by Mike Masnick

Filed Under:
assumptions, australia, impact, studies

Questionable 'Piracy' Study Found; Details Show It's Even More Ridiculous Than Expected

from the that's-not-research dept

Thanks to G Thompson for pointing us to where the BSA has stashed a copy of that mysterious "piracy" research report we were just talking about, which was apparently written by someone named Emilio Ferrer. It's embedded below, and it's even more ridiculous than we had initially expected. First, the entire thing is based on the massively and completely debunked TERA report from last year, that used such outrageous assumptions as to not even pass the most basic sniff test. The researchers here appear to have made no attempt to determine the accuracy of the TERA report, nor to respond to any of the debunked points.

Digging into what little details there are suggests that this study just gets worse and worse and worse. It takes bad assumptions, then piles on more bad assumptions and then extrapolates out to get totally unsubstantiated conclusions. For example, it assumes that the volume of online infringement grows at the same rate as IP traffic and assumes the rate at which the industry will grow. That last one is particularly silly. Since it's making up a number for what the total jobs "should" be, it can just create whatever justification that it wants.. and can claim any job loss number it wants to name. The whole thing is a house of cards built on nothing.

Of course, it's worth pointing out that there was another report, this time from AFACT (the Australian anti-piracy group) just a few weeks before that some have confused this report with. The AFACT report can be seen here (pdf). It's even worse than the other study in some cases. Check out some of the assumptions in that report: including the laughable claim that "just under half of all pirate consumers would have paid." There have been various attempts to quantify that number, and I've never seen any unbiased source come anywhere close to 50%. At best, I've seen 10% claims. The only concession the report makes is that maybe some people use unauthorized copies to "sample," and make a legit purchase later. But they only count this if the person says they would pay for that legit product, not if it resulted in them buying other authorized products or services.

It also does a laughable job with "ripple effects." It's pretty sad. We've debunked "ripple effects" reports over and over and over again. They all seem to make the same mistakes. First, it ignores that ripple effects are really ways to count the same dollar over and over and over again. Second, they only count the ripple effects in one direction. So, for example, they say movie industry people lose their jobs, and that means less taxes. But what they don't say is that any money not being spent on the movies doesn't disappear from the economy, but is spent on something else -- and that something else might actually be even more productive or value generating. In fact, looking at this report, it appears they don't even consider this point, and assume that all the money "not" spent on movies disappears from the economy.

So there you have it. Two separate reports released within weeks of each other in Australia by the entertainment industry. Each one seems to be trying to outdo the other one in questionable assumptions and extrapolations.

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  1. identicon
    JMT, 17 Mar 2011 @ 5:36pm

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

    And the first comment on that post completely debunks the "debunking":

    "I think you are conflating the content with the container, and so your attempt to extend the analogy in this way is itself inaccurate. To speak through the analogy: People are not pirating buggy-whips, they’re pirating transportation, which the buggy-whip makers dominated until the automobile introduced a new and better means of transportation. This seems the more correct analogy: the buggy-whip makers are trying to make people buy buggy-whips to start up their new automobiles, instead of changing their business into making automobiles or automobile components.

    In other words, the “buggy-whip” is the excludability that is inherent to the physical versions of content in film, discs, and paper. The content industries are trying to maintain or artificially create excludability via DRM, DVD release windows, and other means. That seems more like efforts at protection rather than innovation.

    People aren’t demanding new forms of content; as you say, they are chomping at the bit for the content that artists are producing. But they are certainly demanding that the means of buying and accessing that content evolve with the times. Consumers are not in arms against content creators; they are in arms against the content packagers and content peddlers.

    I agree that many new distribution and monetization models are unproven, and it would indeed be foolish for the content industry to throw all their eggs in any single new basket. But the trend seems pretty clear that monetizing excludability won’t last in the digital age, and so filing suits against those who are moving ahead in that trend will result only in pyrrhic victories at best.

    I agree that piracy is not innovation. But neither is trying to futilely import physical excludability into the digital landscape while suing your customers along the way. No, piracy is not innovation; piracy is a signal that content industries are not meeting the needs of their consumers. It seems to me entirely acceptable for the content industries to be cautious in transitioning to this new and developing new business environment, but it seems to me entirely unacceptable for them to try to cling to and artificially sustain an environment that is quickly fading into history."

    So that old chestnut holds up just fine if you actually understand the analogy.

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