Once Again Top Downloaders Are Top Spenders, According To UK Gov't Study

from the how-many-times-does-it-have-to-be-said? dept

If there's one clear trend that has emerged in recent years, it's that those who download and share unauthorized copies of files the most also tend to be the most avid purchasers of similar material. This completely negates the copyright industry's rhetoric that people who share files are just a bunch of freeloaders, suggesting instead that it's more a matter of sampling materials before going on to buy. It also implies that instead of seeking to punish such downloaders, the copyright companies should actually try to nurture them as potentially their best customers.

Even worse for the maximalists is that much of the new research revealing this trend is being conducted not by groups wearing eye patches and sporting wooden legs, but by government bodies keen to better understand the underlying dynamics of the online world. We wrote about one such study back in November, which had been commissioned by the UK regulatory body Ofcom -- the epitome of dull respectability. A follow-up report with the ponderous title "Online copyright infringement tracker benchmark study 'Deep Dive' analysis report" (pdf) has now appeared offering additional insights into why people download and stream unauthorized copies, how much they spend anyway, and what might encourage them to spend even more. The large sample size -- over 10,000 people -- makes its findings particularly valuable.

Here's one of the key results:

The Top 10% Infringers accounted for just 1.6% of the 12+ internet user population, but were responsible for 79% of infringed content. The Top 20% infringers, accounting for 3.2% of 12+ internet users, were responsible for 88% of infringements.

…

Despite their high levels of infringement, the Top 20% Infringers also accounted for 11% of the legal content consumed. The Top 20% Infringers also spent significantly more across all content types on average than either the Bottom 80% Infringers or the non-infringing consumers (£168 [$250] vs. £105 [$160] vs. £54 [$83] over the six month period covered).

As mentioned above, by now this is pretty much as expected, since survey after survey shows the same. But the current research explores a number of other aspects in greater depth, and presents new results we've not seen before. For example, in answer to the question "what would make you stop downloading or streaming content illegally?", the top answers by those downloading and spending the most were in the following order:

If legal services were cheaper
If everything I wanted was available legally
If legal services were more convenient\flexible
If everything I wanted was available legally online as soon as it was released elsewhere
If it is clearer what is legal and what isn't
If legal services were better
If a subscription I was interested in became available

As that makes clear, the main obstacles stopping them spending even more is unreasonable pricing and lack of availability -- things that the copyright world is still dragging its feet over.

The new analysis also tries to break down those accessing unauthorized copies into four broad categories that reflect their different attitudes. These are:

1. Justifying Infringers (9% of infringers, 24% of infringed volume, 2% of total digital consumers)

2. Digital Transgressors (9% of infringers, 22% of infringed volume, 2% of total digital consumers)

3. Free Infringers (42% of infringers, 35% of infringed volume, 10% of total digital consumers)

4. Ambiguous Infringers (39% of infringers, 20% of infringed volume, 9% of total digital consumers)

It's well worth reading the full report to see what the detailed analysis reveals about each of them. The research also tries to understand the different kinds of users who always access authorized copies, both paid and free, and then compares them in a variety of ways with the other group.

All-in-all, this is a valuable contribution to the field, and Ofcom is to be congratulated for continuing to commission innovative research that tries to get beyond the simplistic statistics that have hitherto been used to justifying ever-harsher punishments, in order to understand how the interests of both public and creators can be better aligned for their mutual benefit.

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Filed Under: best customers, downloaders, infringement, uk
Companies: ofcom

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 infringing content -- with 56% doing so in the last three months -- with 16% admitting to illegal content streaming, downloading or sharing. And of course, the numbers are much bigger for younger people, meaning that those overall percentages are only likely to increase over time. Of course, the amount of sharing varied based on the content, but the idea of getting infringing content this way is clearly quite mainstream.

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." The report also suggests that, when you take into account price elasticity of both downloads and subscription services, the industry appears to be overpricing both significantly, and they could probably make a lot more money with significantly lower prices, making it up (and then some) based on volume: Note that, in both cases, if prices went much lower than they are today, even those who currently pirate everything would be much more likely to pay. They have similar tables for other types of content, showing the same basic thing as well. The elasticity on ebooks is really quite impressive, actually: All of this paints the same basic picture that plenty of us have been arguing for over a decade: treating "pirates" like criminals is a mistake. They're often either the best customers or the potential best customers if they were better served by the industry, which often means offering things more conveniently and at a lower price. But the industry still resists this notion and wants to continue to demonize all infringement and any service that helps infringement. What a wasted effort.

Filed Under: buyers, pirates, studies, uk
Companies: ofcom

UK Regulators Allow BBC To DRM Its Content

from the lame dept

Following on the US FCC's decision to let Hollywood add some DRM to movies it broadcasts to television, it looks like UK regulators Ofcom have gone even further in allowing the BBC to similarly use a form of DRM to try to stop copying of HD programming. Not surprisingly, this also came at the request of the entertainment industry. But, again, this seems to be about breaking what your technology allows, just so that the entertainment industry can have the illusion of control. The reports all say things like "This will allow broadcasters to stop piracy of shows," but that's patently ridiculous. There are always ways around these blocks for those who really want to get there -- and those shows will still end up online just as quickly (or maybe a few seconds later). And at that point, the locks are meaningless... except to folks who didn't want to have to buy an expensive locked down settop box that is required to view this kind of content. It's an incredibly anti-consumer move that has little to no benefit to the entertainment industry, other than in their minds.

Filed Under: bbc, drm, hd, uk
Companies: bbc, ofcom