How Reliable Are Industry Announced Piracy Statistics?

from the depends-on-your-definition-of-reliable dept

Eric Goldman sent in a link to a recent research paper that aimed to look at the reliability of industry-released reports on piracy. That sounded interesting, as we’ve spent plenty of posts picking apart why almost all of their released numbers are bogus. In particular, we’ve pointed out how incredibly bogus the BSA’s statistics are. So, it was somewhat surprising to have the study say that the BSA’s were the most reliable, when compared to other groups like the RIAA and MPAA. If anything, though, that really just suggested that the RIAA’s and MPAA’s stats were even more bogus (remember, things actually got so bad for the MPAA that it had to admit how bogus its own stats were). That actually seems likely, as the BSA is the most upfront about the methodology used.

However, reading through the actual report, it does little to vindicate the piracy numbers that the industry reports always trumpet. That’s because the report actually focuses on the rate of unauthorized use, rather than the cost or impact of that unauthorized use — which is the key point to come out of these reports. The rate of unauthorized use is fairly meaningless, so it doesn’t matter that much who is the most accurate. It’s the impact that matters. While reports used to do silly things like count every unauthorized copy as a lost sale, most have stopped that, and now use a multiplier. Some have started using a questionable ripple effect that counts the same loss multiple times and ignores the “ripple effects” in the other direction that benefit the industry. So, yes, perhaps the BSA is the best of a bad bunch, but even if the rate of unauthorized use is somewhat accurate, that has little bearing on the actual impact of those unauthorized copies.

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Companies: bsa, mpaa, riaa

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Comments on “How Reliable Are Industry Announced Piracy Statistics?”

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19 Comments
Shaun says:

Re: Re:

I’d have to agree on that one, as per the Bible:
“Truly I say to you, this generation will not pass away until all things take place”(NAS, Luke 21:32-33)
So it’s been about 2000 years since it was supposed to happen and still going strong…

Sort of reminds me of the accuracy of the argument for DRM: if we don’t use it the music will be freely spread on the internet – while everyone else says duh it still is and always has been.

Don’t know if I linked these very well – not that the link is relevant to the original post anyway. Basically waiting for something that was supposed to happen ages ago compared to saying something will happen if you change things when it already happened ages ago.

JS Beckerist (profile) says:

Re: it's called piracy math

Well let’s be serious about this! Granted I’m using massive hyperbole and insane “guestimates” but…here we go:

71% of the current US population uses the internet. 71% of 3×10^8 = 213,000,000 US internet users. (A)
44% of all internet connections are broadband. I think it’s safe to say there isn’t much piracy over dialup (at least enough to ignore for the purpose of this demonstration.) That leaves 94 million broadband users in the US. (B)
Of that 94,000,000 people, it’s said that 65% use it from home as opposed to work (C). I would assume most piracy is from home too, and not in the workplace. Even allowing tolerances of 10%, that means that of the 94,000,000 people, 70,000,000 people:
Are using the internet over broadband from home.
Of that 70,000,000 people, only 57% download music (D) leaving only 40,000,000 people to download music.
According to Wired, 200,000,000 people use iTunes (E). According to MacObserver, 100,000,000 people use iTunes (F). So let’s say that only 20% of the worlds iTunes users are from the US. Of the 200,000,000 world users, only 40,000,000 are from the US.

Therefore, since there are 40,000,000 iTunes users in the US, and there are 40,000,000 individuals that download music in the US, all music downloaded MUST be legal…

…at least using piracy math!

Sources:
(A) http://www.internetworldstats.com/am/us.htm
(B) http://www.census.gov/compendia/statab/tables/08s1128.pdf
(C) http://www.census.gov/compendia/statab/tables/08s1127.pdf
(D) http://www.census.gov/compendia/statab/tables/08s1129.pdf
(E) http://www.wired.com/gadgets/mac/commentary/cultofmac/2005/10/69193
(F) http://www.macobserver.com/stockwatch/2005/10/17.1.shtml

Peet McKimmie (profile) says:

Just out of idle curiosity...

…given that neither side of the argument is likely to under-report the figures, whether the RIAA trying to scare the industry, or the WareZ groups showing off, is there anyone still surprised that this is being over-reported? Can anyone think of a single group who would benefit from under-reporting. or even accurately reporting the figures?

Anonymous Coward says:

Re: Just out of idle curiosity...

Actually, I think everyone would stand to benefit from accurate numbers. High piracy rates make everyone look bad; it makes the content ‘owners’ look bad because they’re ‘losing’ money and can’t do anything about it, it makes the WareZ groups look bad because they’re ‘stealing,’ and it makes the general public look bad because we’re all crminals. If the numbers were accurate, it wouldn’t look like such a big problem — for the content providers or for society — and we could all move on to more important pursuits.

But maybe I’m naive…

Chronno S. trigger says:

Re: Re: Just out of idle curiosity...

Nope, that’s exactly right. Except the content owners, MPAA/RIAA, don’t care about looking good as long as they get their money. If they blow everything out of proportion they can pretend it’s a much bigger problem and look like the innocent victim.

Accurate numbers would show that we are correct in saying it’s not as bad as they make it out to be but, it would also show they are as bad as we make them out to be.

UnrealEd Monkey says:

Poking fun at BSA and such is easy. But then I start looking around and it gets sad.

I work for a GameDev company, doing level design. This means I should play a lot of computer games. Hell, everybody in the company should — being in the know is their job. You know what their favourite store is, 95% market share?

The Net. And I don’t mean Steam.

They develop games for a living, and they don’t even have enough decency to buy a single copy and pass it around. I used to bring my private copies to work for them to borrow, but they would just use them to make copies of their own.

Just a few days ago one of designers was asked to play Call of Duty 4 specifically, because the game we’re working on is supposed to maintain similar tone. He’s been essentially asked to spend thirty bucks on self-improvement. I know he can afford it because I can and he makes more than I do.
“Nah, waste of money”, is what he said.

It’s the third company I work for and it has always been like this. Buy a game? What for?

Resolving Digital Piracy (user link) says:

The Free Market Answer to Digital Piracy

There’s now a ransom-model market solution called Propagate Ltd. A copyright owner can name a price to release replication rights to the public domain, and if the public collectively puts up that price through Propagate’s auction mechanism, then the copyright owner is paid off before even one CD or DVD gets out… assuming they can maintain at least physical control pre-release.

If it works, then all this bellyaching over piracy, DRM, region encoding, file-sharing etc can all be swept into the past. What’s now digital piracy will become royalty-free fair use, bought and paid for in a free market.

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