Piracy online: Piracy isn't always what the entertainment industry is trying to make us out to be, according to a new study from University of Indiana.
The entertainment industry has been demonizing piracy for decades, and very often up to parody point.
Industry groups, such as the American Film Association, are proposing increasingly aggressive and costly "solutions" to the problem (such as questionable lawsuits and banning pirates from the internet), which historically have not done much to slow down copyright infringement.
Piracy online: In the new study, the researchers of Indiana University, report that online piracy can sometimes have a positive impact on markets while overly aggressive, policing and punishing pirates can be completely counterproductive.
"When goods (information) are sold to consumers through a retailer, in some cases, a moderate level of piracy seems to have a surprisingly positive impact on both the manufacturer and retailer, while enhancing consumer welfare," the new study said. .
For example, research “The “Invisible Hand” of Piracy: An Economic Analysis of the Information-Goods Supply ChainShows that HBO's great success, Game Of Thrones, is breaking box office due to its high availability through archives torrents.
Researchers have found that piracy often works as a form of invisible competition, with prices rising from both the manufacturer (HBO) and the provider (say Comcast). If prices rise, users will simply resort to piracy, creating even greater losses.
The idea that piracy acts as a competitor control of markets is not a new argument. Countless companies (like Good Old Games) have found that the best solution to piracy is to offer cheaper and better products without DRM. This in itself makes piracy less enjoyable. But this is a lesson that many in the entertainment industry do not seem to want to learn.
Researchers are clear that their findings have their limits and that they do not openly argue that companies should fully embrace piracy. They argue, however, that if they understand the benefits of piracy as a form of invisible competition, they will find that overly aggressive anti-piracy efforts can hurt the market.
HBO executives have publicly stated that piracy can prove beneficial, because it creates epiadditional interest to consumers.
This seems to go hand in hand with the way Netflix handles unbridled service password sharing. The company sees code sharing more as one advertising tool, rather than as piracy that must be pounded mercilessly.
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