Copy Protection Does Not Mean More Sales

Business Models

from the and-the-flip-side dept

We’ve been pointing out that this isn’t true for years now, but the entertainment industry is still so focused on “stopping piracy” rather than “what’s the best business model,” that they still don’t seem to realize that many of their efforts to “stop piracy” actually do nothing to help their bottom line, and often do plenty to hurt their performance. We’ve already shown (with multiple studies) that people who download unauthorized copies often tend to be the best customers, but there’s also the flip side of that equation, which is whether or not preventing unauthorized file sharing increases sales. We’ve suggested for years that even if the industry could slow down unauthorized copying, it’s unlikely that it would directly lead to an increase in sales.

David Pogue has an article in Scientific American saying the same thing, highlighting how his own attempt at copy protecting some ebooks didn’t lead to more sales, but that freeing up his ebooks actually did increase sales:

I make most of my income writing computer books. To my great distress, I discovered that they are widely available online as PDF files. But when I griped on my blog, my readers challenged the assumption that I was losing sales.

?First of all,? they said, ?you?re counting a lot of people who never would have bought the book in the first place. Those don?t represent lost sales. And you?re not counting the people who like the PDF so much, they go buy the print edition or discover from the PDF sample that they like your writing.? One reader challenged me to a test: make one book available both on paper and as an unprotected PDF file. Report the effect of sales after one year.

I did that. The results were clear: Piracy was rampant. The book was everywhere online. But weirdly, my readers were also proved right. Sales of the printed edition did not suffer; in fact, they rose slightly year over year.

Now, there are two things worth pointing out. This particular story isn’t entirely new. We wrote a similar story a year and a half ago when Pogue wrote nearly the same story for the NY Times. Also we tend to disagree with a straight “give it away and pray” sort of setup that Pogue went with here. However, that doesn’t mean the point doesn’t stand.

No matter what you think, morally or legally, about file sharing, if there are ways to embrace what your fans/consumers want in this manner and then make more money at the same time, does it really matter that you dislike the infringement? To put it another way: would you prefer making more with infringement, or less without infringement? Too many people assume that by cutting out infringement that leads to them making more, but there’s more and more evidence that says that’s simply not true.

Filed Under: copy protection, david pogue, sales