I want to talk about the financial impact of piracy today. First, I'll give you this quote from Slate:
Much of the debate about SOPA and PIPA has thus far centered around the entertainment industry’s absurdly inflated claims about the economic harm of copyright infringement. When making these calculations, intellectual property owners tend to assume that every unauthorized download represents a lost sale. This is clearly false. Often people copy a file illegally precisely because they’re unwilling to pay the market price. Were unauthorized copying not an option, they would simply not watch the movie or listen to the album.
So, let's talk about lost sales. That's what this whole SOPA/PIPA fuss is all about, right? Studios claim that they are losing money and if piracy continues unchecked, studios will lose a lot of money. Piracy apologists counter that studios are making record profits, and the effects of piracy are minimal, and might even be beneficial.
In their estimates of actual monetary losses, the MPAA paid for a study that was conducted by L.E.K. Consulting. The study examined and tried to calculate the toll piracy took from the industry. I have not read the entire report...but let's be honest, you haven't either.
However, a few people who actually did read the report (including the venerated libertarian think take the Cato Institute) seemed to think these numbers were complete bullshit. Even me, the lonesome anti-piracy crusader, had expressed some doubt.
Then I thought about it for a bit.
A couple months, actually.
A couple months, actually.
Turns out, maybe the one-to-one sales loss isn't so crazy after all.
To demonstrate, let's do a thought experiment. If people are right, and they use the "well, I pirated it because I wouldn't have paid to see the movie anyway" excuse, if we remove piracy from the equation the "no net loss" argument should still hold up.
Because that's what they're claiming, right? That generally there is little-to-no net loss due to piracy?
Let's say Mike wants to watch a movie. He kinda' wants to watch A Few Good Men, because he heard it was pretty good, but he's not like, really super-interested in watching it. It just sounds interesting.
In a world with piracy, Mike could either torrent the movie or find a streaming site -- super easy. He wouldn't even have to get up off of the couch and the movie would be up and running in a couple of minutes.
But what if there were no piracy?
He could still see the movie if he wanted to. He could buy it on Amazon and watch it instantly ($9.99). He could buy it from iTunes and watch it instantly ($9.99). He could sign up for Netflix and have the DVD delivered to his house ($7.99 a month after free trial). He could stream it through Gamefly ($7.98 a month). He could rent it from a Redbox kiosk ($1.20, if you can find it). He could buy a used DVD on Amazon or eBay (under $5.00). Or he could rent it from one of those antiquated buildings called a video store (under $4.00).
But maybe he doesn't want to wait, or it's just too damn expensive (because $5.00 is a lot of goddamn money).
So instead of watching that Academy Award-nominated "masterpiece," he decides to do something else with 138 minutes of his life.
Here's where the thought experiment really kicks in -- can you find Mike an activity that does not represent a "lost sale"? Remember...there is no piracy allowed.
Maybe he'll play a video game (which he purchased). Or watch some TV (which pays broadcast rights and also generates advertising revenue). Maybe he'll just listen to some music (which he purchased legally) or watch a movie he already owns (and purchased legally). Maybe he'll watch some YouTube videos (that generates advertising revenue for Google, and they have partnerships with content creators) or catch up on a show like The Daily Show or South Park (both online, both generating ad revenue) or watch something saved on his DVR (which is subscription-based, and has commercials that many people still watch even though they don't have to).
In every scenario above, the content creator is making money that they wouldn't be making if Mike chose to watch a pirated movie. At some point, somewhere down the line, a sale is being lost due to piracy.
You can quibble about the amount, but maybe those claims by the MPAA and RIAA don't sound so ridiculous after all.
"But hang on a second," you bleat. "What if, instead of being cooped up in a house all day like a pale friendless neckbeard, Mike decides to go work in the yard? Or go for a walk? Or play with his son? Or go to the park? Or build a bookshelf in his garage?"
If you thought that, congratulations! You've fucking failed!!! If Mike had wanted to do those things he would have done them. Remember -- Mike wants to watch a movie, not fucking re-create a scene from Leave it to Beaver.
A person who wants to consume media actually wants to consume media. Sounds counter-intuitive...I know.
So if Mike wants to watch Jack Nicholson yell his way out of a cross examination he can do so legally...but admittedly those avenues are a little hit and miss right now. There are all kinds of weird varying costs, blocked countries, arcane release windows, and a poor selection of titles available.
See, online content distribution is a relatively new medium -- it's going to take time to find the right balance between profit and sustainability. This includes problems with worldwide distribution rights, release windows, exclusivity, broadcast deals, et cetera. When entering a market like this, it's hard for any business to wrap it's heads around an appropriate business model.
For example, in the field of home entertainment (leaving box office numbers out of the equation), movies and television shows cost about the same to produce as major release video games. When purchased new, the price point for each is about the same, with newly released video games costing $59.99 while new Blu-Ray DVDs cost $49.99. Yet, the highest grossing Blu-Ray of all time was Avatar, with 2.7 million discs sold. Compare that with a recently released video game, Modern Warfare 3...which sold almost three times that amount in the first 24 hours alone.
Obviously people don't want to pay too much for a movie. Movies engage the consumer for 2 or 3 hours max. Video games can engage the consumer for over 75 hours. The market for each home entertainment product is totally different -- typically people want to buy video games and rent movies.
So, what's the fair price for an online movie rental?
