Researchers: movie studios sold more after Megaupload was shut down

Study examines sales in 12 countries from two studios before and after closure.

Read the whole story

 

[Titanium Dragon]

Pirates are their enemy. You aren't a consumer; you're a thief if you pirate. You're a leech.

That's the truth. You have to understand that before you can get anywhere.

Last week I saw video games being sold for the equivalent of 100 USD in Brazil, more expensive than in my own country, where I find them already overpriced (that's why I always buy used, after the games have been long been first released).

I thought they totally deserve to be pirated.

Why?

What right have you to the work of others?

What is "good" for the movie industry is to purposefully create rarity for their products, this allows for price gouging.

Not really, no. Because (again), you do not need movies to survive. If they charged $100 for movies, the correct thing to do is just not to consume them at all. That's the moral and ethical thing to do.

They don't charge that much for them though.

also. having a society that even acknowledges "creative rights" is a privilege based on laws that are don't have to exist for a society to be successful. Creative types would be wise to nail down some reasonable rules so they don't lose everything.

By that same logic, having a society that acknowledges your right not to have your brains spattered out on the wall is a priviledge based on laws that don't have to exist for a society to be successful.

Though really, let's face it - all successful societies have both IP law and laws against murder.

 

[Titanium Dragon]

To address like 90% of the stupid in this thread:

1) The companies anonymize the data in order to prevent their competitors from taking advantage of it. This is extremely common in the world of research. In fact, some companies won't even allow publication of even anonymized data taken from them for fear of it giving something away. This is not nefarious; it is reality. Does it suck? Yes. But its not a sign of malfeasance in any way.

2) Four months before and after is not an unreasonable time span, given that it helps to narrow down various effects. If the market was matured, then year on year would be nice as well, but unfortunately as we all know the digital distribution market is far from mature - data from years past is probably useless because it won't be measuring the same thing. The shorter the time span the less long-term trends impact your data. Thus this is about the best data you can realistically get.

3) People need to get a grip on reality. Did you know that companies often let people do research like this - indeed, pay for research like this - because they want to know the answer? Did it even OCCUR to you - any of you who bitch about how moustache-twirling they might be - that the companies are actually legitimately interested in the answer?

In truth, the companies WANT to know if killing MU actually helped them. If killing MU is helpful, then it tells them that they should encourage the government to crack down on other sites, and they themselves should go after other sites. If it doesn't help them, then they need to determine what is best in terms of ROI for increasing sales. Indeed, knowing how helpful killing MU was is very helpful in terms of ROI as well.

These companies don't go after pirates for shits and giggles. They do it because they believe it makes them money.

4) Yes, it would be nice to repeat this results. Clearly, the next step should be to kill The Pirate Bay. Just utterly annihilate it and its supporters. See how big of an impact THAT has. Keep going after major piracy sites and see how the impact is each time. Science is awesome, right? And repeatability is important.

5) Most of you complaining about this clearly have no idea about science, and are acting from a deeply biased viewpoint. The fact that many people are outright LYING about what a study which is free to read and readily accessible says shows the utter lack of integrity of many people complaining.

Moreover, regarding "blah blah blah whine whine wine I am entitled blah blah blah": No, you're not. You are absolutely not entitled to anything. If you don't like what they're offering, you do not have the right to steal it. Period. Just because you don't like them doesn't mean you can steal from them. This is rationalization.

You don't have the right to choose how they sell it, or at what price. You DO have the right NOT to buy it. But you don't have the right to steal it because they aren't serving you exactly the way that you want.

Likewise, the whole refund business is not only a non-starter, but nonsense. Unless a product is defective, companies -don't- have to give you a refund, and very often will not give you a refund (they tend more towards exchanges and similar deals). If you eat at Taco Bell and the food is just meh, that doesn't mean you have the right to a refund. If on the other hand you get sick, that's different.

Games are not "defective" merely because they are not perfect. Games are defective if they, say, mess up your computer, or don't run at all. Same goes for DVDs and similar things.

It is NOT their responsibility to deliver stuff to you in the exact format YOU desire. If you don't like it, don't buy it, but you certainly shouldn't steal it.

