Three Strikes May Decrease File Sharing, But If Sales Keep Dropping, Who Cares?

from the and-so-it-goes dept

A year ago, we asked what could possibly be the "value" in "cracking down on piracy" if that didn't then lead to increased sales. It's an issue that we've dealt with time and time again. We ask people a simple question: would you rather stop piracy or make more money? Most people note that the latter is the real goal. If the former does not lead to the latter then what good does "stopping piracy" actually do? The answer is none at all. The latest data out of France shows that, despite Hadopi (the administrators of the 3 strikes program) claiming some sort of victory because stats on file sharing are down, the bigger issue is that the sale of recorded music keeps declining. Digital Music News, who normally supports the the "anti-piracy" side of things, has some slides from French labels that show that sales keep decreasing, even as Hadopi highlights a big drop in file sharing and the use of cyberlockers. But all that really matters is this one:
This is the key point that we've been making for well over a decade now. "Fighting" piracy is not the same as making more money. The focus should be on figuring out ways to make money. Even if we believe that copyright infringement is a bad thing, if efforts to stop it are both expensive and ineffective, why continue? It makes absolutely no sense. Instead, let's focus on the areas of the industry that have shown that they are expanding and where there's lots of money to be made for those who embrace them.

Oh, and for what it's worth, you have to imagine that the "declines" reported in file sharing and cyberlockers severely undercounts those things too, as using some rather basic tools can let people hide that sort of information from being collected -- and the efforts by Hadopi to "educate" the public likely educated them about how to use VPNs. It does not appear to have educated them to go back to buying at the same levels as the artificially inflated rates in the past.


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    Skeptical Cynic (profile), Feb 11th, 2013 @ 6:35am

    Here is the next big Mega idea

    Someone is going to set up a service like On Live virtual desktop where the servers are outside the affected countries.

    You log in to your virtual desktop and then hit the torrent sites and start downloading whatever you want. Disconnect and then check back in later to see if they have finished.
    Then download those files via an encrypted connection and file sync program like what is used with Dropbox or Box.net

    Set that up, charge a reasonable fee for bandwidth used and I bet you get a million subscribers in weeks.

    Because all the files and users' account are encrypted you as the operator have no idea what the people are doing with your service. Legally you are in the clear.

    Use "international privacy laws" as the reason you keep no logs of anything that the users access and that all user data is encrypted with a password that only the user knows and that you have no way to bypass.

    Done and done.

    Now where is my business plan software and my log in info for gust.com

     

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      WysiWyg (profile), Feb 11th, 2013 @ 8:12am

      Re: Here is the next big Mega idea

      I think it's called a "seedbox".

       

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      BeaverJuicer (profile), Feb 11th, 2013 @ 8:13am

      Re: Here is the next big Mega idea

      Or a VPN. It's cheaper than licensing the desktop VMs from Microsoft.

      And they're already widely available.

       

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        WysiWyg (profile), Feb 11th, 2013 @ 8:15am

        Re: Re: Here is the next big Mega idea

        But a VPN don't offer the service that the OP asked for though.

        Then again - why use Microsoft products?

         

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      Rabbit80, Feb 11th, 2013 @ 8:21am

      Re: Here is the next big Mega idea

      Sure is a seedbox...

      I can log in from any browser, add torrents, download them on a 100Mbit connection then I can download them to my own computer using either a web interface, (s)ftp or stream directly to XBMC. 100GB space costs me less than $10 per month. It even provides me with a proxy service that nicely bypasses any blocking my ISP may be implementing!

       

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      zyodei (profile), Feb 11th, 2013 @ 9:11pm

      Re: Here is the next big Mega idea

      Already exists:

      zbigz.com

      Terrible name though :( I couldn't remember it for the life of me.

       

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    silverscarcat (profile), Feb 11th, 2013 @ 6:37am

    Man, the comments on that page...

    They seriously think Google can police the internet.

    Seriously, they should remember that IP is NOT easy to spot.

     

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      Anonymous Coward, Feb 11th, 2013 @ 9:16am

      Re:

      Apparently, all Google is good for is pumping information on terrorists and stealing from media companies?

      ...Who knew?

      /s

       

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    WysiWyg (profile), Feb 11th, 2013 @ 8:13am

    VPN isn't free...

    I think that the increased use of VPNs and similar things might go some way to explain this decline.

    When I felt that I had to start use a VPN, I sure took that money from the money I would otherwise spend on movies.

     

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    Anonymous Coward, Feb 11th, 2013 @ 8:16am

    This is the key point that we've been making for well over a decade now. "Fighting" piracy is not the same as making more money. The focus should be on figuring out ways to make money. Even if we believe that copyright infringement is a bad thing, if efforts to stop it are both expensive and ineffective, why continue? It makes absolutely no sense. Instead, let's focus on the areas of the industry that have shown that they are expanding and where there's lots of money to be made for those who embrace them.

    I think the fight against piracy is largely to hang on to what you've got. You may not make more money, but we have seen how piracy has proliferated as it became easy and risk free. Anti-shoplifting measures probably don't increase sales either. But failing to take measures doubtlessly would make the problem worse. I don't think there's much of an argument that if all content was easily available for free with no legal or financial consequences, many of the people who currently pay will start feeling like chumps and start freeloading.

    I agree that there are ways to increase revenue- largely via more robust, user-friendly distribution. But the viability of that will be undermined by the proliferation of piracy.

     

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      arcan, Feb 11th, 2013 @ 8:28am

      Re:

      he does make a reasonable point there.

       

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      WysiWyg (profile), Feb 11th, 2013 @ 8:29am

      Re:

      The big flaw in your analogy is that shoplifting carries a very real loss - you loose your product. You stop someone and you keep your product - you have stopped the loss.

      The loss, if any, with piracy is a loss of sale. So if they don't get that back, then they don't win anything on fighting it. They still loose, only now they loose the money invested in fighting piracy as well.

      And no, it's not the fear of getting caught that keeps us on the straight and narrow, for the most part the risk is minimal.

      I remember several years ago when my mom was (very) pregnant with my littlesister. We were shopping, and
      I wanted a comicbook. She put it in her pocket since she had nowhere else to put it, and forgot about it. She didn't realize until we were at the car. Guess what she did, with her gigantic pregnancy-belly? She went back inside and payed for it. Not because she had to, not because she could get caught, not because it was easy (did I mention that she was pregnant?) - because it was the right thing to do.

      I also remember realizing several years ago that it would be ridiculously easy to murder someone and get away with it - for the most part it's your connection to the victim that gives you away. But we don't do it, because we don't want to.

       

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        Anonymous Coward, Feb 11th, 2013 @ 8:42am

        Re: Re:

        There's no real world analogy to digital copies. I offered the examples to counter the oft-mention contention that infringers wouldn't necessarily be buyers. I think the same is true of shoplifters. If money wasn't a concern, they'd likely just pay for it.

        And yes, there are people like your Mom with a strong moral compass. They are the exception, not the rule. Infringement has become akin to jaywalking. Yes, it's illegal but there's a widely held perspective that jaywalking is relatively benign and largely unenforced with inconsequential penalties. While I think most people would agree that infringement is regarded as a more serious matter- more flaccid enforcement would soon diminish the perceived seriousness and encourage more people to engage in infringing behavior.

         

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          Anonymous Coward, Feb 11th, 2013 @ 8:56am

          Re: Re: Re:

          Not think enough. People also infringe because infringing seems natural, given all of the subconscious feedback they have in their daily lives about the way culture evolves.

          Parents know that no matter how many times they say, "eat your vegetables" if neither parent eats vegetables or makes that a natural part of their lives, the kids won't respond. They respond much more fundamentally to the way their parents BEHAVE.

          Borrowing/Infringing is something all artists (writers, musicians, etc.), politicians, regular citizens, etc. do to some degree.

          Telling them to behave differently is just confusing. Then make the law VERY difficult to follow (fair use confusion, patents that don't make sense) and you just torpedoed any chance of anyone complying.

           

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          Karl (profile), Feb 11th, 2013 @ 8:58am

          Re: Re: Re:

          I offered the examples to counter the oft-mention contention that infringers wouldn't necessarily be buyers.

