I’ve received a great response to my
recent article discussing piracy published last week. It’s topped my comment and page view records, and sparked very interesting debates on the site here and across all forms of social media.
But there’s something that isn’t really addressed that’s been nagging me ever since I wrote the article. Everyone’s been congratulating me for “getting it” when it comes to the future of media and the best ways to fight piracy. In turn, they claim that the media companies are so archaic in their distribution models and practices, they’re killing themselves. But they’re not, are they? I think they “get it” too, they’re just choosing to ignore racing toward these obvious solutions because piracy really isn’t the huge threat to them they claim it to be.
To sum up my original point, I’m trying to get the message across that piracy is a service problem. If media companies start embracing easy to use digital methods of distribution, it’s the best way to combat piracy. You might not be able to ever beat “free,” but you sure as hell can compete with “easy.”
Instead, the entertainment industry is just simply trying to wipe piracy off the face of the earth with internet censoring legislation like the recent SOPA and PIPA bills. What they fail to realize is that piracy is not something you can actually kill. It’s a hydra that will only get more powerful the longer and harder you try to find it.
What’s bothering me however, goes beyond these first few issues. It cuts to the very core of the claim that piracy is hurting the industry in a significant fashion. I’m thinking the real reason that the media companies haven’t adjusted to a digital distribution model isn’t because they’re moronic and slow. Multi-billion dollar companies usually aren’t. Rather, I believe the huff over piracy is way, way more smoke than fire, and if you were to actually look at the numbers, the entertainment industry isn’t suffering the way they claim they are at the hands of file-sharers.
What got me thinking about this was a recent article from our own E.D. Kain. He cites a game developer who complains about high piracy rates on the PC.
The rule applies to all entertainment industries, not just gaming. If piracy is so rampant and bent on destroying the industry, why have we not seen significant impact on the industry itself? Looking at Hollywood specifically, over the last ten years, as online piracy has risen, you would imagine a stark decline in box office receipts as all these murderous pirates watch films online instead of shelling out $5-15 to see a movie in theaters. But here they are:
2011 – $10.17B
2010 - $10.56B
2009 - $10.59B
2008 - $9.60B
2007 - $9.66B
2006 - $9.21B
2005 - $8.84B
2004 - $9.38B
2003 - $9.23B
2002 - $9.14B
2001 - $8.41B
There are ups, and there are downs, but in general it’s been an upward trend, with the last few years specifically seeing higher returns than ever for the industry. Additionally yes, DVD and Blu-ray sales are dropping, but digital sales have been skyrocketing, despite lackluster distribution channels. Also, keep in mind this is in the middle of a rather large recession accompanied by massive unemployment. Still, the numbers go up.
The same is true for the video game industry, often plagued by piracy, but it’s grown by leaps and bounds over the years. TV is moving online more than perhaps any other medium with things like Netflix streaming and Hulu, but yet channels keep debuting shows that blow away their old records.
So what’s going on here?
The problem is the overstatement of piracy’s effects. The idiotic rule of thumb in the industry is that one download equals one lost sale, and as such they are able to compute HUGE losses for themselves with download statistics. Using this sort of logic, the entertainment industry has claimed that despite record profits and returns, piracy is taking a giant chunk out of their bottom line.
The problem is that this assumes that A) people who pirate media have not already consumed that media legally and B) people who pirate media would have paid for it if piracy was not an alternative option
It’s just not accurate to claim the piracy is significantly hurting industry profits as the metric being used is not a fair or reasonable guess at sales lost from illegal downloads. You know what IS hurting industry profits? I’ll show you:
Green Lantern – Net Loss : $105M
The Big Year - Net Loss: $33M
Trespass - Net Loss: $29M
Mars Needs Moms – Net Loss: $136M
And that’s just from 2011. I would argue that releasing crappy movies has a far greater effect on the film industry bottom line than piracy ever could. Similar things happen when a hyped TV show bombs or an anticipated game is a letdown. Companies don’t rise and fall due to piracy, but they do based on the quality of the products they release.
The point I’m trying to make is that piracy is not this mammoth specter killing the entire entertainment industry like they would have you believe. I am not saying that there has never been a dollar or job lost because of it, nor am I encouraging the illegal practice in the least, but the natural ebbs and flows of the industry with big hits and misses are far more significant than miniscule piracy loses among a specific, young, tech-savvy group who knows how to get their media for free.
Just look around you. Call of Duty just broke every sales record on earth, AGAIN. Pay-channel HBO has found HUGE success with an incredibly high cost drama, Game of Thrones. Universal is making a $200M feature film based around the BATTLESHIP BOARD GAME.
If the industry is struggling, I just don’t see it, as their projects are getting bigger and more costly with each passing year. When a movie bombs or a show gets cancelled, no one ever says “oh, well, piracy.” Rather, it’s the quality of the product that accounts for such failures. Even with relatively high piracy rates across all forms of media, we’re still seeing blockbuster films, shows and games released at a higher rate than ever, and profits to match.
I think the media industries would love to kill piracy with a quick piece of legislation that blacks out every torrent site on the internet, but I don’t think they want to fight it so much that they’ll change their entire distribution model on a dime, which would actually go a long way toward truly competing with piracy. The reason things are the way they are is because they’re working. Despite the fact that even though yes, every piece of media is available on the internet for free somewhere, people are still buying.
So stop complaining. I’ll see you at the digital age when you decide it finally suits you, but until then, don’t act like you need to censor the internet in order to save your industry. You’re not on the brink of collapse, you’re more lucrative than you’ve ever been, and you’re not fooling anyone.
but yeah 
