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

Tweet about this on TwitterShare on FacebookShare on Google+Share on RedditEmail this to someone


  1. 0

    Love it, thumbs downed without having the guts to respond with any sort of counter point.

    Fact is, it's a double edged sword and it's not entirely benefitial to the artists and the excuses for illegally uploading others work has next to no bearing anymore due to free streaming options like Soundcloud, Bandcamp and so on. If you're a fan of a indie band/artist that may not have a large following and uploaded their shit without permission, you've made it harder for them to sell their album and more or less likely fucked them over be it because they'd like to recoup their investment on the costs of making the album or because album sales were going towards touring which isn't at all cheap, especially if you plan on going outside your home country. Again, if it does turn into actual music sales or merch sales then great but for every one person that does that several don't.

    As I already said, the corporate side of it has always been full of shit, it doesn't so much hurt them but it HAS hurt the industry as a whole and the bands/artists who may not exactly be the ones that sell hundreds of thousands or tens of thousands of copies of their albums. Sure, you can self publish but most artists/bands don't have the deep pockets to really do it and major label backing is still a good thing to have.

  2. 0

    Wow, that's about 10+ years late.

    It's absolutely exaggerated but that's not to say it doesn't hurt individual artists, especially independents and probably aren't being considered in this study. Most make little off their music in the first place because they're not selling thousands of copies some maybe not even hundreds of copies and in this day and age with free, legal streaming options there's little excuse to download illegal copies of music anymore or using the excuse of "promotion" to upload without permission and illegally share it, now it just makes you a complete asshole and does more to fuck the artist over than help. Now thankfully SOME of the people who illegally download a song or album (or stream) will actually buy the album or at least the songs they like and if it leads to them also buying some of that artist's merchandise or buying tickets to see them live then awesome because that's what a lot of artists have to significantly rely on today, more so than music sales itself. Unfortunately only a fraction of those who download an illegal copy of something will actually do it.

    I feel a rant coming on about this so I better stop.

  3. 0
    GrimCW says:

    Mostly because for some reason the "investors" are often so uninformed, or misinformed, that they fear the piracy levels regardless. Theft is theft to them, whether its a penny or a nickel, they don't care. Its still money.

    SOOO many times the companies are pushed to add the DRM just to satisfy their ignorant share holders, despite new DRM's often dip a companies credibility and stock price all at once… TBH they should try to educate the share holders and such rather than just being horrendously stupid about it, ousting the consumer base, trying to reconcile for it later, and never really recovering as a final result.


  4. 0
    ZippyDSMlee says:

    Dose not matter that "piracy" is more promotion than about all out theft. They will still decry the sky is falling and make things so normal customers are screwed by their inept DRM.

  5. 0
    E. Zachary Knight says:

    Here is the problem. The RIAA couldn't possibly care less that the overall music industry is doing great and making tons of money. The problem that the RIAA is having is that the share of the money its member companies have is shrinking. That is their problem. The pie may be getting bigger, but they are having to share that pie with a lot more people. They want the whole pie to themselves. If they have to step on a few(a whole lot) of indie musicians to do it, then that is acceptable.

    Same could be said for the MPAA and the ESA.

    E. Zachary Knight
    Divine Knight Gaming
    Oklahoma Game Development
    Rusty Outlook
    Random Tower
    My Patreon

Leave a Reply