          In fact, every reputable study ever commissioned has found that those that pirate music, buy much more music, legally, than those that do not.

          So, no, an infringer won't necessarily be a customer. That much is certainly true. But if you take action against infringers, then you're also taking action against those who are currently your best customers.

          The problem with these laws is that they will really only affect those who wouldn't have bought the album anyway. They likely don't affect the ones who are the best customers. The latter are more hardcore pirates than the former, and will find some technical way to continue infringing.

           

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            Anonymous Coward, Feb 11th, 2013 @ 9:21am

            Re: Re: Re: Re:

            "I offered the examples to counter the oft-mention contention that infringers wouldn't necessarily be buyers."

            In fact, every reputable study ever commissioned has found that those that pirate music, buy much more music, legally, than those that do not.

            So, no, an infringer won't necessarily be a customer. That much is certainly true. But if you take action against infringers, then you're also taking action against those who are currently your best customers.


            I agree with that. But I'm a very good customer of my local grocer. Do you think that should mean anything if I occasionally shoplift there too?

            The problem with these laws is that they will really only affect those who wouldn't have bought the album anyway. They likely don't affect the ones who are the best customers. The latter are more hardcore pirates than the former, and will find some technical way to continue infringing.

            It's clear (at least to me) that enforcement targets the "soft middle". For argument's sake, let's say that 15% of the population of digital entertainment consumers are hardcore infringers. Another 15% wouldn't ever consider infringing. The soft middle are ones who engage either occasionally or often, largely because it's easy and risk-free. That remaining 70% are the ones for which I think enforcement makes a difference and can be effective.

             

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              ChrisB (profile), Feb 11th, 2013 @ 9:38am

              Re: Re: Re: Re: Re:

              > But I'm a very good customer of my local grocer. Do you think that should mean anything if I occasionally shoplift there too?

              Piracy has much more in common with fare-evasion than stealing.

              Here's a better example. I buy a monthly bus pass and ride the bus. Rarely, I'll forget to get a bus pass on the 1st of the month. I'll usually apologize to the bus driver and say I get a bus pass and forgot today. The few times it happened, the drivers are grumpy, but let me on.

              Now technically, I should pay the single-ride bus fare. But that is ridiculous. I buy a pass. I already contribute. Technically, I shouldn't have this free ride, but logically, of course I should.

               

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                Anonymous Coward, Feb 11th, 2013 @ 9:47am

                Re: Re: Re: Re: Re: Re:

                "But I'm a very good customer of my local grocer. Do you think that should mean anything if I occasionally shoplift there too?"

                Piracy has much more in common with fare-evasion than stealing.

                Here's a better example. I buy a monthly bus pass and ride the bus. Rarely, I'll forget to get a bus pass on the 1st of the month. I'll usually apologize to the bus driver and say I get a bus pass and forgot today. The few times it happened, the drivers are grumpy, but let me on.

                Now technically, I should pay the single-ride bus fare. But that is ridiculous. I buy a pass. I already contribute. Technically, I shouldn't have this free ride, but logically, of course I should.


                Sorry, I have to judge this a swing and a miss. If you forgot to buy your monthly pass until February 2, yet rode "free" on February 1- your monthly pass covered the cost of that ride. That you bought 10 dvd's and illegally downloaded 2 is very different.

                 

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                  Anonymous Coward, Feb 11th, 2013 @ 10:02am

                  Re: Re: Re: Re: Re: Re: Re:

                  And what if said DVDs are not legally available in your country, due to geo-locational bullshit?

                   

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                    Anonymous Coward, Feb 11th, 2013 @ 7:14pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    And what if said DVDs are not legally available in your country, due to geo-locational bullshit?

                    Try an alternative. It won't kill you.

                     

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                  Chronno S. Trigger (profile), Feb 11th, 2013 @ 11:16am

                  Re: Re: Re: Re: Re: Re: Re:

                  "That you bought 10 dvd's and illegally downloaded 2 is very different."

                  Is it? What if those 2 you downloaded are two of the ten you bought? What if you bought those 10 because of the 2 you downloaded? Ether way you're paying for the "license" to watch the movie, you're just watching it in your own way.

                  I presently own the DVD and Blu-Ray of Star Trek (2009) and still have two ticket stubs from seeing it in theaters. I wouldn't have any of that if I hadn't downloaded it first. Yes, I'm a filthy pirate, but I'm a pirate that payed my dues.

                   

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                    Anonymous Coward, Feb 11th, 2013 @ 11:22am

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    Yes, I'm a filthy pirate, but I'm a pirate that payed my dues.

                    Well, at least there's one thing we agree on...lol.

                     

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                  PaulT (profile), Feb 12th, 2013 @ 2:25am

                  Re: Re: Re: Re: Re: Re: Re:

                  Only if you're have bought those DVDs in the first place. If not, the supplier of those DVDs have lost less than the bus company.

                   

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                  Ninja (profile), Feb 13th, 2013 @ 7:34am

                  Re: Re: Re: Re: Re: Re: Re:

                  So you are saying that since I pay my cable TV that has shitloads of movies and music (music channles) then I'm free to pirate? Good to know!!!!

                   

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              Anonymous Coward, Feb 11th, 2013 @ 9:43am

              Re: Re: Re: Re: Re:

              You're completely ignoring the cultural aspects. You can't tell people that every single bit of content is "owned" when common sense and culture since the dawn of time tells them it isn't true.

              And worse, you want the average person to be able to figure out how much "borrowing" is too much and they can't!

              Human nature tells us that we can use each other's ideas. That is in stark contrast to the control of digital content which is in itself, a wealth of "ideas". The specific expression is SECONDARY--that's what you're not getting.

               

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              Karl (profile), Feb 11th, 2013 @ 10:02am

              Re: Re: Re: Re: Re:

              I agree with that. But I'm a very good customer of my local grocer. Do you think that should mean anything if I occasionally shoplift there too?

              First of all, piracy is nothing like shoplifting. Aside from the obvious differences between theft and infringement, you'd be punished far, far less for shoplifting than you would be for piracy.

              But I digress. The issue is whether the implementation of anti-piracy laws, also has the effect of driving away those pirates from your product. For example, someone cut off from the Internet under HADOPI also wouldn't be able to download tracks from iTunes.

              A bigger problem, of course, is when copyright holders call pirates "thieves," or "cheapskates," or "freetards." Nothing like name-calling to attract customers to your business. Plus, as Dave Allen said in his rebuttal to David Lowery, "the music industry is most likely the only industry to ever, ever, sue its own customers."

              That's not even considering the effects enforcement has on innovation, free speech or an open Internet, none of which seem to bother corporate rights holders one iota.

               

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                Karl (profile), Feb 11th, 2013 @ 10:08am

                Re: Re: Re: Re: Re: Re:

                Oh, sorry, meant to end with the shoplifting comparison.

                Suppose that your grocery store had a guard posted at every exit to the store. To leave, you had to unpack your grocery bags, and show your receipt to the guard, who would then check it against every single item in your bags.

                I suspect you wouldn't be a good customer for very long.

                 

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                  Gwiz (profile), Feb 11th, 2013 @ 10:45am

                  Re: Re: Re: Re: Re: Re: Re:

                  Suppose that your grocery store had a guard posted at every exit to the store. To leave, you had to unpack your grocery bags, and show your receipt to the guard, who would then check it against every single item in your bags.


                  There was a Best Buy in my area (now closed - I wonder why?) that did exactly that.

                  After my first experience unpacking my bags and having to pull the receipt back out from my wallet for a security guard to waste 10 minutes of my life right after he watched me pay the cashier not 10 feet from where he was standing I never went back to that location again.

                  There is another Best Buy less than 10 miles away who never did this sort of thing and they got my business from then on.

                   

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                    Anonymous Coward, Feb 11th, 2013 @ 10:59am

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    Suppose that your grocery store had a guard posted at every exit to the store. To leave, you had to unpack your grocery bags, and show your receipt to the guard, who would then check it against every single item in your bags.

                    Costco? Sam's Club?

                     

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                      Karl (profile), Feb 11th, 2013 @ 11:13am

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      Costco? Sam's Club?

                      Never been to either. Now, I never will...

