sopa was horrible, but piracy is still a problem

January 22, 2012

With the well-deserved drama over SOPA and its sister bill, which are akin to taking a nuke to the web so an organization of huge content producers can protect their business model, Matthew Yglesias decided to make an impassioned defense of online piracy, arguing that it’s actually good to have a little of it because not every download means a lost sale and a number of these illegal downloads could translate into paying customers down the line. While it’s certainly true that a million illegal downloads of a $0.99 track doesn’t mean a loss for the studio that released it to the tune of $1 million, and it’s possible that a few thousand people who decided to download the track not because they knew the artist but didn’t want to pay but because it was free, went out and bought more of the artist’s music in the future, this odd logical calculus forgets about those who will only download because they don’t want to spend any cash. And while this seems like an omission, Yglesias’ leap of logic in positing that illegal downloads actually generate money gets truly bizarre in this example…

[E]ven when copyright infringement does lead to real loss of revenue to copyright owners , it’s not as if the money vanishes into a black hole. Suppose Joe Downloader uses BitTorrent to get a free copy of Beggars Banquet rather than forking over $7.99 to Amazon, and then goes out to eat some pizza. In this case, the Rolling Stones’ loss is the pizzeria’s gain and Joe gets to listen to a classic album. It’s at least not obvious that we should regard this, on balance, as harmful.

Why would we even regard this as a balance? The Rolling Stones are in music because it’s a business. The music they create is what pays their bills. Declaring that because they’re rich, they must’ve had enough and it would be just fine to pirate it (as many downloaders do) and spending money on pizza while getting the work they did for free, is not a balance. No one from the local pizza place is going to give the Rolling Stones a cut of the profits made on selling to Joe or Jane Downloader unless they own the pizza places in question. It’s very doubtful that Yglesias actually wants to say that it’s ok to download whatever you want as long as you spend a few bucks on a snack while you enjoy your pirated acquisition, but that is indeed what he seems to be saying and by the same logic, we could say that’s perfectly fine to download his book rather than buy it as long as we pay a visit to the grocery store after we do and get something for dinner between reading the result of months and months of his work. I’m sure he intended the proceeds from the book to be used to pay his mortgage and take his family on vacation, but hey, it’s ok. The money he doesn’t get will be spent elsewhere, right?

One of the big problems with the attitude that we should be able to download what we want because we want to and the content owners will often act like bullies, is that it opens the door to abuse. New artists trying to get into the entertainment industry have their efforts pirated and even though the downloaders praise them for an innovative or well executed song or movie, these artists don’t see a dime and never get on the radar of major corporations that could make them new household names. As a result, piracy perpetuates the status quo, the sequel, the remake, and the rehash along with an online entitlement culture which says that because of bad business habits or bad faith on the part of the content owners, you are now entitled to have whatever you want for free. Just try that with a nasty car dealer and see how far you’ll get with declaring that the car you wanted to buy is too expensive and the dealer is too shady, therefore you’ll be taking it free of charge. You’d expect to end up in jail of course. But in the digital world, this kind of behavior seems to be tolerated. And come to think of it, if music and movies today are all crap, why do you even want to download them in the first place? Why not let the studios and labels release crap and fail because no one buys it or listens to it? Surely we’d be able to get something new and exciting made or produced then, something worth paying to see and hear.

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  • Henk Poley

    If I look at this graph the music industry has been sleeping at the helm. They had since 2000 to come up with something. If anybody in the industry was watching they’d see that by 2007 they would end up at pre-CD sales figures. As far as I know that ‘something’ is:

    * artist tours (hard to pirate..)
    * easily available paid downloads (the Valve Steam solution)

    The first item is sadly not included in the graph. But for the second item I can that say that in my nook of the globe you couldn’t really buy music online until 2007 or so (and then trust that you could play it for some years).

    Say “stasis fields” were invented that froze time for anything you put into to, and it took the refrigerator companies 7 years to actually put stasis fields in some of their products too. Who’s problem would it be?

    To compare: Steam games even sell well Russia. Sort of *the* piracy country of the world, maybe just behind China.

    There’s also the famous ‘piracy experience’ graphic for movies.

    Incidentally, iTunes only added movies here 2 months ago, and then only a few. Around here there is literally no paid online movie service with an appreciable size library and no hoops, and only 2 when you especially like burning coasters to watch movies on your DivX enabled DVD player (aka, not your laptop, desktop, tablet, phone or media player).

    The music streaming service I *paid for* shut down access in 2008 where I live. Another service is available since 2010, but requires you to handpick the order in which you want to play music beforehand.

    Should I go on? btw, I do not live in a 3rd world country, on the contrary..