And just because something isn't as good as you hoped doesn't mean you can steal it either. Dollar store toothpaste isn't the best, but you don't have the right to steal from the dollar store any more than you have the right to steal from anyone else. You don't have the right to steal a beater either.

Advertisements exist to entice you to purchase products, but they do not force you to do so; that is your own choice.

Sure it is. It is an implicit assumption that we are all thieves. Otherwise, what would the point be?

No. The purpose is similar to locks. It is to keep "honest people honest".

DRM exists to make piracy more difficult. Just as it is possible to break into a house with locked doors, it is possible to pirate things with DRM. But it is more difficult to do so.

DRM isn't treating you like a thief any more than having a lock on your front door is treating you like one.

That's really the best you can do? Conflate file sharing with commercial piracy?

There's no difference.

Megaupload made millions of dollars via piracy.

The Pirate Bay makes money from file sharing as well.

Maybe these numbers can help put some bounds on the damages awarded to the movie/music companies when they bring cases against individuals, instead of the often 1000s of dollars per infringement that one sees nowadays.

If a movie like The Dark Knight makes a BILLION DOLLARS, then 3% of a BILLION DOLLARS is 30 million dollars.

So uh, if anything, it would suggest the penalties are a bit low, eh?

However, piracy is non-uniform.

Anything less would interfere with my liberty and everyone else's. That's what this ultimately runs into. In order to enforce some artificial non-natural statutory right, you have to interfere with everyone else's personal freedoms. These include basic property rights that should be a sacred cow in any capitalist country.

You don't have the right to what other people produce.

Its pretty clear that you don't care about liberty at all. You care about what YOU can take. Liberty is just a lie you tell yourself and others to make yourself look better.

What right have you to their work?

None.

Yeah, I'm actually surprised it took this long for someone to bring up the correlation vs. causation important bit. But then, Titanium Dragon seems to have posted early on (people, please block him. I did long ago and now I only have to read his tripe when you guys respond to it through quote) and that seems to have hijacked the conversation here.

If you had actually read the paper (which clearly you didn't) they even ADDRESS the correlation vs causation issue, and present evidence as to why they feel this is causation.

Correlation vs causation is always an issue, but its not really hard to see why this would be causative in this case.

The murder comment was just stupid in it's comparison to piracy. I really don't care whose side you are on, making a dumb comment like that just throws your whole intelligence level to the bottom. Do you even think that these things are remotely alike? Get real.

If you "pick sides" you tend to limit your ability to look at reality objectively.

And no, it isn't really. You can't make the argument "Well society can be successful without laws against X!" without having someone bring up the most extreme cases (murder, rape, theft) and use them for comparison. Its perfectly legitimate.

His argument was obviously fallacious and I was using reductio ad absurdum on it.

And guess what? The music, movie, or entertainment businesses are just as much criminals in their dealings with the creators as Megaupload, or maybe even more. Have you never heard of the "casting couch" or of music payola and of use bribery? The shady dealings of the RIAA and MPAA are more criminal then anything the pirates can do. I'm not trying to paint a picture of pirates being good but I do know that so called representatives of content creators are not any better. Stop trying to paint a false picture.

Are you kidding?

Firstly, the RIAA and the MPAA are ASSOCIATIONS. They are not, in and of themselves, record labels or movie producers, but rather assocations thereof. Individual labels and distributors are represented by said organizations, so it is inaccurate to say things like this as if they were some sort of monolithic entity - it isn't how the world actually works.

Secondly, payola IS illegal not because of the money changing hands but because of false presentation. But payola, while illegal, is NOT a hugely severe offense. It is a lousy thing to do, but by comparison to, say, what Kim Dotcom did, its pretty small peanuts.

More severe are accusations of bribing managers in order to accept worse contracts for the people working for them, which is quite evil. But "the RIAA" doesn't do it, because the RIAA doesn't really sign people; its an association, again, not a label.

But a lot of these practices are heavily associated with the music industry rather than the movie industry, and conflating the two is wrong. The music industry is notoriously shady, which is why any good musician needs to be extremely careful when dealing with them.

