Aussie Study: Infringers Spend More On Content Than Non-Infringers

from the try-and-buy dept

We’ve argued for quite a long time that treating “pirates” like criminals instead of potential customers is a massive mistake for a whole host of reasons. There’s the futility of the legal game, for instance, as well as the possible public relations nightmare that going after the public, even the infringing public, can create. But the best reason to not treat infringers like criminals is because they’re often the best actual customers of content out there as well. In study after study, it’s shown that a person who engages in some infringement spends more total money on movies, music, and video games than someone who gets everything legit. Pirates, scurvy-laden bastards as they may be, happen to be the creative industries’ best customers.

And it turns out it’s no different in Australia, where a recent government study bore out the same conclusion: infringers spend more money on content than content-saints.

Consumers who flirt with the morally ambiguous line of content consumption spend more money, according to a survey released by the Australian Department of Communications. Over a three-month period among respondents aged 12 and over, the survey found that those who consumed a mixture of copyright-infringing and non-infringing content spent on average AU$200 on music, AU$118 on video games, AU$92 on movies, and AU$33 on TV content. Consumers who only consumed non-infringing content spent only AU$126 on music, AU$110 on video games, AU$67 on movies, and AU$22 on TV; whereas pure copyright-infringing content consumers spent a mere AU$88 on music, AU$24 on video games, AU$53 on movies, and AU$8 on TV content.

In every market, the sometimes-infringer spends more. In the case of music and movies, the delta between the occasional infringer and the all-legal consumer is huge, much larger than the delta between the all-legal and all-infringement consumers. Video games and television don’t show the same delta, but even in those arenas the occasional infringers spent more than the saint. Why? How?

Well, because the occasional infringer infringes because they’re a fan, a fan perfectly happy to spend money on scarce goods where spending that money makes complete sense.

However, the survey also found that the majority of spending on music and movies was not on the content items themselves.

“For both music and movies, the majority of the average spend was not from purchases of either digital or physical copies. In the case of music, this primarily consisted of concerts and gigs, and in the case of movies, this primarily consisted of going to the cinema,” it said.

And since the advents of the VHS and cassette tapes, that’s always been the case. Theaters are about experience and live music for great acts will always be in demand, even if bootleg tapes and pirated DVDs are in hefty supply, which they are. For the content itself, the survey respondents essentially indicated that the juice wasn’t worth the squeeze.

A majority of survey respondents said that they would pay for a music subscription service that charged AU$5 per month, and AU$10 per month for a movie subscription service. Only 5 percent of respondents said that nothing would make them stop consuming copyright-infringing content.

In other words, the “everyone just wants everything for free” line the entertainment industries have been pimping for decades is bunk. Instead, the overwhelming majority of customers and potential customers want content on-demand at prices that make sense, in which case they’re perfectly willing to fork over the money. And even when they feel the price doesn’t make sense, they’re still willing to fork over money for things they do value as fans — even though they may have become fans through pirated content. Either way, the industries win. It’s just a matter of how much they want to win. Hint: crying over infringers who spend the most money isn’t the optimal response.

Frustratingly, this government study was released roughly a month after Australia passed its version of SOPA, largely at the behest of industry lobbyists armed to the teeth with industry numbers showing industry losses at the hands of these same dastardly pirates who are spending so much money on their products. It sure would have been nice if the government had managed to have access to their own data before passing such draconian legislation, rather than relying on the historically unreliable data from the entertainment industry.

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Comments on “Aussie Study: Infringers Spend More On Content Than Non-Infringers”

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37 Comments
That One Guy (profile) says:

Yes and no

Frustratingly, this government study was released roughly a month after Australia passed its version of SOPA, largely at the behest of industry lobbyists armed to the teeth with industry numbers showing industry losses at the hands of these same dastardly pirates who are spending so much money on their products. It sure would have been nice if the government had managed to have access to their own data before passing such draconian legislation, rather than relying on the historically unreliable data from the entertainment industry.

