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
    HothMonster, 16 Mar 2011 @ 3:43pm

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

    The buggy whip and switchboard and the monks vs printing press and other other like refernces do aply and the do like so:
    They are examples of people makeing stuff that consumers don't want anymore. Yes people want the content, which the record industry doenst create they liscence it for as little as possible with a contract and then try to make absurd profits on it. There are new means of getting music that consumers want and plenty of people are happy to pay for it. As someone pointed out elsewhere in here people are lazy by nature and most of us are happy to pay a reasonable fee to not have to pirate things, because pirating takes work and time and your not guarenteed to get what you want. So if the music and film industies offered their work at reasonable prices and in a form people want they will buy. Look at hulu and netflix and pandora and spotify ect ect.

    Like you say people still wanted transportation just not the whips people still want the music just without the disc and liscence. Plenty of money can be made giving the people what they want. These legacy businsses just don't want to adapt and they don't want to give up the power they had by being the only game in town.

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