy into the arguments of the MAFIAA. But once I started showing them this middle field they became more 'piratey' and were able to see that the MAFIAA isn't the saint they thought they were. You know, preaching with facts. I've proudly converted quite a few people ;)
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- Anonymous Coward, 23 Jul 2015 @ 5:19am
  
  Re:
  You go without? You filthy pirate. 100% of lost sales are from piracy.
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David, 23 Jul 2015 @ 5:01am

Correlation and causation
In study after study, it's shown that a person who engages in some infringement spends more total money on movies, music, and video games than someone who gets everything legit. Pirates, scurvy-laden bastards as they may be, happen to be the creative industries' best customers.

Maybe that's just because people engaging in copyright infringement are bothered less by getting treated like criminals by default. In addition, they might be more certain when buying media that they'll manage to get actual use out of them.

I'm neither interested in becoming a target of criminal investigations, nor in wasting money on media I might not be able to use for legitimate purposes because of legal or technical restraints.

So I'm neither a customer of the recording industry, nor a bootlegger.
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Anonymous Coward, 23 Jul 2015 @ 5:21am

A good place for this industry to start would be to clarify the ownership issue.
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- That One Guy (profile), 23 Jul 2015 @ 2:12pm
  
  Re:
  Oh it's very simple. They own everything, you own nothing. You 'buy' only very limited rights to use, not own, and they are allowed to change those 'rights' after the fact, whenever they want.
  
  That clear it up for you?
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MadAsASnake (profile), 23 Jul 2015 @ 5:32am

I think you will find that the reality is a little different.

Those that pirate and buy are looking to get everything they can - they are fans. You know, like Grateful Dead fans

Those that only by sanitised monopoly price stuff are more likely to be older or not that interest in music
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Anonymous Coward, 23 Jul 2015 @ 8:22am

When infringers stop infringing it will be worse.
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Anonymous Coward, 23 Jul 2015 @ 8:28am

Curious why it never seems to be mentioned that rights holders focus enforcement on persons who distribute works to others. I do not recall an enforcement action against anyone, including "fans", who was not also making a large library of works available to others for downloading copies.
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- deadspatula (profile), 23 Jul 2015 @ 10:44am
  
  Re:
  That was at one point the RIAA's approach. But that hasn't been the approach for a long time. I guess you've never heard of copyright trolls? Rightshaven? Prenda? Malibu Media? All target end consumers. 6 Strikes? Targets End consumers. There are other efforts out there. Techdirt loves to highlight them.
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- Mike Masnick (profile), 23 Jul 2015 @ 11:41am
  
  Re:
  Curious why it never seems to be mentioned that rights holders focus enforcement on persons who distribute works to others.
  
  Because it's not true. We've covered many stories of rightsholders going after individual downloaders.
  
  Also, this is unrelated to the topic at hand. I wonder why you feel the need to try to change the subject...
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  - Anonymous Coward, 23 Jul 2015 @ 1:11pm
    
    Re: Re:
    Cites, please, since the only major cases I recall where persons were actually sued were also engaged in distribution. There are a few outliers, of course, like those associated with The Hurt Locker, but they are nowhere near the size you try and make them out to be.
    
    As for being charged with changing subject, seems to me quite fair to note that the takeaway of articles such as this consistently fail to mention that the major rights holders are not targeting "fans" indiscriminately, but rather place their emphasis on persons who are doing more than consumption...they are concurrently also associated with distribution.
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    - Anonymous Coward, 23 Jul 2015 @ 1:45pm
      
      Re: Re: Re:
      "There are a few outliers, of course, like those associated with The Hurt Locker, but they are nowhere near the size you try and make them out to be."
      
      "...The major rights holders are not targeting fans indiscriminately, but rather place their emphasis on persons who are doing more than consumption...they are concurrently also associated with distribution."
      
      Cites, please!
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- Anonymous Coward, 23 Jul 2015 @ 5:45pm
  
  Re:
  Oh, look. It's Mr. "I don't like you complaining about a law that will never be enforced against people it was designed to go after" Slonecker! Sorry, antidirt isn't in this thread. You'll have to go pander your troll defense services elsewhere.
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Anonymous Coward, 23 Jul 2015 @ 8:29am

Lets see, I avoid infringement but also avoid buying anything. Years back when Napster was around I used to download music and buy it, specifically to support the artists, but once the RIAA went after Napster I decided I would avoid buying anymore.
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Anonymous Coward, 23 Jul 2015 @ 8:35am

Makes sense to me.

I used to pirate and in turned bought a lot of content. I stopped pirating and in turn stopped buying that amount of content I used to.

Pirating was getting to expensive.
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Anonymous Coward, 23 Jul 2015 @ 9:10am

LOL
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PrivateFrazer, 23 Jul 2015 @ 9:12am

Not in the linked article
except that the CNET story does not mention anywhere that the report says (as Techdirt notes)'For each content type, those who consumed a mix of legal and illegal content
spent more money over a 3 month period than those who consumed 100% of their content legally, but those who consumed 100% of their content illegally
spent the least money.'
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- James Burkhardt (profile), 23 Jul 2015 @ 10:47am
  
  Re: Not in the linked article
  "And it turns out it's no different in Australia, where a recent government study bore out the same conclusion: infringers spend more money on content than content-saints."
  
  given that the table is also not included in the article, that statement suggests he is quoting the study, not the article.
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Anonymous Coward, 23 Jul 2015 @ 10:09am

there have been a lot of 'Independent Studies' that have arrived at the same conclusions over the last few years, so why do the entertainment industries still insist that they are becoming destitute because of the number of non-paid downloads? we all know it's complete bullshit put out by the industries as a valid excuse to be used by governments to bring in more restrictive and invasive surveillance laws on the people! there hasn't been a single study, apart from their own industry paid-for ones that have drawn different conclusions which obviously then means the whole object is not what the industries say concerning a massive loss of revenue but more of an excuse and reason to be able to spy on ordinary, innocent of 'most wrong-doings' people!!
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Whoever, 23 Jul 2015 @ 12:20pm

100% illegal
How do the 100% illegal consumers spend ANYTHING on content?