While it would have been nice if they’d had some actual data to base their decision on, odds are good that even with this data they still would have passed the law regardless, because the absurd numbers the ‘entertainment’ industry likes to throw out make for much better sound-bites than the real numbers from studies like this.

Much better PR from being able to trumpet how ‘Piracy is costing creators billions every day, but I, and others passed a bill to stop piracy for good!’, than to admit that pirates actually tend to be hefty spenders, at which point those pushing the *AA numbers will immediately jump on you for ‘defending piracy’.

Anonymous Coward says:

“For both music and movies, the majority of the average spend was not from purchases of either digital or physical copies. In the case of music, this primarily consisted of concerts and gigs, and in the case of movies, this primarily consisted of going to the cinema,” it said.

That is somewhat mixed news, as the studios get money from cinema performances, but the labels do not get much money from concerts and gigs, just their cut of any public performance licenses.

tqk (profile) says:

Re: Re:

… but the labels do not get much money from concerts and gigs …

No, but they do get money from resulting sales from the gigs advertising the works. If you go to a concert and enjoy what you get, you’re going to want to support their efforts to encourage them to do more, by buying the labels’ stuff. Yes, many will just torrent free copies, but real fans don’t want to screw their favourite artists. That doesn’t encourage them to produce more.

Carrot or stick? I think that stick is the way more expensive way for them to go, and it works abysmally for everybody except for the Righthaven and Prenda leech industry types.

Ninja (profile) says:

Well, I was in that legal+infringing part for a good while till the MAFIAA pissed me off enough so I’d simply go without. Netflix sort of brought me back in the middle and I occasionally spend money on games (specially when Humble Bundle lets me buy games I want but I despise the company, such as Warner or EA, and lets me give all money to charity or to the HB team). Many of the people I know are in that middle class too.

One particularly nice thing is that the older people (ie: my parents) usually buy into the arguments of the MAFIAA. But once I started showing them this middle field they became more ‘piratey’ and were able to see that the MAFIAA isn’t the saint they thought they were. You know, preaching with facts. I’ve proudly converted quite a few people 😉

David says:

Correlation and causation

In study after study, it’s shown that a person who engages in some infringement spends more total money on movies, music, and video games than someone who gets everything legit. Pirates, scurvy-laden bastards as they may be, happen to be the creative industries’ best customers.

Maybe that’s just because people engaging in copyright infringement are bothered less by getting treated like criminals by default. In addition, they might be more certain when buying media that they’ll manage to get actual use out of them.

I’m neither interested in becoming a target of criminal investigations, nor in wasting money on media I might not be able to use for legitimate purposes because of legal or technical restraints.

So I’m neither a customer of the recording industry, nor a bootlegger.

Mike Masnick (profile) says:

Re: Re:

Curious why it never seems to be mentioned that rights holders focus enforcement on persons who distribute works to others.

Because it’s not true. We’ve covered many stories of rightsholders going after individual downloaders.

Also, this is unrelated to the topic at hand. I wonder why you feel the need to try to change the subject…

Anonymous Coward says:

Re: Re: Re:

Cites, please, since the only major cases I recall where persons were actually sued were also engaged in distribution. There are a few outliers, of course, like those associated with The Hurt Locker, but they are nowhere near the size you try and make them out to be.

As for being charged with changing subject, seems to me quite fair to note that the takeaway of articles such as this consistently fail to mention that the major rights holders are not targeting “fans” indiscriminately, but rather place their emphasis on persons who are doing more than consumption…they are concurrently also associated with distribution.

Anonymous Coward says:

Re: Re: Re: Re:

“There are a few outliers, of course, like those associated with The Hurt Locker, but they are nowhere near the size you try and make them out to be.”

“…The major rights holders are not targeting fans indiscriminately, but rather place their emphasis on persons who are doing more than consumption…they are concurrently also associated with distribution.”

Cites, please!

PrivateFrazer says:

Not in the linked article

except that the CNET story does not mention anywhere that the report says (as Techdirt notes)’For each content type, those who consumed a mix of legal and illegal content
spent more money over a 3 month period than those who consumed 100% of their content legally, but those who consumed 100% of their content illegally
spent the least money.’