                       

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                        Anonymous Coward, Feb 11th, 2013 @ 11:20am

                        Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                        Dude, you don't know what you're missing. You'd seriously rather spend hundreds of dollars more per year than hand security your receipt and have them look at your cart (no bags at Costco)?

                         

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                          Anonymous Coward, Feb 11th, 2013 @ 3:08pm

                          Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                          Dude, I pirate all my Costco groceries . . .

                           

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                          PaulT (profile), Feb 12th, 2013 @ 2:28am

                          Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                          I probably would. Saving a few dollars on a weekly shop isn't worth dignity nor being implicitly accused of being a shoplifter unless I prove I'm not. Save money by shopping smarter, not agreeing to be searched in case you did something.

                           

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                      Anonymous Coward, Feb 12th, 2013 @ 7:43am

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      What Sam's club does can hardly be considered a search. They glance at your cart at most (2s max). Can't speak to Costco though.

                       

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                      Anonymous Coward, Feb 12th, 2013 @ 1:37pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      Never had to show them my receipt, and never will. They can't keep you in the store.

                       

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                  Anonymous Coward, Feb 11th, 2013 @ 11:14am

                  Re: Re: Re: Re: Re: Re: Re:

                  Posted below, but I go to Costco all the time, they compare my receipt to my cart contents every time I leave. No problem for me compared to the value I receive. You should go sometime.

                   

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                    Chosen Reject (profile), Feb 11th, 2013 @ 11:48am

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    I've been to Costco. They glance at both my receipt and cart. If they're matching everything up, then those people have some super human abilities. We're talking John-Henry-man-versus-machine-xray-vision type abilities. Maybe they look more closely for expensive items, but if you walk out with a cart full of bread, milk and eggs, you'll get nothing but a glance.

                     

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                  Anonymous Coward, Feb 11th, 2013 @ 3:19pm

                  Re: Re: Re: Re: Re: Re: Re:

                  frye's anyone? I don't go there anymore

                   

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              JMT (profile), Feb 11th, 2013 @ 3:36pm

              Re: Re: Re: Re: Re:

              "But I'm a very good customer of my local grocer. Do you think that should mean anything if I occasionally shoplift there too?"

              If you can present multiple, reputable studies that show that grocery shoplifters are also above-average grocery purchasers then it might mean something. But you can't, so it doesn't.

               

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                Anonymous Coward, Feb 11th, 2013 @ 7:12pm

                Re: Re: Re: Re: Re: Re:

                Well, I can prove that I am. And since I'm talking about myself as the example, I ask again:

                "But I'm a very good customer of my local grocer. Do you think that should mean anything if I occasionally shoplift there too?"

                 

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                  JMT (profile), Feb 11th, 2013 @ 10:27pm

                  Re: Re: Re: Re: Re: Re: Re:

                  I did answer your question: it doesn't mean anything.

                  To be absolutely clear, quoting Karl, "every reputable study ever commissioned has found that those that pirate music, buy much more music, legally, than those that do not." Can you present similar studies that found that shoplifters buy much more groceries legally than those that do not? I highly doubt it, so the shoplifting comparison is simply wrong.

                   

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                    Anonymous Howard (profile), Feb 12th, 2013 @ 12:23am

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    the shoplifting comparison is simply wrong.

                    Beside what you said, it is also wrong in the sense that shoplifting cause the owner real damage, while piracy is not.

                    It's more like copying the recipe of a dish in a restaurant, and then making it at home. In a sense, you cause damage, because you're cooking at home instead of eating at a restaurant, but seriously, who the fuck in their right mind would make that illegal?

                     

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            Chosen Reject (profile), Feb 11th, 2013 @ 9:30am

            Re: Re: Re: Re:

            Anecdote time: I used to buy a lot more but stopped when I saw how ridiculous people were about the whole thing. I used to buy games a lot but stopped caring when Bioshock only allowed a limited number of installs. I used to buy movies the day of release but now rarely get around to even renting from Redbox. I used to buy songs, but haven't bought one in years now. I have not turned to piracy. I started off boycotting and now I just hardly care anymore. The efforts put in to stop piracy actually turned me off from buying.

            Eventually, those studies won't show that infringers spend more, not because infringers will get wise and stop buying, but because the infringers that also buy will get tired of being treated like scum when they do buy and just stop being interested at all. Sure infringement will drop when they quit, but so will spending, word of mouth, etc. And that's all because of the anti-piracy measures.

             

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            AndyD273 (profile), Feb 11th, 2013 @ 9:57am

            Re: Re: Re: Re:

            I think one reason that those that pirate music buy more music is because they actually care about music.

            I do not pirate music. I think the one time I downloaded a CD was when I loaned a CD to a friend in college before I had backed it up to the computer, and somewhere in the exchange it got cracked. I couldn't say it was my friends fault, so I couldn't make him buy me a new one, and I didn't have the money to buy it again, so I found a copy online and kept the cracked CD as proof that I owned it.

            I can't actually remember the last time I bought a CD either, but that's because I discovered audiobooks at the library and very very rarely listen to music any more. The rare occasions when I do listen to music either the radio or online streaming work great.

            That's probably what's happening in France. For most people the amount of music you can get either over the air or legally online is more than enough to satisfy.

             

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          Anonymous Coward, Feb 11th, 2013 @ 9:31am

          Re: Re: Re:

          The problem is that the message doesn't work that way on the net:

          If people get caught downloading illegal music on the web, they get ridiculed by net-society for not protecting their privacy and smacked down even harder by the content industry. The computer-culture recognize the existance of measures against all and every legal measure to curb their actions. Now you are frustrating a lot of recreational computerusers with HADOPI, but you are not changing the culture on the internet an inch in the right direction since you are just reinforcing the privacy opinions of people.

          If anything, you are forcing recreational computer-users to learn more of the privacy-hiding and thereby making anti-terrorist measures less effective!

           

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      CK20XX, Feb 11th, 2013 @ 8:30am

      Re:

      I'm not sure I agree, but instead I'd like to say:

      See this? This is how you begin a thoughtful discussion. There's no name calling, no personal attacks, no ignorant trolling; just a person with a different view of the world who doesn't agree with the article on the outset. This is how you disagree and look like a nice, respectful person instead of a crazy sociopath.

       

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      Anonymous Coward, Feb 11th, 2013 @ 8:35am

      Re:

      At least half the fight against piracy is a tactic to get the powers to shut down the competition that supports the self publishers. The labels market is shrinking as more and more musicians go the self publish root.

       

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      PaulT (profile), Feb 11th, 2013 @ 8:45am

      Re:

      "Anti-shoplifting measures probably don't increase sales either. But failing to take measures doubtlessly would make the problem worse."

      Two problems with this analogy. Firstly you have to make sure the measures you impose actually work. If you "just do something", it can make the problems worse that if you did nothing. That's why real evaluation of the situation is so important. If people are pirating because the product is too expensive, not available in their country, is blocked from their device by DRM, etc., then launching lawsuits and kicking peoples' internet connection down isn't going to increase sales. In fact, it might lose money (see: the many studies that show that the biggest pirates are also among the biggest consumers).

      The second is that the purpose of anti-shoplifting measures is not to increase sales, it's to stop tangible losses. Ever time something is shoplifted, merchandise has to be replaced, with all the associated overhead costs. They not only lose the potential profit from said item, but incur further costs before the product can be replaced and sold, possibly not for a high enough margin to recover said losses. So, the anti-shoplifting measures are there to stop that loss, not to try and convince a shoplifter to buy instead (whose motivation is usually money from reselling the item, not because they want the item).

      These tangible losses and motivations are not present with digital piracy - where only the *potential* of a sale is lost, and even that's debatable. No tangible losses are incurred, people may still go on to buy the product, and the motivation may just as easily be consumption of content not legally available as anything else - financial gain is far less likely motivation and thus further attempts to get between someone and the content they wish to access will not translate into a sale being made - and may in fact make it less likely.

       

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        Anonymous Coward, Feb 11th, 2013 @ 9:10am

        Re: Re:

        Two problems with this analogy. Firstly you have to make sure the measures you impose actually work. If you "just do something", it can make the problems worse that if you did nothing. That's why real evaluation of the situation is so important. If people are pirating because the product is too expensive, not available in their country, is blocked from their device by DRM, etc., then launching lawsuits and kicking peoples' internet connection down isn't going to increase sales. In fact, it might lose money (see: the many studies that show that the biggest pirates are also among the biggest consumers).