Are they paying for illegal content?
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- Anonymous Coward, 23 Jul 2015 @ 1:15pm
  
  Re: 100% illegal
  In Australia, that could mean they use a VPN to consume US Netflix. They have big problems with that sort of thing down under.
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- tqk (profile), 23 Jul 2015 @ 1:26pm
  
  Re: 100% illegal
  How do the 100% illegal consumers spend ANYTHING on content?
  
  Read the article! They go to concerts and cinemas. I'm forced to pay for my assumed pirating every time I buy blank media (Canada). There's lots of ways to support artists without supporting their label as well.
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  - Anonymous Coward, 23 Jul 2015 @ 1:53pm
    
    Re: Re: 100% illegal
    "I'm forced to pay for my assumed pirating every time I buy blank media (Canada)."
    
    If there were such levies in my country I think I would feel compelled to Download and burn a CDs worth of music. Even though I no longer have a means to play one outside of a computer.
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  - BernardoVerda (profile), 24 Jul 2015 @ 1:44pm
    
    Re: Re: 100% illegal
    Which could, could it not, be taken as evidence that this particular group simply has less disposable income available to spend on things they actually want and are willing to pay for?
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JBDragon (profile), 23 Jul 2015 @ 2:07pm

I believe this study 100%. I won't mention Illegal, but I PAY for Games I play!!! You should see my DVD, HD DVD, and Blue Ray collection, close to 1000 discs, start doing the math on that!!! I even go out to the movies around 8 times a month. Well I pay $35 a month for a MoviePass subscription. I was paying for SiriusXM radio, but i also pay for Amazon Prime which includes Music.

You can only squeeze so much from a person. If I have to pay here, I'll cut there.
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JMT (profile), 23 Jul 2015 @ 6:36pm

Abuse of the word illegal
Interesting read about this report:

http://www.gizmodo.com.au/2015/07/the-governments-copyright-infringement-report-has-some-prob lems-with-the-word-illegal/

As that article points out, a lot of activities are described in the report as "illegal" or implied to be illegal, when they're simply not. Things like using VPN's to access US Netflix from other countries (terms of dervice breach), downloading infringing content (a civil matter, not criminal), or simply using uTorrent and Bit-Torrent for anything (perfectly legal). It's another case of repeating an incorrect or inaccurate claim often enough to trick the simple-minded policy makers into over-reacting.
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James (profile), 23 Jul 2015 @ 6:45pm

Wait
Wait, if they are "100% infringers", then how do they spend any money at all? Shouldn't it be $0?
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Anonymous Coward, 27 Jul 2015 @ 12:04am

We Communicate newsletter from Communications Alliance - Issue No 22: 27 July 2015
From the latest Communications Alliance newsletter:

Improvements in the affordability and ready availability of online content in Australia are crucial ingredients to reduce online copyright infringement, Communications Alliance said in response to new research released by the Minister for Communications, Malcolm Turnbull.

Welcoming the research initiative, Communications Alliance CEO, John Stanton, said it pointed to the need for heightened efforts by rights holders to make legal online content available to Australian internet users in a timely and affordable way, as part of an integrated strategy to minimise online infringement.

Infringers said that the top three factors that would encourage them to stop infringing were:

A reduction in the cost of legal content (39%)
Legal content being more available (38%); and
Legal content being available as soon as it is released elsewhere (36%)

Only 21% of infringers said they would be encouraged to stop infringing if they received a letter from their ISP saying their account would be suspended.

“These results suggest that while there is a role for a copyright notice scheme Code in Australia to assist in fighting infringement, more work needs to be done to make legal content more affordable and more available, to combat the root causes of infringing activity.” Mr Stanton said.

“It is interesting that almost three quarters of those internet users who consumed content illegally were also accessing content legally – they were apparently not just looking exclusively for a ‘free ride’, but also were chasing the convenience that comes with ready availability of content.”

Communications Alliance, internet service providers (ISPs) and rights holders have cooperatively written a copyright notice scheme code (which does not includes sanctions such as suspension of consumers’ accounts) and have submitted it to the industry regulator, the ACMA. Negotiations are ongoing between the parties to finalise a commercial agreement, including cost-sharing, that will allow the Code and scheme to begin operating.

Extensive negotiations over cost-sharing have not yet resulted in an agreement, so ISPs and rights holders have jointly commissioned work by an independent expert to look at the costs that ISPs will incur to process Infringement Notices.

“The widespread pattern of online infringement in Australia, indicated by the research, underlines the fact that rights holders – as indicated by the Government – should be ready to pay the majority of the costs of operating a copyright notice scheme, given the enormous financial upside that will flow to rights holders from changing the behaviour of online infringers,” Mr Stanton said.

“Significantly, only 5% of infringers said that nothing would make them stop their activity – so the right combination of initiatives can certainly make an impact on what ISPs agree is a serious problem.”
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