Yahoo Finance Why Digital Piracy May Be Good For The Creative Industry
I recently came across an interesting Channel NewsAsia article regarding piracy. No, it wasn’t about Somali pirates pulling off raids on commercial shipping along the Horn of Africa. It was about digital piracy. According to the survey mentioned in the article, 74% of Singaporeans aged 19-24 actively participate in digital piracy.
Pirates have come a long way in the short span of a few hundred years…
That’s pretty surprising!
I really thought the numbers would have been much higher. The fact that Singaporeans digitally pillage movies, music, and software with Genghis Khan-like tenacity shouldn’t surprise anyone. But I’m not condemning them for it. The fact is that digital piracy isn’t as harmful as the creative industry wants you to think. Hell, it’s actually helpful!
Here’s why:
Piracy Isn’t As Harmful As the Creative Industry Wants You to Believe
Hollywood and the big record labels have launched a crusade against digital piracy under the argument that they’re taking “huge” losses, which hurts the average Joe working on the set or in the studio. If you’ve visited a certain local cinema chain (the one that plays 20 minutes of commercials before finally playing the damn movie), you’ve seen the anti-piracy public service announcements condemning it.
But is digital piracy really causing the entertainment industry such losses?
A recent study conducted by Bart Cammerts, Robin Mansell, and Bingchun Meng from the London School of Economics and Political Science (LSE) proves otherwise. Here are the interesting facts that the study uncovered:
Cinema: Despite the Motion Picture Association of America’s (MPAA) claim that online piracy is devastating to the movie industry, Hollywood achieved record-breaking global box office revenues of $35 Billion USD in 2012, a 6% increase over 2011.
Music: Declining sales of recorded music were offset by increasing revenue from live performances and growing digital revenues, including streaming services. In 2012, some 34% of revenue globally (excluding revenue from live performances) was generated by digital channels including streaming and downloads, up from 27% three years earlier. In addition, worldwide sales of recorded music increased in 2012 for the first time since 1999.
Gaming: The gaming industry has been generating new income streams very successfully by developing combinations of free advertising models, in-apps buying and micro pricing. It is projected to grow at 6.5% wish estimated revenues of $87 Billion USD in 2017, up from $63 Billion in 2012.
Publishing: In 2013, the global book publishing industry was worth some $102 Billion USD, larger than the film, music or video games industries. Although revenues from print book sales have declined, this has been offset by increases in sales of eBooks and the rate of growth is not declining despite reports lamenting the “end of the book.”
How much did you spend on “authentic” CDs, DVDs, Blu-ray disks, and Books in 2013? Compare that to how much you spent on live performances, “authentic” downloads/digital streaming, and trips to the movie theater in 2013. Do your numbers correlate to the findings of the study above?
Piracy Gives You Access to the Career Tools You Need
If you’re a student, musician, or work in the creative industry, then you know that software piracy is about as commonplace as well… working on a pirate ship. Students need word processing and office programs, musicians need editing software, and of course, “creatives” need image editing and illustration software.
Of course, the biggest reason why people pirate is price. Many software packages retail for hundreds or thousands of dollars – money that the working class student or young professional can’t afford. Not yet anyway.
“Software is just too expensive,” says Sarah, a young graphic designer working for a local design agency. “It’s easy to say an investment of $1,000 in Photoshop CS6 will be returned in just a few projects. But with my tight budget and fierce competition for design services, I really can’t afford to wait to save up and buy it.”
Piracy isn’t just about cost – it’s also about economic contribution. Students and young professionals such as Sarah pirate software they need in order to build up their professional skills and knowledge. Having experience with certain types of software is key to landing jobs in Singapore’s increasingly competitive job atmosphere.
Engineers need experience with AutoCAD and Autodesk. Graphic designers need experience with Photoshop and InDesign. That’s just the way it is. And in this unfair world that we live in, the people who break the rules by pirating software to get a leg up on the competition are more valuable to employers. Employers don’t want to train job applicants on software. They want candidates who already have experience using required software programs.
Piracy Helps Companies Innovate Products and Services You Will Pay For
Borders and HMV (RIP you lost fragments of my childhood) make up just a small percentage of the long-standing companies that have perished over the last few years. No doubt digital piracy had a hand in their demise, but then again, so did their inability to adapt to the digital age and evolving consumer habits.
Then again, is it really all that surprising? Think about it. How can you compare a store that’s selling a Blu-ray for $60 SGD to a peer-to-peer (P2P) sharing site that gives you the same movie for free? That’s like matching a young Mike Tyson against some no-name fighter. It’s not a contest. It’s a massacre.
But several companies have learned enough from digital piracy to change their business models and provide products and services consumers are willing to pay for:
NetFlix: With 40 million global subscribers and growing, Netflix has succeeded despite piracy because it gives consumers what they want, “TV shows & movies anytime, anywhere. For one low monthly price.” At least to consumers outside of Singapore anyway (what’s the deal MDA?).
Adobe: The Company behind some of the most pirated software programs in the world finally caught on to the piracy problem and did something ingenious. Adobe introduced monthly subscriptions at reasonable prices for students, individuals, and businesses. Now there’s less of a need to pay $1,000+ on software that you subscribe for less than $100 a month.
Steam: While Steam hasn’t completely eliminated computer game piracy, it has definitely kept it in check by making digital distribution cheap, easy, and mainstream for gamers. Steam did it by giving video game companies a low-piracy environment for them to offer their games while providing better value, service, and gaming environment for consumers.
Sony PlayStation Network: The PlayStation Network borrows some of NetFlix’s ingenuity (and even offers NetFlix streaming in the U.S.) by letting consumers own or “rent” new or classic movies via download/streaming video. You can also purchase games from the convenience of your home or even join PlayStation®Plus for free games, discounts, and online “cloud” game storage. Unfortunately, customers in Singapore aren’t given the option to buy/rent movies, or use NetFlix.
Final Note: Yes, I think we all agree that piracy is stealing. But to say that piracy is more harmful than good completely neglects many of the positive changes it has brought consumers. The reality is that piracy is here to stay, there’s no changing that.
Even if you block sites that enable P2P sharing with a “Great Firewall of China” type of censorship operation, more sites will just pop up and replace them. Mitigating the “danger” of piracy doesn’t take government intervention, but innovation on the part of businesses.
As the great Kevin Spacey once said on the subject, “Give users control, what they want, when they want it, at a fair price, and stop worrying about piracy.”
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