Is There Any Value In Cracking Down On 'Piracy' If It Doesn't Increase Sales?

from the just-saying... dept

Hadopi, the organization set up in France to administer its three strikes law (kicking people offline based on accusations — not convictions — of copyright infringement), has put out a new report looking at how things are going 17 months after its creation. It highlights a bunch of benchmarks to suggest that infringement is dropping and that people are no longer visiting file sharing sites. The report links to a bunch of reports showing a decline in traffic to those sites. They even include some data on traffic to sites like Megaupload — despite the fact that cyberlocker downloads are not covered by Hadopi. However, as the TorrentFreak link above points out, it’s worth noting that even if this is true, it hasn’t turned into revenue:

For more than a decade the entertainment industry has claimed that digital piracy is the main cause for the gradual decline in revenues. So if piracy is down massively in France, one would expect that the revenues are soaring, right? But they’re not.

If we look at the French music industry we see that overall revenues were down by 3.9 percent in 2011.

Likewise, the French movie industry is still going through a rough period with revenues dropping 2.7 percent in 2011. Ironically, an industry insider even blamed online piracy for this drop.

To sum it up. in 2011 online piracy was slashed in half according to the Hadopi report, but despite this unprecedented decline the movie and music industries managed to generate less revenue than in 2010. If we follow the logic employed by the anti-piracy lobby during the past decade, this means that piracy is actually boosting sales.

Now, we’ve been pointing out for years that spending so much time and resources on reducing infringement is pretty pointless if it doesn’t lead to an increase in revenue. And it appears that such a revenue increase isn’t magically appearing (just as we predicted). Now, of course, there was that report that was trumpeted by Hadopi supporters claiming that there was an increase in iTunes sales, but the details showed that was correlated to new releases in Apple products (and Christmas) more than three strikes. And this new report actually shows just how little the iTunes boost really was. It has a chart showing different music services and how their usage has changed in France during Hadopi’s existence:

What you see… is kind of a mixed bag. iTunes usage increased just slightly — but not that much at all, considering the numbers the reports brags about concerning decreases in infringement. You do see a big jump on two services: Beezik and Spotify, both of which allow for the ability to listen to music for free. You also see decreases in traffic to Deezer and Universal Music. If the industry was right that reducing piracy would magically boost all of these alternatives, there would certainly be a more noticeable trend. This really raises significant questions as to what’s the point of all of this. Implementing Hadopi cost French taxpayers quite a lot of money and if it’s not actually helping the industry, what good is it?

It just comes back to that same important question: which is more important? Reducing infringement or increasing revenue? The industry has acted for years as if the former is the most important (and when we ask this question, they insist that the former would lead to the latter). Yet, now the evidence doesn’t appear to support that. If anything, Hadopi’s report, while patting itself on the back for reducing infringement, really highlights just how useless Hadopi has been and what a waste it’s been for both French taxpayers and the French entertainment industry that has supported it so strongly.

Filed Under: france, hadopi, piracy, sales