The movie industry is less slimy, though of course, they still do do some slimy things - net vs gross is a good example. Though that is not illegal, merely unethical, and a lot of it is thanks to the way that the US government has set up shell corporations.

Both researchers have a fascination with using the word 'cannibalization' in the titles of their research reports. I wonder if that's how they met.

I don't hear them referring to long pig.

I laughed so hard because watching such a shit movie could hardly be called "privilege". Sounds more like a "torture" to me.

And yet the year it came out, it was the #1 most pirated movie. Clearly, SOME people wanted to watch it. Personally I didn't think much of it when a friend showed it to me when it came out on DVD.

1. If you are not a consumer you are worthless to society

You have it backwards actually. It is being a producer that makes you valuable to society; it is the fact that people consume and feel entitled to consume without producing which is the big problem.

2. If game costs $100 and you can't afford it, the only moral thing to do is not to buy. Also, don't forget that only you should be moral, not those greedy corporate types who put ripoff prices on remakes of remakes of watered down console ports and who recycle same game engines and digital assets for like last 10 years or so.

Yes, actually, that IS the moral thing to do. Video games are a priviledge, not a right. You pay for the priviledge of playing video games.

If a video game is terrible, then don't play it. You can't argue that they are not worth buying, but play them.

This is obvious rationalization for bad behavior. If the games were really trash, then they wouldn't be worth downloading, let alone buying. But the fact that you do download them puts the lie to your behavior.

Pirating video games is wrong. Claiming that none are worth buying, but pirating them anyway, proves that you're a bad person, because not only are you doing evil acts, but you are convincing yourself that they are not and trying to convince others of the same.

 

[Titanium Dragon]

I just want to point out that these companies don't actually want to "know" facts or reason - they simply want to do what they have always been doing. With no change. If they could get govt to make digital media sales illegal and stick with discs, they would do it in a heartbeat.

Most people resist change. Even most people who claim to be for change are against change. Its just the way that a lot of humans work.

Look at the various people who advocate no DRM ever. 90% of them are pirates, if not 99% of them. Its sad but true. They oppose DRM and effective attacks on pirates because they are effective attacks on them. They oppose data which suggests that what they do harms other people because they don't want to have to change their ways - they don't want to admit that they're wrong, that what they're doing does cause harm. Its the same as the tobacco industry opposing the idea that smoking causes cancer.

Its just reality.

Unfortunately, however, what you've done here is said 1 + 1 = goldfish. You see, you think you made a very clever point.

But you didn't at all, because it is wrong.

Of course the companies don't want to have to do any extra work. But companies end up having to do extra work constantly to stay ahead of the game. Companies do research on new business models, new technology, new ideas all the time not because a lot of them WANT to change, but because they HAVE to change and because they WANT to maximize profits.

They want to know how much piracy hurts them, and how much killing websites like Megaupload can help them. They want to know if the law brings down the hammer what their ROI is, because they themselves sue people and can force the shutdown of sites with injunctions and similar, as well as urge those who are in charge of enforcing the law to enforce the laws more actively - proof of harm means that they are much more likely to get help.

Which is why they continue to refuse to do what the customer wants: sell to me online, simple, no ripoff, no hassle. Everyone on the planet knows this is what the customers want and are willing to pay for.

Yes, everyone wants everything instantly, whenever they want it, wherever they want it, for free. That is the nature of customers. Do I want a free giant pile of money, and everything I could ever want instantly on demand? That would be pretty nice, wouldn't it?

This doesn't mean that customers get it. Distribution across platforms costs money. They have to protect their IP from casual piracy. Bandwidth costs money. They also want to advertise to you, to make you want to purchase more stuff; look at Steam for a great example of this.

Its not in their best interests to give customers exactly what customers want, so why on earth would you be so stupid as to believe that they would do it? Because you want it to be true. You want it so bad.

The truth is that free is not the optimal price. Instant is not the perfect speed. Absolute freedom of sharing is not the optimal system. Because ultimately it is the producer who must produce; you merely consume. "The customer is always right" is a simple lie; they aren't, and anyone who knows anything about business knows it.