        I'd say that the measures do work. To what degree is debatable, But I don't think much of an argument can be made for the notion that less enforcement would not affect the current rate of infringement. And again, you ignore my fundamental premise that enforcement is there to maintain or slow the corrosive effect of piracy.

        The second is that the purpose of anti-shoplifting measures is not to increase sales, it's to stop tangible losses. Ever time something is shoplifted, merchandise has to be replaced, with all the associated overhead costs. They not only lose the potential profit from said item, but incur further costs before the product can be replaced and sold, possibly not for a high enough margin to recover said losses. So, the anti-shoplifting measures are there to stop that loss, not to try and convince a shoplifter to buy instead (whose motivation is usually money from reselling the item, not because they want the item).

        I disagree. You are trying to make the same stale argument as the AA's- that each stolen item represents a lost sale. Even the AA's don't believe that and don't claim it anymore. So granted the store is out the price it paid for the stolen merchandise, not any potential profit.

        These tangible losses and motivations are not present with digital piracy - where only the *potential* of a sale is lost, and even that's debatable. No tangible losses are incurred, people may still go on to buy the product, and the motivation may just as easily be consumption of content not legally available as anything else - financial gain is far less likely motivation and thus further attempts to get between someone and the content they wish to access will not translate into a sale being made - and may in fact make it less likely.

        I grant that much infringement is motivated by distribution issues. But I maintain that the proliferation of piracy undermines the expansion of legitimate distribution. How many people would subscribe to Netflix of $8/mo. if they could get the identical (or better) service for free? Netflix pays license fees, pirates do not. And yes, I have read the many articles and posts about competing with free. They've largely been centered on the premise of offering a better mousetrap. Well, absent meaningful enforcement- pirates will be able to duplicate your mousetrap and offer it cheaper because they can ignore license fees and customers can (even more) freely infringe without fear of liability.

         

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          Anonymous Coward, Feb 11th, 2013 @ 9:47am

          Re: Re: Re:

          You still haven't addressed whether tackling infringement is even the right problem to tackle.

          There are benefits from infringement (exposure, etc.) and some tiny percentage of infringements blocked = a sale.

          So, again, WHY? because it is morally or ethically right? That's just stupid especially since it not even close to universally clear that everyone agrees on those morals or ethics. The ethics of culture and public good very much disagree.

           

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          Karl (profile), Feb 11th, 2013 @ 9:51am

          Re: Re: Re:

          You are trying to make the same stale argument as the AA's- that each stolen item represents a lost sale.

          Except, in the very next paragraph, he makes exactly the opposite argument. But never mind.

          I maintain that the proliferation of piracy undermines the expansion of legitimate distribution.

          There's absolutely no evidence that this is true. For one thing, it goes against the entire theory of free market economics: that competition drives innovation.

          For another thing, it goes against the history of digital music distribution. There's no question that Napster was the impetus for creating digital services. (Those services were so awful, however, that nobody used them, and are now the subject of an anti-trust lawsuit.) If it weren't for file sharing, there's no way that the major labels would have even thought about doing deals with iTunes or Spotify.

          In fact, the biggest obstacle to digital music services is, without any doubt, the major labels themselves.

           

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            Anonymous Coward, Feb 11th, 2013 @ 9:59am

            Re: Re: Re: Re:

            "You are trying to make the same stale argument as the AA's- that each stolen item represents a lost sale."

            Except, in the very next paragraph, he makes exactly the opposite argument. But never mind.

            I meant his inclusion of their lost profit.

            "I maintain that the proliferation of piracy undermines the expansion of legitimate distribution."

            There's absolutely no evidence that this is true. For one thing, it goes against the entire theory of free market economics: that competition drives innovation.

            For another thing, it goes against the history of digital music distribution. There's no question that Napster was the impetus for creating digital services. (Those services were so awful, however, that nobody used them, and are now the subject of an anti-trust lawsuit.) If it weren't for file sharing, there's no way that the major labels would have even thought about doing deals with iTunes or Spotify.

            I agree that piracy was the impetus for change, but I believe that piracy slows the growth of more robust distribution. Legitimate services that pay license fees still have greater fixed costs than pirates.

            In fact, the biggest obstacle to digital music services is, without any doubt, the major labels themselves.

            I agree that they are less enlightened than others facing the same challenges.

             

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              silverscarcat (profile), Feb 11th, 2013 @ 11:15am

              Re: Re: Re: Re: Re:

              "I believe that piracy slows the growth of more robust distribution."

              I have to disagree, without piracy, some industries would never take off.

              For example, the anime industry would have NEVER become popular in the west had it not been for scanlations of manga in the early 90s (Ranma 1/2 benefited from this the most) (This infringed on IP a lot). The most popular anime in Japan today, One Piece, for example, would have been completely ignored in the West had it not been for people seeing scanned translations and then going to others "hey, this is pretty good", getting others to read and enjoy it.

              Crunchyroll is an anime website that, at one point, was nothing but a piracy haven. It's now a legitimate business that gets into deals with anime companies to distribute their stuff online.

              They started as IP infringers, but would eventually work with the people who own the IPs to become a real major force.

               

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              Josh in CharlotteNC (profile), Feb 11th, 2013 @ 12:52pm

              Re: Re: Re: Re: Re:

              I agree that piracy was the impetus for change, but I believe that piracy slows the growth of more robust distribution.

              Those are two contradictory thoughts. You've effectively said: "Piracy is the impetus for change, but piracy stops change."

              Piracy is the competition. Stop fighting against it existing and adapt to beat it.

               

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              Anonymous Coward, Feb 12th, 2013 @ 8:24am

              Re: Re: Re: Re: Re:

              I meant his inclusion of their lost profit.


              So you picked a nit instead of addressing the argument that shoplifting is different because replacing physical inventory costs money while nothing needs replacing when copyright is infringed? Copying is not theft.

               

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          Josef Anvil (profile), Feb 11th, 2013 @ 10:38am

          Re: Re: Re:

          On the surface your comparison of shoplifting to piracy does feel like it makes sense, but as pointed out to you, shoplifting does actually deprive the store owner of product which has to be paid for, so there is a definite loss incurred.

          As for combating piracy, it's more complex than just a gut reaction. If you look at it by industry, the music industry has dealt with piracy the longest and now its not really an issue any more. Now that music is readily available through many different channels for free, there isn't much need or desire to pirate it. The industry evolved and is still evolving.

          You posit that the proliferation of piracy undermines the expansion of legitimate distribution, but I counter it has the exact OPPOSITE effect. It would seem that the proliferation of piracy actually forces the expansion of legitimate distribution channels, as the legacy players are forced to actually compete.

          "How many people would subscribe to Netflix of $8/mo. if they could get the identical (or better) service for free?"

          Good question, but what if that free service was legal? If that free service is legal then the pirates will still be out there, but there will be less or no incentive to use their service, unless its just more convenient.

          3 strikes laws are just unreasonable. If you are using the shoplifting analogy, then that would mean that the punishment for shoplifting would be banning the offender from buying things at stores. How does that help?

           

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            Anonymous Coward, Feb 11th, 2013 @ 11:07am

            Re: Re: Re: Re:

            You posit that the proliferation of piracy undermines the expansion of legitimate distribution, but I counter it has the exact OPPOSITE effect. It would seem that the proliferation of piracy actually forces the expansion of legitimate distribution channels, as the legacy players are forced to actually compete.

            My observation is that the barriers to entry for legitimate companies due to the uncertainty of success in competing against pirate sites, the high fixed cost of licensing and scale. Piracy is essentially small business due to lack of a large initial investment in licensing. A legit entrepreneur would have enormous costs to compete, as he'd have to match the number of offerings of the pirates to succeed. Then, given that uncertainty- good luck getting a bank to loan you money. Thats a huge problem for indy films. Banks won't touch them because they think they'll be pirated which will erode their value in various markets.

             

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              Karl (profile), Feb 11th, 2013 @ 11:20am

              Re: Re: Re: Re: Re:

              Thats a huge problem for indy films. Banks won't touch them because they think they'll be pirated which will erode their value in various markets.

