Online Piracy Kills Your Digital Storage, Not the Entertainment Industry

imagesIn the United States, new movies are typically released in theaters every week. Some are great box office hits, while others are just plain terrible. Yet, who is to blame when a movie that did well in its prequels falls $10 million short of initial projections in its most recent debut? There are several different factors that can be considered. For one, maybe the movie trailer did not spark enough curiosity from its audience. Maybe it was just bad timing because of keen competition with other movies that had the same release date. However, the more popular suspect that will get the most attention is piracy. Due to the fact that piracy is a crime in the United States, it becomes the easiest scapegoat for most failures in the music or movie industry. On the contrary, pirates are some of the heaviest consumers who contribute to the economic growth of entertainment, and are more likely to pay for media than non-pirates. Thus, piracy should not be considered as detrimental to the digital entertainment industry.

Online piracy is the unauthorized duplication of some type of entertainment media via the internet – basically digital theft. It all began with a peer-to-peer program called Napster. This file sharing program was shut down in 1999 after being sued by the Recording Industry Association of America (RIAA) for copyright infringement. But even though Napster got shut down, many more file sharing programs were created (Kazaa, LimeWire, BearShare, MegaUpload, The Pirate Bay, BitTorrent, etc.) with the same idea of helping others download, upload, and transfer files to one another. Online piracy has become as widespread as the internet itself, and now a regular practice throughout the world.

In current events, the film “The Expendables 3” was released on August 15, 2014. Instead of the $27 million they expected, the debut of the movie only earned approximately $16 million. Is piracy to blame? Looking at the original “Expendables” and “The Expendables 2” the film’s initial numbers weren’t impressive to begin with, being called “the worst in series history.” Meanwhile, movies like “Teenage Mutant Ninja Turtles” and “Guardians of the Galaxy” each grossed over $24 million in the box office charts on the same release date of August 15th. So the question again, is piracy to blame?

Studies and statistics on piracy can be very bias and contradictory. Therefore, certain information such as drastic decline in revenues reported by groups like the RIAA and the Motion Picture Association of America (MPAA) is just not yet reliable. For instance, Hollywood claims piracy has destroyed their industry as new technology gives easier access to content. However, there is evidence that piracy can actually promote sales and help the economy of entertainment. The entertainment industry has grown by 50% and the average consumer increased the amount of money he or she spends on entertainment. When the movie “X-Men Origins: Wolverine” was released, a copy of it was leaked and shared throughout mainstream consumers via online piracy. The picture still managed to globally collect an approximate $370 million. The same concept is also emerging in the music industry.

The London School of Economics (LSE) has reported that more evidence shows piracy can actually increase sales, where the overall revenue of the music industry in 2011 was almost $60 billion in the U.S., and in 2012, worldwide sales of recorded music increased for the first time since 1999. The United States is even encouraged by LSE to “reform their copyright enforcement regimes, which they say are out of step with such developments and with online culture generally and do not necessarily even serve the interests of the creators they claim to be protecting.” A study done at North Carolina State University in observance of file sharing through use of BitTorrent protocol has shown that pirated music has higher sales than ones that are not pirated. After the Institute for Prospective Technological Studies examined online habits of 16,000 Europeans, a resulting report by the European Commission Joint Research Centre stated that web piracy does not harm legitimate sales. In retrospect, of the most pirated items on the web, music is at 2.9% while pornography is at 35.8%. It seems that the claims by the RIAA and MPAA are more prevalent than what actual data reveals.

There are copyright owners who even voluntarily put their work online for free. Science fiction author Cory Doctorow offers all of his works online for free, stating that “most people who download his free e-books wouldn’t have purchased any version of them to begin with – but for some, the free e-books are an enticement to buy the printed version and recommend them to their friends, gaining him sales that otherwise wouldn’t have existed.” Artists like Lady Gaga, Neil Young, Shakira and several others are actually in support of piracy, because they care more about sharing and spreading their music than benefiting from selling their songs.

Lady Gaga affirmed in an interview with Times that she “accepts unauthorized music-sharing because touring makes up for piracy.” Gaga further stated that “Big artists can make anywhere from $50 millon for one cycle of two years’ touring. Giant artists make upwards of $100 million. Make music–then tour. It’s just the way it is today.” The interview of the pop artist was fueled by the Stop Online Piracy Act (SOPA) and Protect Intellectual Property Act (PIPA). These acts were trying to put ends to online piracy in the U.S. It foundered back in 2012 because it was in violation of the First, Fourth, and Fifth Amendments which prohibits all levels of government from depriving individuals of their basic constitutional rights to life, liberty, and property.

Supporters of SOPA and PIPA claimed that piracy is hurting the economy and robbing artists and moviemakers of their jobs. In fact, piracy supposedly costs the “U.S. economy between $200 and $250 billion per year, and is responsible for the loss of 750,000 American jobs.” This claim is quite exaggerating, as 750,000 jobs is nearly twice the number of those employed in the entire motion picture and video industries in 2013. As for the economical decline between $200 and $250 billion each year, how are the lost sales actually calculated? Piracy occurs all over the world, where China is the leading country for committing online piracy at 91%. Internationally, it should be considered that there are cases where the person pirating the movie or song would have never bought it in the first place. So can it really be considered a lost sale? This is especially true if the consumer lives in a relatively poor country, like China, and is simply unable to afford to pay for the films and music he or she downloads. Thus, the comparison in piracy statistics versus jobs and U.S. economy are flawed and cannot be taken as sustained evidence that piracy is detrimental to the digital entertainment industry.

In summation, online piracy remains a controversy for many different reasons. There is an abundant amount of advocates and non-supporters who will continue to debate. But as time goes on, prices in everything will increase to keep up with the economy. This means an increase in movie tickets, charges for songs on iTunes, memberships on NetFlix, all leading to the encouragement of online piracy. Therefore, who is really hurting the entertainment industry – mainstream consumers? Or the industries themselves? Online piracy does not seem like it will end soon, but neither will artists and movie makers stop doing their jobs. Massively overpaid talent may decline, but that still does not mean piracy affects the digital entertainment industry whatsoever.

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