If you think that price is $0.00, then the "no net loss" argument holds water. You'd also be completely wrong, and shut up. Last night I paid $3.99 to rent the movie Wanderlust from Amazon.com (and you should too...because it's fucking hilarious). I think that's a fair price...and I felt good about myself after watching it, because finding it for free online would have been soooo goddamn easy.
What I'm saying is...I understand how hard it is to avoid piracy sometimes. I've struggled with it. The guy who writes The Oatmeal struggled with it (and lost). The guy who composed this image struggled (and lost). But I think we have a responsibility as consumers to give these companies (who create things that so many people enjoy) the benefit of the doubt, and try to pay for the content we consume...even when it's really hard to do so.
Shit...it happened. I'm moralizing. I hate moralizing.
For the record, I'm not judging you if you've pirated stuff in the past. I really honestly don't care. Just...for the good of the industry I'd like you to consider the other options first, especially if you can afford it (and you all can).
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I have a question, and it's not a pointed question of any kind. How do you feel about somebody who uploads a full-length video to YouTube (or whatever) that's of an otherwise unavailable movie? There are hundreds of older titles out there that simply aren't available on DVD or other legal means or watching (unless you luck out and your local rep theater gets a 35mm copy that they play one night). But someone somewhere recorded the one time that movie played on cable TV in 1987 and they transferred their VHS recording to Quicktime and uploaded that to YouTube. Now, the content creator makes no money if I watch that film on YouTube... But since the movie is completely out of distribution (this also goes for old 45 records from decades past, long since out of print), it's ethically okay if I watch it, right? Or not right?
ReplyDeleteFirst I just want to reiterate (I recognize that your question is not a pointed one, but I thought I'd post this disclaimer anyway in case anyone feels like I'm trying to lay on guilt) that I'm not quietly judging anyone who watches pirated content. It would be terribly hypocritical of me, as I used to consume quite a bit of the stuff in the early days of the internet, and even now it's hard to avoid (and the line of what is "infringing" versus "fair use" is, by it's very nature, legally hazy).
ReplyDeleteBut as to your specific question...well, that's a tricky one. It has been explored in other media such as software (check out the Wikipedia article on "abandonware" for a thorough legal and ethical analysis), but that's mostly due to the evolving nature of computer technology.
Personally, I feel that if the distributors are not interested in enforcing their copyrighted materials, the online poster is not monetizing the content (via advertisements or otherwise), and it's truly unavailable to watch via legitimate channels, then yeah...I suppose watching it is ethically reasonable, though still "technically" illegal (unless the content has been released into the public domain by expiration of copyright or by the copyright owner).
Of course, even if the poster isn't monetizing, Google (or whoever is hosting the content) will be making money...so there's that.
Now, in defense of unenforced copyrights, an argument could be made that making copies of is important for preservation...but unfortunately there is no case law in the books covering this issue, since inactive copyright holders aren't exactly the litigious type.
I happen to work for a company that has some quantity of content that is not commercially available (ever heard of "Coal Black and de Sebben Dwarfs"?). Of course, I can't reveal our policy regarding titles of this nature (because I really like my job), so I'll just say that content owners are not legally obligated to enforce their copyright.
This means there could potentially be instances where the content owner is aware of online infringement, yet opts to take "no action" on the infringement, regardless of the legality of the posting.
Is that vague enough for you?
Thanks for the reply. Perhaps a simpler and more revealing answer might be: If you heard of a movie that you really wanted to see, but found that it was absolutely impossible to find legally, yet there was a copy of it on a particular website... Would you watch it? Or would you say, "Dammit - I want to see it, but I refuse to do so unless I can see it legally"?
ReplyDeleteOn a side note, I'd like to know your thoughts about the difference between this and, say, a place like Eddie Brandt in the Valley, which specializes in renting out-of-print videos (often on VHS). The argument could be the same: Somebody bought a copy of the movie legally, then opted to let other people watch it for money. The content creator makes no money off the rentals, since they got paid (at least a little) from the initial sale of the VHS to the store, and that was that. Thoughts?
The second one is easy -- it's called the "First Sale Doctrine," which basically limits the copyright owner's distribution rights to the "first sale." Or, to put it another way, "Once the work is lawfully sold or even transferred gratuitously, the copyright owner's interest in the material object in which the copyrighted work is embodied is exhausted."
ReplyDeleteSo long as that work isn't being copied, then it's up to the owner of the legally reproduced copy as to how they "dispose" of that work, either by re-selling, renting, or throwing it away. When something is uploaded to the internet, it's being "copied," and the first sale doctrine no longer applies.
As for the first one, if there is literally no possible way to purchase a legal, authorized version of the content, then it probably means the owner is not interested in enforcing their copyright. In that case, if it's available on some site somewhere, then I think that morally it'd be okay to watch the film. It's not necessarily "legal," and the owner of the site should at least offer to reimburse the copyright owner...but at the same time it's a bit of a gray area.
As for me, even now I have a hard time staying away from "infringing" material. Like, if I remember a funny scene from Night Court (like the ones with Brent Spiner as a redneck) and I look it up on YouTube, I can watch it...but I'm technically watching infringing material...and no money is going to the genius that is Reinhold Weege.
I certainly don't have a "zero tolerance policy" to viewing infringing content, I just would encourage folks to purchase as much content legally as is reasonable.