              I somehow doubt that piracy is the reason banks won't loan indie filmmakers money. In fact, it's far more likely that the reason is because they believe the indie films won't be picked up by a major distributor.

              Of course, by keeping those distributors in power through government-enforced monopoly rights, copyright worsens that problem. It's the same with indie musicians: copyright has resulted in the major label system, which is vastly more harmful than file sharing is. To the degree that copyright keeps the major labels in power, it harms indie artists.

               

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                Anonymous Coward, Feb 11th, 2013 @ 11:25am

                Re: Re: Re: Re: Re: Re:

                I somehow doubt that piracy is the reason banks won't loan indie filmmakers money. In fact, it's far more likely that the reason is because they believe the indie films won't be picked up by a major distributor.

                Go talk to a few indy filmmakers about financing. Few indy films have distribution deals before principle photography begins. That has been true for decades.

                 

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                  Karl (profile), Feb 11th, 2013 @ 11:56am

                  Re: Re: Re: Re: Re: Re: Re:

                  Few indy films have distribution deals before principle photography begins.

                  And unless you were one of those films, you likely wouldn't get a loan from a bank. It didn't necessarily have to be a full-fledged distribution deal, but it did have to be some sort of advance commitment, or at least some proof of pre-sales in the domestic market.

                   

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                    Anonymous Coward, Feb 11th, 2013 @ 1:32pm

                    Re: Re: Re: Re: Re: Re: Re: Re:

                    Pre-sale into foreign markets is at rock-bottom. As is pre-sale to tv and cable. DVD pre-sale is a joke. No one wants to get left holding the bag. Many film festivals won't accept your entry if there's been any sort of release. Syfy's old business model was to give producers $1.75 million and all rights other than Syfy's exhibition. The producer had to raise the remainder of the budget. Depending on the project, maybe another million. Guess what? It collapsed because they could no longer raise the money. The reason (justified or not) was piracy. They simply won't pay as much with such uncertainty.

                     

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                      Karl (profile), Feb 11th, 2013 @ 10:33pm

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      Pre-sale into foreign markets is at rock-bottom.

                      Yes, and those pre-sales have historically been tied to advance commitments from Hollywood studio distributors. The foreign market has always taken advantage of the promotion from the North American market. And with the death of those distributors in 2008, the foreign market collapsed. I'll have more to say about this in a minute...

                      Syfy's old business model was to give producers $1.75 million and all rights other than Syfy's exhibition. The producer had to raise the remainder of the budget. Depending on the project, maybe another million. Guess what? It collapsed because they could no longer raise the money. The reason (justified or not) was piracy.

                      And, if that reason was not at all justified?

                      I've actually found nobody at Syfy who has ever cited piracy as the reason for their decisions, but perhaps you can enlighten me.

                      Dollars to donuts says it's not piracy, but "shrinking DVD sales" or some such, which has nothing to do with piracy, and everything to do with consumers migrating to streaming content. (Even Netflix is getting rid of their DVD offerings, even as streaming is growing.)

                      But back to my original point:

                      Of course, by keeping those distributors in power through government-enforced monopoly rights, copyright worsens that problem.

                      This is the only problem that you've cited. Indie filmmakers were absolutely dependent upon the major studio distribution arms that made deals with them. This situation was created by, and is exacerbated by, the monopoly on distribution that is created by the government-granted monopoly called copyright.

                      Indie filmmakers, like indie musicians ten years ago, are relegated to feeding at the trough of multinational media conglomerates. And if they fail, through their obstinate refusal to cater to paying customers, everyone else suffers. Since their paying customers just are pirates, this seems apropos.

                      Thank goodness for platforms like Vodo or Kickstarter, which are able to fund projects without the horrible business model failings that characterize the current copyright industries. Admittedly, they're still in their infancy, and have a long way to go. But they're a step in the right direction.

                       

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                        Karl (profile), Feb 11th, 2013 @ 10:37pm

                        Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                        And if they fail

                        In case it wasn't clear, which it wasn't, "they" = "multinational media conglomerates." Not indie filmmakers.

                         

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                      Mike Masnick (profile), Feb 12th, 2013 @ 1:37am

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      Pre-sale into foreign markets is at rock-bottom.

                      Do you have data to support that? Not saying you don't. I'm just curious to see it. I've heard stories from quite a few indie film producers these days that they're able to score pretty good foreign market pre-sales, more or less allowing them to recoup the movie investment, and then focus on everything else (VOD, mainly) to make a profit. It's possible these are outliers, but since I've heard it multiple times in the past few months, I'm wondering what's going on.

                      Meanwhile, it seems that someone forgot to tell buyers at Sundance this year that the industry was dead. Crazy dealmaking this year...

                       

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                        Anonymous Coward, Feb 12th, 2013 @ 6:38am

                        Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                        I only have anecdotal information I'm afraid. But it comes from very experienced people fwiw. And honestly, one other factor I suspect may influence pre-sales is that the technology available has made the overall cost of motion pictures lower, thus opening access to the market to many, many more filmmakers. However, consumer access to the larger supply of motion pictures has also increased so its difficult to gauge the effect.

                        Sundance is like the Super Bowl of indy films. You generally see outstanding product there. No surprise that there's a lot of buyers.

                         

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                          Mike Masnick (profile), Feb 12th, 2013 @ 11:18am

                          Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                          Sundance is like the Super Bowl of indy films. You generally see outstanding product there. No surprise that there's a lot of buyers.

                          There haven't been that many buyers in years. This year was much more active than it's been in years. I wasn't comparing Sundance to everything else. I was comparing Sundance to previous Sundances.

                          At least that seemed to suggest that there's an awful lot of activity and money flowing for indie features.

                           

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                            Anonymous Coward, Feb 13th, 2013 @ 12:15pm

                            Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

                            Makes sense that the big showing of interest was there and thats a hopeful sign. Perhaps there will be a trickle-down to the second tier indies as well.

                            Any insight into a percentage increase or whether it was tire-kickers or actual deals?

                             

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                      PaulT (profile), Feb 12th, 2013 @ 2:09am

                      Re: Re: Re: Re: Re: Re: Re: Re: Re:

                      "Pre-sale into foreign markets is at rock-bottom. As is pre-sale to tv and cable. DVD pre-sale is a joke."

                      Yet, more movies were produced last year and shown in theatres than the previous year. I've attended many film festivals where the movies have not yet picked up a distributor. I even attend one film festival that's set up its own DVD label because none of the traditional players want to play ball. yet, they were financed - and usually not with a bank loan.

                      The problem is distribution, not piracy. Perhaps if they stopped trying to split the world into regions, make different distribution deals that were not format dependant, make arrangements with new types of distributors or even finance their distribution with Kickstarter, they wouldn't have such problems?

                      There's a lot of problems with the movie industry, but only a few of them involve piracy, and far fewer of those are down to piracy itself as opposed to dealing with squeamish people living in the 90s business models.

                       

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              Anonymous Coward, Feb 12th, 2013 @ 8:30am

              Re: Re: Re: Re: Re:

              Let me get this straight, the enormous upfront licensing costs are 'piracy's fault? Sounds like your beef is with media conglomerates asking for exorbitant sums which is fueled by the monopoly power granted to them by governments i.e. copyrights. Furthermore there's no licensing costs at all when you distribute your own content so that barrier simply doesn't exist for the media conglomerates themselves, the ones that own the rights. What excuses do you have for them I wonder? Further still, there are legit offerings with massive libraries that are still 'competing with free' even while paying the licensing costs. Offerings like iTunes and Spotify.

               

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          Not an Electronic Rodent (profile), Feb 11th, 2013 @ 10:40am

          Re: Re: Re:

          There are still some huge holes in your argument... here's a few of them:
          But I don't think much of an argument can be made for the notion that less enforcement would not affect the current rate of infringement
          Only if you look in isolation. The whole point is that you shouldn't. Take exactly the same money currently spent on "the war in copyright theft" (including all the billions of tax dollars they con the goverments into stumping over if you want to go to town) and spend that same amount on providing a real alternative service and normalising the prices of legitimate services to what the public would reasonably pay. Then it's highly likely that not only would infringement go down, but profits would also go up. This is the point after all.

