Economist Combats 'Myths Of Piracy' With More Myths

from the i-see-your-osiris-and-raise-you-a-zeus dept

We at Techdirt are among those constantly calling for a factual analysis of intellectual property and the laws that purport to rule it. I won't sit here and claim that disinformation has never come from people on our side of the argument as well, but we've seen time after time after time how the entertainment industry and their maximalist sympathizers tend to live in the kind of make believe world that puts anything this science fiction author has come up with to shame. The mental gymnastics required to follow along industry studies tend give my brain a sprained frontal lobe. That said, it takes a special kind of malfunction to decry supposed myths about piracy and refute them with a couple of made up myths of your own, as economist Michael Smith of Carnegie Mellon does (via Jeff John Roberts at Paid Content).

We actually start off on solid footing debunking myth numero uno, a common one espoused by the content industries: "You can't compete with free"
This myth is often invoked by content owners to justify heavy-handed enforcement measures against piracy sites and individual consumers. After all, why buy a song or movie when you can simply download it for free at a pirate site?

A quick look at the thriving content markets at Amazon, iTunes and elsewhere shows this notion is bunk. All of these sites are competing with free very successfully. As Smith points out, the lowest cost (including free) is not the only determinant of consumer purchases.
Ah, sweet, wonderful logic, with its simple formula of giving people easy access to what they want at a reasonable price as a method for staving off piracy, a symptom of unfulfilled consumer demand. One would hope that the rest of these myths are similar in nature and equally disavowed.

Not so much for myth number two: "Piracy Doesn't Harm Sales"
This myth holds that that people who use content-sharing (“stealing” if you prefer) sites will never pay for the content in the first place so what’s the harm? Meanwhile, “honest” consumers will never turn to piracy.

Smith pointed to evidence that piracy sites are not benign. In one prominent example, he said that when NBC removed shows from on-demand site Hulu, piracy spiked not only for NBC shows but for other networks as well. Meanwhile, no one went out and bought DVD’s as a substitute for the shows that were no longer available on Hulu.
If you're anything like me (and millions of single women hope that you are), reading myth two directly after reading myth one causes you to make this face.
Translated from puppy to human: "What the &!@# are you talking about?"
So, in debunking myth one we found that offering an easy legal alternative to piracy negates the harm caused by piracy. Then, for myth two, we decide that refusing to offer what customers want (streaming/digital content) is not to blame for customers not buying what they don't want (shiny plastic discs of content). A large segment of the population does not want the discs anymore and never will, but they do want disc-less content. When that was taken away, from paying customers mind you, they found it elsewhere. Pirate sites didn't hurt sales in that instance; the removal of ways to watch legitimately did. If that is the example Smith wants to use to "debunk" his second "myth", color me unconvinced.

But it's the example for debunking for the next "myth" that wins today's "I think my brain just pooped itself" award. Myth three is: "Anti-piracy initiatives don't work." And you'll never guess what legislation gets to serve as the chief example for why this supposed myth is false.
Smith points to a recent study of France’s HADOPI (a new enforcement regime) to argue that anti-piracy laws do work. He noted that the advent of HADOPI coincided with a big rise in legal online music purchases, particularly in genres like rap and hip-hop that experience high rates of piracy. At the same time, much of this increases took place before the law even went into effect; it appears that news about the law caused people to seek out legal alternatives.

The point is that laws like HADOPI (and presumably America’s impending “6-strikes” initiatives) can provide a clear deterrent to piracy.
This is a perfectly legitimate point, by which I mean it's complete crap that is itself a myth. The truth is that the French government has been so monumentally unimpressed with the performance of Hadopi, which did not show any increased sales, but cost a ton of taxpayer money, that they were seeking to slash its funding. Not exactly the kind of hallmark success you want to trot out as an example of why legislation can stamp out piracy. Separately, reports have shown that Hadopi may have temporarily decreased one kind of file sharing, but appears to have shifted it elsewhere -- which is what seems to happen every time one of these laws come along.

And so we're once again left unsatisfied by this economist, who notes at first that this is a business model issue before diving right back into the fallacies of the entertainment industry. It's bad enough to fall victim to statistics made up by certain industries, but it's even worse to use them to try to debunk supposed "myths."
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Filed Under: competing, free, michael smith, myths, piracy

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  1. icon
    nasch (profile), 23 Sep 2012 @ 2:46pm

    Re: Re: Re: Re:

    for example, they may talk about the cost of production related to the materials, labor, etc, but 'externalities' like pollution are COMPLETELY IGNORED...

    I'm not sure you know as much about it as you may think.

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