Study: Digital Piracy’s Harm Exaggerated by Entertainment Industries

A new study by the London School of Economics suggest that the movie, music, and video games industries have been exaggerating the impact that file sharing has had on their bottom line and found that – for some creative industries – copyright infringement may actually be helping to boost revenues.

Researchers found that internet-based revenues have been a large part of the music industry's growth since 2004 because the industry has adopted methods of distributing and consuming content modeled after file-sharing services such as BitTorrent, Pirate Bay, and Napster.

"Contrary to the industry claims, the music industry is not in terminal decline but still holding ground and showing healthy profits," said study author Bart Cammaerts, senior lecturer in the LSE Department of Media and Communications, in a release. "Revenues from digital sales, subscription services, streaming and live performances compensate for the decline in revenues from the sale of CDs or records."

Researchers found a similar pattern with the movie industry. While sales and rentals of DVDs have declined by about 10 percent between 2001 to 2010, global revenues have increased by five percent in that same time period. The U.S. film industry was worth $93.7 billion in 2012, researchers said.

"Despite the Motion Picture Association of America's claim that online piracy is devastating the movie industry, Hollywood achieved record-breaking global box office revenues of $35 billion US in 2012, a six per cent increase over 2011," the report says.

Video games and book publishing have also been successful at finding new revenue streams within the digital space and are making very healthy profits, the report notes. In 2013, the global book publishing industry was worth $102 billion, more than any of the other entertainment industries.

Researchers also argue that the online culture of sharing music, video games, movies, and other content has spawned new models of producing and distributing creative content that don't necessarily rely on exclusive ownership of that content. Creative Commons licenses are increasingly being used by some musicians to release their content on music-sharing sites, the report said.

"The increasing variety of online creative practices means that some representatives of the creative industries are becoming less concerned about copyright infringement through individual file sharing," the authors write. "Many musicians share their music and are very happy for their fans to download their music, envisaging future sales."

The report points out the 10 million user-generated videos copying "Gangnam Style" by South-Korean musician Psy that were created on YouTube after the original song was released and went viral as evidence that digital culture thrives on the ubiquitous sharing of digital content.

Finally, the research suggests that file-sharing – both legal and illegal – can boost awareness of a product and boost sales that can often offset the losses in revenue from illegal sharing of content.

Researchers close by saying that countries like the U.K. and the U.S. need to reform their copyright enforcement regimes, which are out of step with reality.

"Insisting that people will only produce creative works when they can claim exclusive ownership rights ignores the spread of practices that depend on sharing and co-creation and easy access to creative works; this insistence privileges copyright owners over these creators," the report says.

You can read the whole research report here (PDF).

Source: CBC

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