  • Jordan

    A common argument in defence of pirary is that artist, studios, publishers, ect are all filthy rich and won’t notice the loss of revenue. This line of thinking compleatly ignores the thousands of regular jobs piracy hurts. Software engineers, film crews, authors, copy-editors, technicians, ect. These people get hurt the most when people steal content online.

    My country, Canada, recently updated our copyright laws. Generally, I agree with the stricter approach take took with digital content. It is nowhere near as vauge and easily abused as SOPA and PIPA. That’s propbably because, unlike south of the 49th, corporations have very little pull on our legislative system as corportate and union contributions are banned.

  • Greg Fish

    This line of thinking compleatly ignores the thousands of regular jobs piracy hurts.

    Well, these jobs are not very obvious so they’re rarely taken into account when we’re focused on huge studios giving million dollar bonuses to their execs and MPAA’s and RIAA’s legal thuggery, which takes the focus off who piracy really hurts and turns the studios and labels into callous bullies.

  • Paul451

    “Just try that with a nasty car dealer and see how far you’ll get with declaring that the car you wanted to buy is too expensive and the dealer is too shady, therefore you’ll be taking it free of charge.”

    <sigh> “You wouldn’t steal a car”. No, but I’d copy the hell out of them if the technology ever became available.

    “that illegal downloads actually generate money”

    It’s been pointed for over a decade that downloaders spend more money (on average) on the item they download than people who don’t. (Ie, game pirates spend more money on games, music pirates on music, etc.)

    “New artists trying to get into the entertainment industry have their efforts pirated and even though the downloaders praise them for an innovative or well executed song or movie, these artists don’t see a dime and never get on the radar of major corporations”

    They won’t see a dime anyway from what I’ve read. Except for a few very successful artists, most performing artists do not receive enough from royalties to live on. They tour. They are workmen, they perform, they get paid, like any other profession. My plumber doesn’t get a royalty from every flush.

    The money from recorded music seems to primarily go to support “the industry”, not the artists. Even for top-10 albums. For most artists, albums are a form of advertising for their live shows. Only for those few major artists does it reverse, and the tour is to promote the album. The article below has $23 from every $1000 in sales going to the actual artists. 2.3% doesn’t seem much to justify the massive overreach of DMCA, SOPA & co.

    “that could make them new household names.”

    Most major new genres of music came into popularity in spite of, not because of, the record industry. Think hip-hop, electronica, etc, both of which were attacked by the industry before being adopted. Artists that are “made” by the studios (or TV shows like Idol) generally make even less money than artists who worked their way up, because those “made” artist probably don’t own rights to tours and merch either.

    “This line of thinking compleatly ignores the thousands of regular jobs piracy hurts”

    The copyright industry is actually tiny compared to the non-copyright (aka “fair use”) creative industries (such as fashion, furniture, jewellery.) Indeed, the entire global book and music industry would be a minor Google purchase.

    What’s also interesting is that much of the copyright industry is predicated on stealing as much as possible from artists. Most of the highest grossing films and albums for the highest profiting entertainment companies made technical losses. Not because they actually made losses, but because devious accounting methods. It’s even called “Hollywood accounting”.

    Artists suing for unpaid royalties is more common that not. Peter Jackson and the Tolkin family trust had to sue New Line studio for hundreds of millions in unpaid royalties from the Lord of the Rings trilogy even though they contracted for gross-percentage (not net), because New Line’s fraudulent accounting practices somehow turned six billion dollars gross revenue into a gross loss.

    And it’s a fair guess that the studio only settled in order to get The Hobbit made.

    Here’s an example with an actual leaked profit/loss statement from Warner pictures for Harry Potter and the Order of the Phoenix, showing how they turned a $612 million gross into a $167 million loss. Do you really think Warner made a $160m loss on a Harry Potter film?

    And you can find any number of examples of studios distributing music and other media that they didn’t have rights to, and didn’t pay royalties on. And when caught, they always pay a fraction of what they would have paid if they had normally licensing deals (let alone the penalties they’d pay if they were fined at the rate they try to fine pirates.) And they always settle with a clause specifically admitting no wrong-doing. The link below has the big four studios (Warner, Sony-BMG, EMI, Universal) “stealing” thousands of songs from Canadian artists that they didn’t have any rights to.

    The copyright industry seems to be irredeemably corrupt. While its death will hurt people who aren’t evil, not killing it seems to hurt people anyway and defends corruption and profits the corrupt. And given how small the industry really is, it should be possible to easily compensate the non-evil parts, like artists, while excising the evil parts, if we can finally accept the end of copyright.

