Does Piracy Hurt Digital Content Sales? Yes

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A slide on piracy and digital content sales from DBW2013.

People who pirate digital content wouldn’t have bought it if it wasn’t available for free. Publishers can’t do anything about pirates anyway. And, besides, piracy doesn’t hurt ebook and other digital content sales.

All myths, according to Michael D. Smith, professor of information technology and marketing at Carnegie Mellon University, speaking at the Digital Book World Conference + Expo.

For the four oft-cited studies that have shown that piracy doesn’t hurt digital content sales, there are 25 that say that it does, for instance, said Smith.

Further, publishers should adopt two major strategies in combating piracy: Make their content available online and use anti-piracy laws.

Publishers can and do compete with pirated versions of their content available for free, said Smith, citing studies of major television networks adding content to legitimate distributors lowering demand for piracy of that material. When ABC added its content to Hulu, incidences of piracy of ABC content decreased 37%.

In another example, Smith cited an anonymous publisher that selectively windowed its ebook and print book titles to see if releasing the digital version after the print version would result in increased sales for the print version. Sales of print copies increased by 0.4% — but ebook sales decreased by 52% and overall sales dropped by 22%, presumably because of piracy.

Anti-piracy efforts also reduce incidences of piracy. Smith studied the effects of anti-piracy laws in France and of the take-down of piracy site Megaupload. In the case of the anti-piracy laws in France, conversation about the laws and then their implementation helped boost digital content sales by anywhere between 5% and 30%, depending on the content. And the shutdown of Megaupload coincided with reduced instances of piracy across multiple countries.

Not all stakeholders, however, care so much about ebook piracy.

“I love pirates. I get money from them all the time,” said the best-selling author of Wool, Hugh Howey, who will be speaking later at the Digital Book World Conference + Expo on his success story. “They send me money thanking me because they loved my book. I sometimes go onto torrent sites and if I don’t see my book there I feel bad because it means I’m not in demand.”

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12 thoughts on “Does Piracy Hurt Digital Content Sales? Yes

    • You’re right, Nate, and I should have included it. According to the presenter, 11 of the studies on the right had been reviewed and validated and one of the studies on the left had been reviewed and validated, though he did mention the one study on the left that had been validated had its persistent detractors who claim that if it had been done different the results would have been different.

      • On a side note: If studies are in a professional journal that has a peer-review process then they are reviewed regardless of their being a secondary review or meta-analysis.

  1. Michael Smith’s rather late to the game. It’s been accepted that piracy helps little-known authors gain traction in the marketplace. Self-published authors give away their content all the time, even through programs like Amazon.

    Piracy hurts sales of best-selling authors, on the theory that everyone already knows who they are, and marketing efforts are in place to push their books.

    The third strategy publishers also need to consider is pricing. A $25.99 ebook is practically an open invitation to piracy.

    • Giving away your book to particular opinion leaders and reviewers who can help your sales is a decades-old tactic that still works.

      Giving away the first book in a series works.

      Giving a stand-alone book away to all and sundry does not work nearly as well, and some people have found that it decreases sales.

      But no matter which way you see the picture, the fact is that the choice to give away the book belongs to the rights-holder and NOT to those who happen to have a copy, or to those who happen to want a free copy (aka pirates).

      And the discussion about whether or not it hurts sales is utterly not the point. You can’t take anything else I own even if you think it would be in my best interest. The issue is control, not results.

    • Mr. Bill Peschel,
      I apologize, as this is three months after the fact (even later to the game than you said Michael Smith was).

      Tardiness aside, my casual observation, regarding self-published authors versus best-selling authors giving away work, is antipodal to yours. Best-selling authors DO “give away” the first chapter of a new work, whether fiction or not. Consider the many first chapters, or lengthy excerpts from, that are published in The New York Times, sometimes in the newspaper itself, not even the book review. Of course, author consent is required.

      In contrast, self-published authors are not inclined to give away their work, in my experience. They have paid for publishing, by Amazon for example. Most seem eager to recoup that expense as rapidly as possible, given how often they self-promote their work online. I’m not being derisive of self-publishing. I am sympathetic to authors who wish to be paid for their original creative or didactic written work.

      As for a $25 e-book, that is a separate issue, with subtleties! One buys the right to access the e-book content, which is much more restrictive than purchasing a printed book. Amazon now offers e-book “rentals”, though I don’t know duration of access.

      The Google e-books product has not been well-received, particularly in the education marketplace. Many schoolteachers failed to realize than an e-book does not permit excerpting a table or a page, then copying it and distributing it to the class as part of a lesson plan. The Google e-books product forums are full of complaints about this.

      A similar misapprehension was that purchasing e-books would be a savings over traditional print textbooks. Many believed that only one purchase would be necessary, as the book could be shared with the entire class once the teacher made copies. Of course, that isn’t true. Yet it highlights the odd logic associated with digital content!

      If multiple copies of the hardbound version of a textbook must be purchased, one for each student, wouldn’t the same be true for e-books? The e-book should be less expensive due to the savings in printing and shipping costs, but the cost is primarily for the content of the book! Yet somehow, there was the misguided perception that the content had become free as well, i.e. of no value.

  2. Worth mentioning that one of the four ‘No’s’ has been discredited completely, with researchers drawing ‘Yes’ conclusion from same dataset.

    It’s very much a ‘Yes’, but the important discussion points raised include the impact of piracy on live music sales where various studies have concluded that where piracy is prevented, live music demand is reduced. This is where the profits come from.

    Similarly, a wealth of research has concluded that pirates also spend more money on recorded music.

    Tis a complex one. This article oversimplifies things. Indeed, movie piracy is as different to music piracy as that is to book piracy. Too complex to pigeonhole.

    See my blog for more info on this sort of content (www.musicpiracyresearchblog.blogspot.co.uk)

    Steven @musicpiracyblog

  3. News from the frontline – I look at pirate uploads every day.
    I have been working with publishers for over 12 months on researching and removing product from : torrent sites, file share sites, youtube, Ebay, Ioffer.com. ( to name just a few )
    As well as removing pirate files of ebooks and audiobooks – more effort must be made to make people aware they are breaking the law by sharing copyrighted work.
    The ‘pirate’ file can start on a torrent site and be downloaded by anyone ( global).
    I have found pirate files being sold as product on ebay, often as a
    ‘Author Collection’ eg 1,500 ebooks for $15 – download now – or on DVD discs.
    These products then get re-sold and distributed by multiple sellers over many auction sites.
    Ebay , Ioffer.com and Paypal are profiting from pirate sales, so are some websites from advertising revenue .
    I have also found complete audiobook uploads on Youtube , top selling titles loaded as a collection of 100 x 50 minute videos. These videos can also be turned into audio files and re-shared.( or sold )
    When I have had direct contact with these ‘pirates’ – most are everday people who are just
    making a few £’s – and they believe the content to be ‘ in the public domain’.
    They are confusing ‘ finding a free download’ with a 70 year publishing copyright.

    Pirate files have been loaded up for the past 5 years – and more get added daily.
    More action is needed – it is just getting worse.

    When your new best seller range starts selling at £1.99 on Ebay
    you know you have a problem.

  4. Bill Peschel wrote:
    \It’s been accepted that piracy helps little-known authors gain traction in the marketplace. Self-published authors give away their content all the time, even through programs like Amazon. \

    If publishers are giving away their work then it’s not piracy. You as an owner/publisher have every right to give away your work, if you think that’s the best way to distribute. And there are perfectly valid reasons for doing so. Piracy though would amount to giving your work away for free, even if you didn’t want to do so.
    How does that help authors, first time or otherwise?

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