Thursday, February 24, 2011

the economics of movie piracy

piracy (in the 'copyright infringement' sense) is illegal. no ifs, buts, or maybes.

yet many people participate in it and have no qualms about doing so. i'm not talking about those who make money from piracy, eg selling bootleg DVDs etc, rather those who typically "share" via peer-to-peer networks and the like, for "personal use/enjoyment" and not for any commercial gain, unless you count the fact that the gain is that they haven't had to pay money for something they otherwise would have paid for...

and herein lies the rub of some contrasting views on the economic consequences of piracy.

the australian federation against copyright theft (afact) recently released a study (get the PDF here) that claims this cost to be $1.37b per year for the australian economy.

electronic frontiers australia (efa) countered by calling for "a skeptical reading of this report", noting 8 flaws with the study and the conclusions it drew. internet person matt also casts doubts about the study's reasoning in his blog entry and flow chart.

another recent japanese study examined the case of tv animation in japan on the issue of "Do Illegal Copies of Movies Reduce the Revenue of Legal Products?", and found that youtube can be interpreted as a promotional tool for (boosting) DVD sales. the full study is in japanese though...

somehow i don't see the likes of afact winning this war, even though they have the legal high ground. who knows, maybe the laws will change one day?

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