SOPA and PIPA are dead. This doesn't mean that pirating software, music, games, and movies online is legal, but that the ability of copyright holders and government agencies to shut down the piracy supply chain remains limited.
The whole Internet community banded together to defeat SOPA and PIPA. We all felt good about protecting free speech in the face of the proposed measures. And it appears that we have won.
So we are left with the status quo. Piracy is still illegal, but it's still common. Copyright holders will continue their search for legal tools to shut down the pipeline. Pirates will continue to use ingenious methods to get their hands on copyrighted works.
What if we are looking at this the wrong way. What if, instead of expending their time and energy stopping piracy, copyright holders accepted the pirates as an inevitable, even helpful, part of the creative ecosystem?
A number of researchers, writers, and even copyright holders are starting to come around to this point of view. In increasing numbers, people are sharing their opinion that piracy is a good thing.
How could this be?
First, there's evidence that piracy is an exploration and sampling tool for the studios' best customers. Survey after survey shows that pirates are more likely to spend a bundle on movies, software, games, and movies. It appears that pirates download content to see if it's worth having, then purchase copies of the stuff they like. Not every pirate turns into a paying customer, but the overlap between pirates and good customers is undeniable. It's not intuitive, but it seems to be true: Pirates are the industry's best customers. As one analyst puts it: “If piracy is a sampling and discovery tool for high spenders, then suppressing piracy could depress legal sales.” Another study, conducted by the Society for Consumer Research, found that users of pirate sites employed the sites as “try before you buy” services, leading pirate site users to “buy more DVDs, visit the cinema more often, and on average, spend more than their 'honest' counterparts at the box office. A 2009 report from the BI Norwegian School of Management has found that those who download music illegally are also 10 times more likely to pay for songs than those who don't.
Second, there's the argument that sales lost to piracy should be considered a marketing cost. Pirates are social, and they spread the word about worthwhile content. Studio execs are pulling their hair out trying to generate favorable mentions on social-media platforms. Pirates are effective at generating such word-of-mouth advertising. And they do it for free.
In an interview with IGN, the founders of game company Team Meat explained that they view piracy as part of their marketing program. Team Meat's Edmund McMillen explains, “The majority of e-mails that we get that revolve around piracy are people saying, 'I just want to get this off my chest. I stole your game when it came out because I wasn't sure about it and I really, really, really love it and so I bought it because I feel real guilty.' This is a common e-mail.”
In his blog at Futurebook.net, publishing pro Timo Boezeman writes about the opportunities available to publishers who embrace piracy as a new avenue for reaching customers instead of a threat: “Think about why people pirate your books. Why would they do that? Think negative and you might say: they don’t want to pay for it. Could be. But the main reason is: they want your book! And that is a good thing, right? So if you want to use that in your own advantage, you could see piracy as sampling. Hey, an opportunity! Take over control and spread the work for free yourself. Not just the complete work with no further actions attached. But for instance a management summary of your (non-fiction) work. Or a version with ads (additional income!). Or a version with social media buttons included to let the readers spread the word (so they become ambassadors of your work, free marketing!). Of course with links included that can help people to buy the original work if they like it (and I know from experience that people do this) in a format they choose (e-book, hardcover, etc.). If you take this even one step further, you can also see that this could help the author spread his name (and expertise), which could lead to extra lectures, workshops or seminars. And if you offer the author a complete package (including arranging his presentations), this could become an alternative source of income for you as a publisher.”
The producers of a a small, independent movie called “Man from Earth” tell a common story: Their movie languished unwatched until it became popular on pirate download sites. Then sales took off, and revenues too. The whole story is here: Internet Piracy is Good for Films.
A similar dynamic helped the sales of the humorous parenting book Go the **** to Sleep. The book grabbed the #1 spot on Amazon's bestseller list—a month before its release. It seems that a pirated copy in PDF form became popular on download sites before the release date. Instead of depressing sales, the pirated version generated interest and demand, and led to higher sales.
You can listen to similar experiences from bestselling author Neil Gaiman in this video. Gaiman used to be against piracy, but his view changed when he noticed that his sales went up in countries where his books were being pirated. As an experiment, he put his novel American Gods on his Web site for free downloading. Sales went up by 300 percent – not just for American Gods, but for all of his books.
Author Paulo Coelho agrees. Coelho not only approves of piracy, but he has actually posted “pirated” versions of his own books at torrent sites like Pirate Bay. Coelho relates the publication history of one of his novels in Russia. The first year, it sold 3,000 copies. The next year a pirated copy was released, and he sold 10,000 copies. The next year saw 100,000 sales, and sales grew to more than a million the next year. Coelho says people bought the printed books after sampling the pirated versions.
Also rethinking piracy is Mikael Hed, CEO of Rovio, the company behind Angry Birds and other games. “Piracy may not be a bad thing,” he said at this week's Midem music conference in Cannes, France. “It can get us more business at the end of the day.”
The studios' claims of revenue lost to piracy are grotesquely inflated, but they surely are losing some sales to illegal downloads. It's just possible, however, that they are getting more than sufficient value in return.
Web recommendation: Here is the page in which Google details some of its charitable giving in 2011. The company says it donated more than $100 million to charity over the course of the year. That sounds like a lot...until you realize that it amounts to about one-fourth of one percent of the company's $37.9 billion in revenues. J.D. says check it out.
J.D. Hildebrand has written hundreds of articles for dozens of publications and online communities dedicated to software development. He wonders if any of his old friends from the dial-up Bulletin Board of the Absurd (7 cps speed limit enforced 24 hours per day) ever read these posts.