  • winson

    “Just try that with a nasty car dealer and see how far you’ll get with declaring that the car you wanted to buy is too expensive and the dealer is too shady, therefore you’ll be taking it free of charge…”

    for a better comparison, you forgot to add that “joe illegal downloader” is not taking the exact car for free, he is going to his magician friend who can make a completely accurate replica and is offering unlimited copies for free.

  • Greg Fish

    Paul, it’s hard to argue that a lot of labels and studios act like bullies and that those at the very top lie and cheat their way around loyalties and residuals for the artists whose work they distribute. However, saying that we essentially need to end copyrights has a lot more radical complications than simply streamlining copyright law to be on the side of the individual artists rather than corporations, allowing the artists to call the shots or decide how to distribute their work.

  • Paul451

    “However, saying that we essentially need to end copyrights”

    I didn’t say “need”. Just is. Copyright is barely enforceable, and becoming less so. And its enforcement (whether dickish DRM restrictions or overwrought easily abused DMCA/SOPA/PIPA laws) seems to hurt a lot of innocent people, as well as being a completely disproportionate response to the scale of the crime (where individuals receive punishments for copying that are higher than they’d receive for shop-lifting), while do nothing to actually protect artists/etc. And its getting worse.

    But if we accept that copyright is dead, then we can start trying to figure out how to encourage/reward artists, how to revamp the copyright industries into post-copyright industries (like fashion/design/etc). We can just get on with it.

    But refusing to accept that copyright is dead means we keep the zombie alive using more and more extreme and harmful methods. We keep twisting the law in more and more harmful ways ( Until technology finally goes that last step and makes piracy universal and untraceable, and suddenly we’re left with the ashes of the industries we were trying to preserve.

    For most of human history we didn’t have copyright. Trying to retain it outside of its narrow window in history is foolish and harmful.

    “it’s hard to argue that a lot of labels and studios act like bullies and that those at the very top lie and cheat their way around loyalties and residuals for the artists whose work they distribute.”

    That’s not what I meant. It’s not that a few bad apples spoil the barrel. I mean that this is the only business practice of the industry. It’s not something that sometimes happens, it’s the way every project/film/album is administered. The four members of RIAA (Warner, Sony-BMG, Universal, EMI), and the six members of MPAA (Warner, Sony, Universal, Disney, Fox, Paramount-Viacom), use these methods exclusively. If you consider it “bullying” and “cheating” then the whole system is irredeemably corrupt. When trying to find solutions to protect our culture, the industry itself is not worth saving.

  • Jordan

    Copyright rewards artists for their work. Fasion, furniture and jewlery are material objects. Clothes, furniture, and (especially) jewlery are valued due to the material from which they are made more so than their non-material qualities. When someone buys a book, movie, song, video or board game they are not paying for the material from which it is made (in the case of software and ebooks there is no material) but the intellectual, artistic, or entertainment of the product. Copyright protects the innovation, creativity, and mental efffort put into a product. It encourages other artists, actors, directors, aouthors, ect. to create something new, different, and unique. Patents protect technological innovation, copyright protects cultural/intellectual innovation.

    I’m all for copyright law reform. We need to change copy law to benefit content creators over corporations and to account for new technology. However, I think we still need copyright. Without it, work will suffer tremendously.

    As for technology killing copyright, I don’t think that will happen. Technology is a double-edged sword. It gives pirates new ways to skirt the law, but also gives law-enforcement new ways to enforce it. Look how easily the US shutdown Megaupload. Bootlegging before the age of the internet could not be stopped with the flip of a switch.

  • Amox

    There is also the problem that there is a lot of music and/or movies that are almost impossible to find in one’s own country. For example, an artist’s album or EP may only be licensed for one country, and be permanently unavailable in another. At that point, it does not seem like a loss of revenue to pirate the music that one could not purchase anyway. There is sometimes the possibility of buying ridiculously overpriced physically imported CDs, but many independent artists are releasing digital only or limited run distribution of physical albums (putting out physical CDs can be expensive and unprofitable).

    I do agree about may pirates spending more money on music. Music piracy has turned me into a music junky. I spend too much money on music, and I pirate quite a bit as well. I am more likely to pirate an artist I am newly interested in to sample them, and usually buy additional albums from iTunes. Also, there is a lot of music that can’t be easily found for pirating, such as by lesser known and indie artists. You are right in that there are many who do not buy music at all, but I do believe that piracy has created a rise in music junkyism that has ultimately benefited artists and the music industry alike. However, this is only speculation on my part.