Anonymous Coward says:

there have been a lot of ‘Independent Studies’ that have arrived at the same conclusions over the last few years, so why do the entertainment industries still insist that they are becoming destitute because of the number of non-paid downloads? we all know it’s complete bullshit put out by the industries as a valid excuse to be used by governments to bring in more restrictive and invasive surveillance laws on the people! there hasn’t been a single study, apart from their own industry paid-for ones that have drawn different conclusions which obviously then means the whole object is not what the industries say concerning a massive loss of revenue but more of an excuse and reason to be able to spy on ordinary, innocent of ‘most wrong-doings’ people!!

JBDragon says:

I believe this study 100%. I won’t mention Illegal, but I PAY for Games I play!!! You should see my DVD, HD DVD, and Blue Ray collection, close to 1000 discs, start doing the math on that!!! I even go out to the movies around 8 times a month. Well I pay $35 a month for a MoviePass subscription. I was paying for SiriusXM radio, but i also pay for Amazon Prime which includes Music.

You can only squeeze so much from a person. If I have to pay here, I’ll cut there.

JMT says:

Abuse of the word illegal

Interesting read about this report:

http://www.gizmodo.com.au/2015/07/the-governments-copyright-infringement-report-has-some-problems-with-the-word-illegal/

As that article points out, a lot of activities are described in the report as “illegal” or implied to be illegal, when they’re simply not. Things like using VPN’s to access US Netflix from other countries (terms of dervice breach), downloading infringing content (a civil matter, not criminal), or simply using uTorrent and Bit-Torrent for anything (perfectly legal). It’s another case of repeating an incorrect or inaccurate claim often enough to trick the simple-minded policy makers into over-reacting.

Anonymous Coward says:

We Communicate newsletter from Communications Alliance - Issue No 22: 27 July 2015

From the latest Communications Alliance newsletter:

Improvements in the affordability and ready availability of online content in Australia are crucial ingredients to reduce online copyright infringement, Communications Alliance said in response to new research released by the Minister for Communications, Malcolm Turnbull.

Welcoming the research initiative, Communications Alliance CEO, John Stanton, said it pointed to the need for heightened efforts by rights holders to make legal online content available to Australian internet users in a timely and affordable way, as part of an integrated strategy to minimise online infringement.

Infringers said that the top three factors that would encourage them to stop infringing were:

A reduction in the cost of legal content (39%)
Legal content being more available (38%); and
Legal content being available as soon as it is released elsewhere (36%)

Only 21% of infringers said they would be encouraged to stop infringing if they received a letter from their ISP saying their account would be suspended.

“These results suggest that while there is a role for a copyright notice scheme Code in Australia to assist in fighting infringement, more work needs to be done to make legal content more affordable and more available, to combat the root causes of infringing activity.” Mr Stanton said.

“It is interesting that almost three quarters of those internet users who consumed content illegally were also accessing content legally – they were apparently not just looking exclusively for a ‘free ride’, but also were chasing the convenience that comes with ready availability of content.”

Communications Alliance, internet service providers (ISPs) and rights holders have cooperatively written a copyright notice scheme code (which does not includes sanctions such as suspension of consumers’ accounts) and have submitted it to the industry regulator, the ACMA. Negotiations are ongoing between the parties to finalise a commercial agreement, including cost-sharing, that will allow the Code and scheme to begin operating.

Extensive negotiations over cost-sharing have not yet resulted in an agreement, so ISPs and rights holders have jointly commissioned work by an independent expert to look at the costs that ISPs will incur to process Infringement Notices.

“The widespread pattern of online infringement in Australia, indicated by the research, underlines the fact that rights holders – as indicated by the Government – should be ready to pay the majority of the costs of operating a copyright notice scheme, given the enormous financial upside that will flow to rights holders from changing the behaviour of online infringers,” Mr Stanton said.

“Significantly, only 5% of infringers said that nothing would make them stop their activity – so the right combination of initiatives can certainly make an impact on what ISPs agree is a serious problem.”

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