          So granted the store is out the price it paid for the stolen merchandise, not any potential profit.
          True enough, but you're being pedantic. The point is that the shoplifting argument still doesn't fit - a shop is out real money and time and effort from shop lifting, a copied file means the "shop" is out nothing real.

          How many people would subscribe to Netflix of $8/mo. if they could get the identical (or better) service for free?
          People can get better service for free - depending what your criteria is for "better". Netflix is convenient, and is safe to use (ie virus free), which makes many people pay for it. Piracy already offers better quality than Netflix and more choice than Netflix is more flexible than Netflix and is already free.
          Note I haven't mentioned legitimacy once. You're looking at the argument the wrong way round: How many people would use an unknown, fractured, potentially virused service for free if they could get a full-HD, anything you want available on any device any time service from Netflix for even £10 a month?
          Stopping the rabid and pointless quest to "stop piracy" by being more and more draconian in the oooo generously 0.001% of infringement you actually catch doesn't have to mean making it legal. All else being equal the legitimacy of the service will have an effect, but I would contend that it has an effect little different without enforcement as with because no matter how draconian the enforcement it's still falls in the "it happens to other people like hurricanes" category in most people's consideration. Either way the quality of the service will have more effect than the legitimacy.
          As far as it goes, Netflix is an OK service though personally the enforced low quality and limited new stuff of such services annoys me, and I am sure that at least as many people subscribe to it and still pirate the stuff it doesn't have available that they want as those users who only use legitimate sources.
          Netflix's problem as far as I can see, and the reason they don't make a bigger dent in "piracy", is not their own service but the limitations and vastly overinflated fees demanded by the content providers. Enforcement has nothing to do with it otherwise the people paying for Netflix and other legitimate services like it while still "pirating" are clearly not choosing free over paid.

           

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          Anonymous Coward, Feb 11th, 2013 @ 11:13am

          Re: Re: Re:

          quite franquly i remember an example of some problem, the example is as follow; you have a bussines and your workers start arraiving at a late hour, what will be your course of action, if you give them a bonus to incentive the arrive early or if you punish them for arraiving late, then you are not doing a go job, because maybe the issue isnt the worker but the bus that take them, if you give them an easy way to reach your place you will be improving your bussiness

           

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          PaulT (profile), Feb 12th, 2013 @ 1:54am

          Re: Re: Re:

          "I disagree. You are trying to make the same stale argument as the AA's- that each stolen item represents a lost sale"

          No, you've completely misunderstood me there I'm afraid. I was addressing your shoplifting analogy, which is where such assertions are correct. When you're dealing with physical goods, there ARE tangible losses. This is not questionable, because it's true - an item stolen physically must be replaced at cost and the original can no longer be used by its owner.

          The **AAs and their sycophants come into problems where they try to apply this logic to digital media. There, a copy doesn't cost anything to replaced, leaves the original in the hands of its original owner and can be sold without the copy making any difference at all except in some circumstances that are impossible to quantify.

          I think we agree generally, although you misunderstood completely what I was saying.

          "But I maintain that the proliferation of piracy undermines the expansion of legitimate distribution"

          I disagree. Most people I know where I live either pirate or subscribed to VPN and various other services to be able to access things like iPlayer, Hulu and Netflix that aren't legally available here - and yes that means that many people are paying more for their Netflix subscriptions than people in the US pay for the same service. You know what would cut down that remaining piracy? Licencing Netflix to serve this and other countries that they're not currently allowed to service. Similarly, when people pirate in addition to having Netflix, it's to get the stuff that they've not been allowed to licence - they don't like having to pay multiple subscriptions, especially when you're talking about things like HBO that try to enforce more restrictions and costs.

          "Well, absent meaningful enforcement- pirates will be able to duplicate your mousetrap and offer it cheaper because they can ignore license fees and customers can (even more) freely infringe without fear of liability."

          So, again, your answer seems to be to do nothing. Netflix, Spotify, etc., not to mention iTunes, wouldn't exist with your attitude, and you only have to look at those companies to see that competing with free is possible. Yes, they could do with some improvement in some areas, but unless a better streaming technology comes along to allow this, I'm sceptical of its real workability.

          Then there's the issue of diminishing returns. The investment required to set up a Netflix streaming clone of the same quality would be substantial, for example. The only major benefit it might offer would be a wider catalogue. Yes, pirates might come up with better solutions, but the stakes for what the end users might save ($8 monthly netflix subscription) compared to previous eras ($4-5 per rental, $20+ for each purchase, $80+ for a family trip to the cinema) is less of a driver toward piracy. Unless a new technology comes along that makes Netflix's type of infrastructure unnecessary comes along, that model is far safer than the traditional purchase model, and even then Netflix could stay on top if they adapted and passed savings on to consumers.

          I could be wrong, but again "do nothing" is not an answer and "sue people/three strikes/whatever" may actually make things worse. Address the reasons why people pirate to begin with, and the motivation starts to go away. Get rid of the motivation, and people stop pirating. Try to attack the source but ignore the motivation, and nothing improves.

           

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      Anonymous Coward, Feb 11th, 2013 @ 9:43am

      Re:

      Many business and industries spend millions on advertisements to improve their reputations and create a positive public image of their companies. The RIAA companies have spent millions making people hate them and ruining their public image. That is one of several reasons their sales are declining.

       

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      Josh in CharlotteNC (profile), Feb 11th, 2013 @ 12:41pm

      Re:

      I think the fight against piracy is largely to hang on to what you've got.

      I agree with that statement.

      Here's the problem: In this case, trying to hang out to what you've got is both preventing you from embracing new oppurtunities AND not actually helping you to retain what you already have.

      I agree that there are ways to increase revenue- largely via more robust, user-friendly distribution. But the viability of that will be undermined by the proliferation of piracy.

      When attacking piracy prevents the user-friendly distribution, and is not effective in stopping piracy, you are loosing on both fronts at once.

       

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      Anonymous Coward, Feb 12th, 2013 @ 8:20am

      Re:

      Anti-shoplifting measures probably don't increase sales either.


      The purpose of anti-shoplifting is so you don't keep loosing expensive inventory. That's why it's called 'loss prevention.' The difference being that when a copy of your product is made you're not out inventory the world just has one more of that thing.

      I don't think there's much of an argument that if all content was easily available for free with no legal or financial consequences, many of the people who currently pay will start feeling like chumps and start freeloading.


      Where have you been? All content is easily available for free with an exceedingly low risk of legal and financial consequences (you've got a better shot getting hit by lightning than caught downloading). People still pay for things they think are worth money. Sometimes that means selling something other than the content. Sometimes people will pay for the content even when they can get it for free.

      I agree that there are ways to increase revenue- largely via more robust, user-friendly distribution. But the viability of that will be undermined by the proliferation of piracy.


      The mountains of studies that show so-called 'pirates' are the most prolific buyers suggests otherwise.

       

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      Milton Freewater, Feb 19th, 2013 @ 5:16pm

      Re:

      "You may not make more money, but we have seen how piracy has proliferated as it became easy and risk free."

      Communicating with other people one-on-one, using your own words or someone elses', has historically been very easy and risk-free. The goal of anti-piracy efforts is literally to introduce risk into (and commodify) peer-to-peer communication. Old copyright laws are the means, not the end.

      But let's pretend that piracy concerns are about lost sales, not feudalism, for the sake of argument ...

      "Anti-shoplifting measures probably don't increase sales either. But failing to take measures doubtlessly would make the problem worse."

      MINOR anti-shoplifting measures DO increase sales, I'd argue, because they scare casual thieves straight. But if your anti-shoplifting measures are too harsh, they cost your store money overall - they beg lawsuits, they put lifetime bans on people who would otherwise spend thousands of dollars a year with you, and they encourage serious thieves to insure they won't get caught.

      "I don't think there's much of an argument that if all content was easily available for free with no legal or financial consequences, many of the people who currently pay will start feeling like chumps and start freeloading."

      I could not disagree more. People pay for what they can have for free all the time - in fact, from restaurants to maid service, our economy depends on it.