  • BadBass9

    Glad to see your back,Gfish. Thanks. After reading the comments on this post I feel the need to weigh in. Piracy of intellectual property is a problem. Mainly to the corporations who provide entertainment. As mentioned, artists receive little to nothing in royalties unless they own publishing rights. In the music industry, the artist pays all recording costs, reproduction costs, and distribution costs. This is where the advance goes. You sign a contract, then get an advance. The record company then bills, off the top of any monies received towards your royalties, the amount of the advance and any monies spent to promote your act, including touring costs.

    Most artists receive 5% or less of NET, not gross profits, and believe me, shelf space is out of this world expensive. According to the record companies. I’ve seen 1sq. ft. of shelf space valued higher than the most expensive Hong Kong real estate. So, while piracy is out there, enforcing draconian copyright laws does nothing to enrich artists. I would also like to point out that all movie production is a “work for hire”. To those unfamiliar with the term, it means what you do for the production of the movie is paid up front, with no back end(no royalties or claims after the movie is released). Unless you cut a side deal, which is rare. The Hollywood record companies tried to force this on recording artists a few years back, only to be met with fierce resistence.

    How do I know these things? I’ve been involved in the entertainment business for 40 years. I have seen it first hand. And no, I am not disgruntled. It’s how the industry works and you have to accept it or try to change it. Good luck with that one, as Hollywood has it’s hands in many politicians pockets. That’s why we end up with stupid ideas like SOPA and PIPA. In my opinion the internet should be unfiltered and uncensored.

  • Paul451


    “Clothes, furniture, and (especially) jewlery are valued due to the material from which they are made more so than their non-material qualities.”

    <laughs> Hardly. Maybe you and I look for the lowest price for the material+quality, most “fashion”, as opposed to mere clothing, is sold on brand and especially design. Designs which can’t be copyrighted. Same with furniture and other non-copyrightable designer items. The point being that the non-copyright designer industries vastly outweighs the copyright industry. Although RIAA/MPAA make a fuss about jobs, they are actually surprisingly small industries.

    Here’s another industry that technically has copyright, but in practice, there are no artist’s royalties. The physical arts. Painting, sculpture, etc. The works are resold without the artist (or their estate) seeing a single cent in royalties from any resale, nor from any increase in value of the work. In fact, when someone suggests putting a royalty system on art resale, similar to song-writer royalties, they are shouted down because of the “damage” it would do to the industry.

    Meanwhile, art keeps getting made.

    “Copyright protects the innovation, creativity, and mental efffort put into a product.”

    How does the copyright on Steamboat Willie protects “innovation and creativity”, but the non-copyright on Picasso’s multi-million dollar originals doesn’t?

  • Jypson

    I know this guy named Gypson, he fancies himself an “ethical pirate.” Gypson likes to try before he buys. He’s never stolen a car, but he test drove quite a few before he bought one. He’s never stolen a pair of running shoes, but he tried on quite a few pair before he found the right one to buy. He’s never stolen a game, album, or software, but he did give them a test run before making a purchase of the right one or deleting the crap. Did he technically violate those copyrights? Yup, but he didn’t take any money out of anyone’s pockets, and actually generated revenue for buying the good stuff. How long should Gypson go to jail for this?

  • Greg Fish

    Trying before you buy and just stealing it are two completely different things in my mind. Actually, I think a lot of studios and labels would make a lot of money by letting people try for a little while before they buy. My ridicule only applies to those who use really bad business practices as justification for stealing things outright.

  • Jypson

    I feel you Greg, my ire is with those who refuse to see the difference.

  • VictorianFlowerchild

    I realize this is an old thread, and I probably don’t have much new to add, but… I just don’t believe the ridiculous assertions from the entertainment industry about billions lost to pirating. Most of the comments here address music and movies, but what about books? I really want to support the writers of books I enjoy. I own thousands of books, and when I can, I love meeting the authors at book signings where I can support a local bookstore with my purchase. At the same time, I want to reduce the clutter in my home, so I bought a Kindle, figuring I’d buy paper-and-ink copies of only my very favorites from now on. But how ridiculous is it that Amazon charges (per the publishers) as much or more for an ebook than for the hardcover version? An ebook that they can strip off my Kindle at any time if it suits their purpose? (Remember the ironic 1984 scandal? Google it if you don’t.) Also, if I have a real book, I can lend it to someone, but if I do the same with an ebook, I’m in violation of copyright. I don’t know what the answer is, but I refuse to pay full price for ebooks when I know damn well the creator of the content is not the beneficiary. Sure, there are always going to be people who download everything in sight and never spend a cent, but they aren’t depriving content creators on a massive scale–studies have repeatedly shown that the biggest pirates are often the biggest purchasers. Corporate greed harms artists much more than pirates, and the artists know that.