Also your point about industry associations being not monolithic is not true. The entire foundation of industry associations is per definition, the interests and issues they have in common. Otherwise they are competitors. So industry associations go hard on the issues the industry has in common and believes in. In this case, furthering their common belief that customer wishes are to be ignored and the law used as a cudgel.

You clearly have absolutely no knowledge of industry associations whatsoever. You are incompetent, but your incompetence prevents you from realizing it.

Industry associations exist to forward the common interests of the industry. Apple, Microsoft, and Google belong to MANY organizations together, but you would have to be high to believe that they are not competitors with one another. Do you think Disney is not competing with Viacom? Do you think that News Corporation and Time Warner don't compete with each other? And yet, they are in the MPAA together.

No, you have no undestanding of industry assocations whatsoever. The MPAA is, in essence, a common lobbying group for the industry, because there are a lot of common interests between them, even though they are competitors - it makes sense for them to band together to form the MPAA even though they are constantly fighting each other for dominance.

You must understand that this issue isn't even new. I was part of a strategy consulting team that did a study for one of the majors in this industry many years ago, very early on in the game. We did the research on how technology and communications platforms would likely evolve, looked at the rise of social communities and told them exactly how this was going to play out technologically, socially and in terms of business - and laid out what was a fairly sensible path for adapting and thriving in this new era ahead. They looked at it, told us we were wrong, did not hire us again - and went on doing exactly what they were doing. That sir, what happens when you give corporate executives an answer that they don't like and falls outside the beliefs in their little bubble. "The customer is going to be have a lot more power, and you need to change" - hell no. That's heresy. Response: "Jane, get my congressman on the line. We need to fix this".

And yet, here you are telling me that they are not competitors with each other, when they clearly are.

Obviously you weren't very good at your job.

Its very easy to claim you had prescience after the fact.

So tell me, how many billions of dollars do you have in your pocket?

The fact that you're here arguing with me on Ars under a pseudonym - one using the word "Zion" in its name no less - spouting utter nonsense really tells me all that I need to know about your reliability.

Yes, they BELIEVE it makes them money. That's the key point there. And to reinforce that belief, they also have to BELIEVE that shutting down megaupload helped, and pay for any studies that will reinforce that belief.

If they paid for a study and it didn't show any change, or showed a decrease in sales, their entire case before the US government would be completely undermined.

Maybe if there was absolutely no one on staff who was any more intelligent than you are.

But I can tell you that there are people who work for those organizations who are smarter than you are.

If there had been no effect, then they would have said that it proves that piracy is so rampant that cutting off one head is useless; you need to cut off all the heads at once. You need to be very draconian.

That's very, very, very easy to see. And its a perfectly valid argument. Indeed, it is the argument that people here made - it won't make any difference because there are too many other heads.

If they had decreased, then they would have looked into how to recapture that effect themselves and make money from it themselves.

Really the fact that it decreased is good news, because it suggests that killing sites like MU actually can have a positive effect, and that significantly more draconian enforcement is not necessary. Destroying the Kim Dotcoms of the world doesn't just help make the world more just, but it also helps their bottom line. And that my friends, is always good news - when public good and private good align.

Things are a lot uglier when they don't.

 

[Titanium Dragon]

Yet if I download a file it causes no harm or cost to the copyright owner. No property is lost and no money is taken away. The result is the same for the content owner if I download it or I simply don't buy it.

This is the big lie. The harm is that you are taking their work without compensating them for it, the same as if you refused to pay a plumber for fixing your sink. You are forcing everyone else to pay more for it, or depriving them of just reward for the work they did for you.

The result is not the same because you benefited from their work without compensating them for it. The lack of compensation is harm.

If I steal your stuff, you can always work extra hours to buy more stuff to replace it.

What's the difference?

The answer is rationalization. They're outside your monkeysphere, but you aren't.

 

[Titanium Dragon]

So using the library, buying used etc. is immoral then??? What is immoral about receiving a benefit? If my neighbour improves his house and the value of my house goes up as a result is that immoral?

Its not a question of immorality, but illegality.