      The difference is in doing it yourself vs. paying an expert. That difference is very applicable to content access as well. Downloading a Louis CK concert from his site is easier and safer than torrenting it. Finding new music on iTunes is easier and safer than guessing what's new on a torrent site.

       

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    Donglebert the Needlessly Obtuse, Feb 11th, 2013 @ 8:18am

    They seem to be ignoring that the figures are terrible

    The report seems to be making the argument that sales haven't dropped as dramatically as would have been the case without HADOPI. Even if you can prove that their figures and assumptions are accurate, that's like having a slightly fatal injury.

    What the figures really show is that they've spent a lot implementing something that demonstrates that there's little correlation between file sharing and sales.

     

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      Anonymous Coward, Feb 11th, 2013 @ 8:51am

      Re: They seem to be ignoring that the figures are terrible

      While the graph shows sales of music from the labels dropping, it probaly ignores self published and other outlet sales.

       

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        Anonymous Coward, Feb 11th, 2013 @ 9:43am

        Re: Re: They seem to be ignoring that the figures are terrible

        Which would have increased explosively when it became the norm for publishing, say 5 years ago.

        I still do not think that the file sharing and sales can be correlated in any way. The knowledge of the existance of these "shadow numbers" only makes the graph unlikely to show the true development in the industry.

         

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        Anonymous Coward, Feb 12th, 2013 @ 8:32am

        Re: Re: They seem to be ignoring that the figures are terrible

        And is HADOPI covering anything not produced by the labels?

         

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    Jay (profile), Feb 11th, 2013 @ 8:18am

    Incentive

    I'm probably like a broken record but it bears repeating:

    Incentive is the most powerful word in the English language. The entire battle with copyright, the need to control information, the reduction of the public sphere, the need to clam up information is all about the same root cause.

    To control where you make money in a stable fashion and devour the competition whether it's a teacher or another business. The winner gets the spoils and the glory to control works. The loser gets to pay the cost. And we can see the results of this game in regards to the public. YouTube and Google believe corporate lies over what the public can judge for themselves. Our libraries get little funding for textbooks and pay too much for sharing knowledge. We have a record industry that looks to make money in perpetuity without regards to what the public wants. And the public is weakened considerably by laws that don't represent them or their interests.

    I can go on, but the incentives are quote clearly aligned to site that copyright is nothing more than a tool for oppression and censorship, ignoring the public, and rewarding the private sphere for nothing more than claiming ownership ofideas over benefiting the public and enriching our share of knowledge in all sorts of industries.

     

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    Pixelation, Feb 11th, 2013 @ 8:20am

    "...if efforts to stop it are both expensive and ineffective, why continue?"

    The lawyers need to make money too.

     

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    PaulT (profile), Feb 11th, 2013 @ 8:23am

    I'd personally like to see more figures, correlated with both the number of sales and when legal services were opened in France.

    Purely looking at the amount of Euros being generated doesn't tell you much other than the money coming in. If people are switching from full album CD purchases to single track downloads, then it doesn't matter how many P2P downloads are stopped - that metric will go down, even if the number of purchases increase exponentially. If people are switching from music to other media as their primary entertainment medium, it also won't make a lot of difference. In addition, how many new services have been made available to French users during this time? It can't be coincidental that digital services have increased in usage over the time period being discussed - many of which were unavailable in Europe before HAADOPI started getting implemented.

    So, we're down to the same conversation, unfortunately. Too many people will see the dropping revenue as evidence that more enforcement - not more choice, better products, etc. - are needed. The fact that the very nature of the market is changing beyond recognition is ignored until it's too late.

     

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      Anonymous Anonymous Coward, Feb 11th, 2013 @ 9:37am

      Re:

      Agreed. There is a big difference in analysis when you are talking about units sold vs total sales. And mixing products (album vs song) without distinction, distorts any analysis due to the large change in average gross margin, while unit sales may remain static.

      We also need to see how the independents did during the same time frame. These appear to be big label numbers only. Doing an analysis of part of the market without at least quantifying the whole market is practically useless. And when you are talking about trends, leaving out parts (for every action there is an opposite re-action) does not show how when one goes down the other goes up.

       

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    anonymouse, Feb 11th, 2013 @ 8:30am

    WOW

    Not surprising really the industry has known this for a long time, as i have said before it is not about the money, it is about the power and the monopoly to do as they want, to create a star from someone who can barely sing. They have total monopoly of the airwaves from tv to radio and they do not want to give that power up as they will then not be able to control who makes money and who does not.

    Power of the monopoly can makes stars or break them as the few people that have that power can prevent anyone from being heard on the radio or being in the charts.

    As online sharing increases and music sites start popping up all over the place more and more artists are making real money, more and more artists will eventually get the chance to be in the charts, not the radio charts, but internet charts that are not controlled by the monopoly.

     

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    avideogameplayer, Feb 11th, 2013 @ 8:31am

    It's the Euporean economy, stupid...

    I'd like to think that these lost sales are people who are choosing necessities over something frivolous...

    Last time I checked the EU was still in some financial straits...

    I could be wrong...

     

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      PaulT (profile), Feb 11th, 2013 @ 8:51am

      Re: It's the Euporean economy, stupid...

      That's one of many factors, of course, which is why it's a shame that these discussions are so often derailed by only concentrating on "piracy".

      There's a hundred factors that might affect dropping sales, ranging from people buying cheaper products (€1 single track downloads rather than €15 CDs), to preferring other media, to merely having pay the rent rather than buy the new album from whatever the flavour of the moment is in France. To pretend that only one of these is relevant - especially in an industry as essentially frivolous as the recorded music industry - is disingenuous at best, outright delusional at worst.

       

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    Lord Binky, Feb 11th, 2013 @ 8:34am

    One example: they have done an excellent job of keeping me from immersing myself in the musical entertainment they peddle. Of course they aren’t going to regain lost sales when they are removing means to acquire music without providing functionally equivalent alternatives. They diligently work to take down lyrics and tabs or any other fan created works that are essentially celebrating the wares they sell, further removing themselves from people’s minds.

    I don’t understand their goal, people as a whole are not interested in ‘going back’ while technology and the arts move forward. Striving to control how people use your product such that it ultimately makes it where people spend less time even thinking about your product is driving yourself out of business. At the same time, there are PLENTY of other businesses willing to offer similar or different wares to take up the recreational time that was opened up.

    It appears that the leaders of this industry were placed into a mature industry and are totally lacking in the skills needed to grow a thriving business.

     

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      Ed C., Feb 11th, 2013 @ 9:41am

      Re:

      That is an excellent point. Music used to be an immersive culture. Fans would sing or practice playing popular songs all the time. But ever since the public started doing those things online, the music publishers have continually tried to stifle them. This continual pressure to change music from an immersive to a passive medium will have huge ramifications for them in the long run.

       

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    Kurata, Feb 11th, 2013 @ 8:45am

    I would like to take this occasion to do a very light talk about Virgin megastore, a store which mainly sold movies, cds, dvds, and such.

    They recently filed for bankruptcy if I'm not wrong, and I had heard some of the people protesting against the closing.
    One of their argument was that you couldn't have culture without having human contacts as it was against the very nature of culturem and thus did not bet on the digital era, and blamed partly the closure on rampant piracy and digital competition.

    I think this closure is indeed the fault partly of the digital era, because said shop had no mean whatsoever to adapt to the new changes, such as trying to sell music online, or use web interactivity in the shops.
    It is well known the internet is a destroyer of jobs, and of brick and mortar shops, which is unrelated to having opened a shop in the most expensive street of Paris instead of relocating somewhere way way cheaper in the same vicinity.

     

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      JEDIDIAH, Feb 11th, 2013 @ 9:20am

      Awash in a sea of media...

      What killed my $100 or $200 a visit music buying habit at Vigin Megastore wasn't the Internet. It was the RIAA lawsuits and Metallica's Napster shenanigans. The industry presented itself as something I no longer wanted to support.

      Music has to compete with video that's cheap and plentiful as well as very well developed video gaming technology. They have to compete with rivals that know their place and are willing to pander to the customer.

      Media consolidation also didn't help the effectiveness of terrestrial radio as a means to promote the product. Meanwhile, the industry did everything it could to interfere with effective replacements.

      The music industry wants to try and ignore the fact that the entire world changed around them.

