Yet Another Study Shows You Beat Piracy Through Innovation, Rather Than Enforcement

Three years ago we released our Carrot or the Stick? paper, in which we explored piracy rates in a bunch of different countries, and looked at what appeared to be most effective in reducing piracy: greater legal enforcement or innovative new services. Time and time again our research highlighted how it was innovation -- in the form of user friendly licensed services (the user friendly part is important...) would lead to a noticeable reduction in piracy (sometimes in dramatic ways). On the other hand, increased legal enforcement appeared to have (if anything) only a temporary effect.

It appears that others are now exploring the same area, and doing quite an incredible job with it. A group of Dutch researchers at the Institute for Information Law at the University of Amsterdam have just released a Global Online Piracy Study that does an incredible job looking at the same questions with even more thorough data and analysis. They surveyed 35,000 people and looked at situations in 13 different countries (larger than our sample). The conclusions of the report appear notably similar to our own research, which is great to see (as it certainly helps to confirm what we found):

Still, despite the abundance of enforcement measures, their perceived effectiveness is uncertain. Therefore,it is questionable whether the answer to successfully tackling online copyright infringement lies in additionalrights or enforcement measures, especially if these will not lead to additional revenue for copyright holdersand risk coming into conflict with fundamental rights of users and intermediaries. Instead, it might besensible to search for the answer to piracy elsewhere - in the provision of affordable and convenient legalaccess to copyright-protected content.

The report also found the following, suggesting that the trend that we saw clearly demonstrated back in 2015 has continued:

Between 2014 and 2017, the number ofpirates decreased in all European countries except Germany.

As with our report that found enforcement actions had little to do with decreasing piracy rates, this report found similar things:

It might be tempting to argue that an increase in the use of certain enforcement measures against obviouslyillegal platforms has contributed to the decreasing number of pirates in Europe. However, a lack of evidenceconcerning the effectiveness of most enforcement measures and the strong link between piracy and theavailability and affordability of content suggests otherwise: at a country level, online piracy correlatesremarkably strongly with a lack of purchasing power. Higher per capita income coincides with a lowernumber of pirates per legal users.

Moreover, pirates and legal users are largely the same people: demographically, pirates resemble legalusers quite closely, although on average they tend to be somewhat younger and more often male. Moreimportantly, for each content type and country, 95% or more of pirates also consume content legally andtheir median legal consumption is typically twice that of non-pirating legal users.

That latter point has been shown in over a dozen studies previously, and it's incredible that it still needs to be repeated: pirates are often the best customers.

One interesting question might be why did Germany not see piracy decrease in the same manner as other countries. One reason might be that of the various countries studied, it already had one of the lowest piracy rates (29% of respondents claimed to have accessed some unauthorized content in the previous year). Only Japan was lower at 23%. So there's some argument that there may be a natural floor on this sort of thing, below which you can't go much lower. There are some other potential reasons hinted at within the report, including that the population of Germany is older than in most of those other countries, and it's one of the very rare cases of a country where physical sales of music still is ahead of digital sales. In short: there may be a lot of people in Germany who aren't that internet savvy.

Either way this is a really useful addition to the economic literature on this issue, suggesting (yet again) as we've argued for years, that focusing on greater enforcement has always been a huge waste of time, resources and money -- and comes at tremendous costs to free speech and innovation. Incredibly, that's likely been massively counterproductive to the goal of reducing piracy, since we need that innovation in licensed services to help reduce piracy. Of course, those who live in the world of the legacy industries have spent so many decades living and breathing the idea that enforcement is the only answer that I doubt this particular study will move the needle in convincing them to maybe start approaching things differently.