In the case of the library or used goods, you are taking a discrete physical object and using it, or using a licensed system. Its not the same thing at all as stealing a copy of something. Used goods and libraries DO hurt publishers, but they are not illegal.

The house example is not comparable because they are improving their own property, which has the peripheral effect of your property being percieved as more valuable; they did not, however, alter your property in any way, and you did not take any part of their property.

In the case of making a copy, you are denying them any compensation for the work that they did for you in producing the program for YOUR use.

Refusing to pay someone who expended a scarce resource (time) and not compensating them it is obviously harming them as your benefit came at the expense of someone else but downloading a file doesn't do that. Downloading doesn't use any of the copyright owners scare resources (no electricity, storage, bandwidth, or money, etc).

Of course it does. THey expended a scarce resource (time) in making the program in the first place.

 

[Titanium Dragon]

But should they be illegal then???

No.

Why should we outlaw the benefits of digital abundance?

For the same reason that slavery is illegal - people deserve the ability to earn money from their work.

Digital abundance is a false kind of abundance because the actual resource - creator time - is finite, and failing to justly compensate creators results in systemic inefficiency, with fewer resources being applied to said work relative to their true value.

Copying 1 book for a short time and deleting it seems to have the same effect as buying a used copy or borrowing it.

Wrong.

Let's say I am a public library. If I have one copy of a book, and 100 people want to read it, and each person checks it out for a week, then it will take 200 weeks for everyone to have access to a copy of the book. Many people will be impatient and want to read it -now-, meaning that they will purchase the book, or if I want to increase availability, I could instead have 10 copies of the book, so it would take only 10 weeks for everyone to read a copy. In both cases, the total purchases of the book increase.

If you make a copy of the book, the total purchases of the book do not.

Ergo, the limited availability of actual physical copies drives sales, so while the library may have a negative impact on book sales, you still get some sales (as opposed to zero).

Yes but you were trying to make the point that getting a benefit without compensating someone for it is wrong (whether perception or not, the benefit is real if you can sell your house for more as a result) . This example clearly shows that receiving an uncompensated benefit is not immoral. What is immoral is causing harm which is why stealing is considered wrong - you are depriving someone of their property which makes it just as wrong to destroy it as to steal it.

Your problem is that you are not understanding a fundamental dichotomy.

If I improve my property, your property value may increase. This is basically the opposite of an externalized cost - rather than other people bearing the costs of my acitons, other people gain benefits from my actions. This is not a bad thing.

However, it is worth noting that this sort of action can (and does!) lead to massive inefficiency if the actual activity itself is not sufficiently profitable - for instance, say everyone spending $1,000 improving their house's appearance would increase the property value of everyone's house on the street by $10k. If, however, that $1,000 would only improve your own house's personal value by $500 unless all your neighbors do it too, then even though everyone would rationally benefit from everyone improving their house, no one would logically want to be the first to do so because you actually lose $500 unless everyone else does it.

This is actually a real world problem - beekeepers, for instance, grant huge benefits to farmers, and yet recieve quite modest compensation. The net result is that there is actually something of a shortage of beekeepers relative to the demand for them.

BS! They produced the work and whether I even know it exists or not, let alone if I copy it, borrow it or buy it, it exists and the effort is the same regardless of if it will sell millions or not at all. I deny them compensation if I decide I don't want anything to do with their work which is the same effect as making a copy.

And what if everyone pirates it instead of purchasing it? Then they would go out of business and cease to produce the product in question, thus denying everyone the benefit of their work.

This is closely related to the tragedy of the commons, where a common resource becomes overused because it is free, and therefore everyone has incentive to cheat, but the net result is the destruction of said resource.

You are a parasite if you do not pay for it. You are denying them just compensation for the work you gained from them. They did work to produce the good, and then you stole it without paying for it. It is the same as if you stole a TV - the loss to them is not a TV, but the resources that went into producing the TV, including the R&D involved. Your same argument applies to stealing a TV - they already invested the resources into producing the TV, so what difference does it make if you steal it? They produced it whether you even know that that TV exists or not.

Your argument is not logically consistent, as you can see.