       

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    drewdad (profile), Feb 11th, 2013 @ 8:50am

    What it's really about

    What it's really about is not increasing sales OR reducing piracy.

    It's about people in the music industry keeping their jobs.

    If they were hired to fight piracy... then they'll find piracy to fight, by god.

     

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    Anonymous Coward, Feb 11th, 2013 @ 9:10am

    Actually it looks to me that the decline leveled off considerably once Hadopi began, compared to the rate of the fall prior to Hadopi.

    And whatever decline that remains could also be from France and the Euro falling into major economic crisis since 2008. How much were other retail sales in France down?

    With a recession I would have expected the sales decline to be steep; at the very least as steep as before.

    An argument can be made that Hadopi did indeed curb the rate of piracy.

     

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      Anonymous Coward, Feb 11th, 2013 @ 9:32am

      Re:

      While I don't have a ready citation, I believe that entertainment historically is much less affected in economic downturns as people tend to forgo big expenses like cars, vacations, dining out, home repair, etc. yet will still indulge in entertaining themselves.

       

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        PaulT (profile), Feb 12th, 2013 @ 2:23am

        Re: Re:

        Yes, but do they pay money for that entertainment in the same way? For example, do they continue to buy music at the same rate, a lower rate, or just stick to radio, TV and podcasts instead, if not simply the music and other content they already own or can borrow from friends? Do they just decide that they can't purchase their usual level of music but keep their Netflix subscription or borrow a few more books from the library instead? Most of those options would still represent a drop in the purchased music represented by the figures in the graph.

         

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          Anonymous Coward, Feb 12th, 2013 @ 8:17am

          Re: Re: Re:

          As the previous poster mentioned, the industry is typically less affected. People do continue to pay at more or less the same rates.

           

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      PaulT (profile), Feb 12th, 2013 @ 2:16am

      Re:

      "An argument can be made that Hadopi did indeed curb the rate of piracy."

      A flawed and inconclusive one that doesn't convince anyone not already predisposed to thinking that way. At the very least, more data is needed. However, we can certainly draw the conclusion that piracy is not the only factor involved here - which further raises the question of why it's the only factor that the industry is rushing to address.

       

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    Ed C., Feb 11th, 2013 @ 9:15am

    It does not appear to have educated them to go back to buying at the same levels as the artificially inflated rates in the past.

    The inflated rates definitely are a contributing factor to the decline of studio profits, but that is only part of the larger problem. Their own monopolistic practices is what's really killing them. Monopolies not only lead to higher prices, but higher inefficiencies and apathy towards consumers. The big studio's don't care much about inefficiencies, it just gives them bigger expenses to charge against artist royalties. They don't care much about what consumers want either, they dictate which artist get the golden ticket for active publicity and which toil way in obscurity.

    The current situation is similar to Edison's cartel back in the early days of cinema. He'd used patents to literally strongarm both productions and movie houses into using his film stock and equipment, thus giving him leverage over both production and exhibition. He pushed for cheap productions and short runs in theaters. As long as people kept paying for tickets, he didn't care about the quality of the films or what audiences wanted to see. It wasn't as if they had a choice anyway. Once the novelty of "moving pictures" started to wane, audiences wanted better films, but Edison's strongmen would ruff up any production or cinema that didn't play ball his way. The pent up pressure from both producers and audiences led to black market smuggling of filmstock and movies. With lower cost and greater freedom, production cost fell and cinema revenues went up. And of course, Edison's venture in the movie business became a footnote in history.

    Today's labels use copyright licensing schemes and lawyers in a fairly similar fashion to Edison's patents and strongmen. A crucial difference, however, is that he would push and pull films from theaters on a regular schedule, completely indifferent to the films' popularity. The big labels instead will try to keep songs with any popularity on the market as long as possible, sometimes to the point of ramrodding them though audience's earholes. This may have given them a longer run, but their monopoly tactics and lack of quality talent will leverage innovators and independent creators to chip away at their profits.

     

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      Anonymous Coward, Feb 11th, 2013 @ 9:28am

      Re:

      Ed, I think you characterization of the industry as a monopoly is inaccurate at best. Movies compete with other movies every week. Taking a larger view, movies compete for your entertainment dollar against video games, tv, the theater, reading, music, etc. That's like complaining that Exxon has a monopoly on Exxon branded gasoline. It differs somewhat in composition from what BP offers, but they both do the same thing.

       

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        Ed C., Feb 11th, 2013 @ 9:56am

        Re: Re:

        Reading comprehension fail... I was clearly talking about the movie industry of the EARLY 20th century and comparing its tactics to those of the modern music labels. Maybe you don't know who Thomas Edison was, but back in his day video games and TV didn't even exists, and the music publishing industry was also in its infancy. [Actually, there were mechanical televisions back then, but no one would reasonably compare them to the later tube-based sets.]

         

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        Ed C., Feb 11th, 2013 @ 10:12am

        Re: Re:

        And to not call the modern movie industry a monopoly, oligopoly actually, is anything but laughable. Seriously, try getting a national theater distribution contract without a studio.

        That will be a moot point in the long run of course. With 4K video equipment slowly creeping down into the consumer sphere, the ability to create the "big screen" experience will eventually be available to everyone.

         

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          Anonymous Coward, Feb 11th, 2013 @ 11:12am

          Re: Re: Re:

          That will be a moot point in the long run of course. With 4K video equipment slowly creeping down into the consumer sphere, the ability to create the "big screen" experience will eventually be available to everyone.

          I heard the same thing with the Red camera. I doubt you've ever spent a day on a film set, otherwise you'd realize how foolish a statement like that sounds.

           

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        Anonymous Coward, Feb 12th, 2013 @ 8:38am

        Re: Re:

        No, it's really nothing like complaining that Exxon has a monopoly on Exxon branded gasoline. For most consumers two different brands of gas are perfect substitutes (although even then there are exceptions). For most consumers there is not perfect substitute for the specific movie they want to watch or song they want to hear. There are imperfect substitutes, sure, but that's a different ball-game entirely from the one you've suggested exists.

         

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    ECA (profile), Feb 11th, 2013 @ 9:41am

    NOW a chart

    LOVE to see a chart on the amounts paid out for legal services, and DRM, and stuff they have TRIED to stop pirating..

     

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    Anonymous Coward, Feb 11th, 2013 @ 11:35am

    how many times has it been said? it isn't, never has been and never will be about anything other than screwing the ordinary people and getting/keeping control!!

     

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    charliebrown (profile), Feb 11th, 2013 @ 12:17pm

    DUH

    I mean, if iTunes is THE biggest music store and you get cut off the internet, how the fuck are you supposed to legally buy music?

     

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    Katherine, Feb 11th, 2013 @ 12:53pm

    To: RIAA MPAA

    The RIAA and MPAA need to look at the Youtube Model and use it as a way for consumers to watch their movies.

    The client which is the people who want to watch movies watch the movies for free. The people who make movies or Content providers AKA the movie companies pay the MPAA for advertising their movie. (They could of course have separate advisement as well on their site from other company's as well.) The MPAA plays those advertisements before a movie like they already do in Theaters and will pay the Movie company based on how many views the movie got just like how youtube does.

    I know its unlikely that they will just let viewers watch for free and would likely have a sub fee plus advertisements.

    With a model like this the MPAA could put every single pirate out of business in a single night.

     

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    Anonymous Coward, Feb 11th, 2013 @ 5:22pm

    I think what they're forgetting is the sheer publicity bomb they'll take now that everyone knows that they took two years and millions of taxpayer dollars to catch one person who wasn't even the man they were after.

     

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    Glenn, Feb 11th, 2013 @ 6:24pm

    What a surprise...

    What the dickheads at the labels don't get is that so-called "piracy" is just this era's version of "word of mouth". Killing piracy kills the word of mouth--don't hear it, don't buy it. Everyone else who isn't buying their crap is simply doing so either in protest over the labels being the dickheads they are and/or because most of the stuff being released nowadays is really just crap that only morons would spend money on. The labels and their artists can all just fade away... good riddance.

     

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    Anonymous Coward, Feb 12th, 2013 @ 4:26am

    The music sucks compared to the 70s and 80s

     

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