Dear RIAA: Pirates Buy More. Full Stop. Deal With It.

from the just-wondering dept

Just a few days after Joe Karaganis posted his response to the RIAA's favorite researcher, Russ Crupnick of NPD Group, who suggested that Karaganis must be drunk and have little knowledge of statistics to publish a study showing that pirates tend to buy more -- and then revealing his own numbers that showed the exact same thing -- UK regulatory body Ofcom has come out with a study saying the same exact thing again (found via TorrentFreak).

From this, I assume the only logical conclusion is that Ofcom officials are drunk and should have their statistics "licenses" taken away. That, or, it's pretty obvious that people who pirate aren't all just "evil pirates," but also include the industry's best customers, who are apparently being somewhat under-served by the industry. And that's actually supported by other data in the report. When asked what would make people stop infringing, people wanted cheaper legal services and services that had everything they want available to them legally, rather than piecemeal efforts that leave it impossible to get what you want much of the time. It also becomes clear that infringement is not on the margins, but a common activity. 66% of people noted that they had downloaded, streamed or shared infringing content -- with 56% doing so in the last three months -- with 16% admitting to illegal content streaming, downloading or sharing. And of course, the numbers are much bigger for younger people, meaning that those overall percentages are only likely to increase over time. Of course, the amount of sharing varied based on the content, but the idea of getting infringing content this way is clearly quite mainstream.

The study also looked at what they spent on, and, not surprisingly, money spent seems to be shifting to scarce goods -- the things that can't be "pirated." In the music world, that includes merchandise and live, as well as online subscriptions, rather than "buying music."
The report also suggests that, when you take into account price elasticity of both downloads and subscription services, the industry appears to be overpricing both significantly, and they could probably make a lot more money with significantly lower prices, making it up (and then some) based on volume: Note that, in both cases, if prices went much lower than they are today, even those who currently pirate everything would be much more likely to pay. They have similar tables for other types of content, showing the same basic thing as well. The elasticity on ebooks is really quite impressive, actually: All of this paints the same basic picture that plenty of us have been arguing for over a decade: treating "pirates" like criminals is a mistake. They're often either the best customers or the potential best customers if they were better served by the industry, which often means offering things more conveniently and at a lower price. But the industry still resists this notion and wants to continue to demonize all infringement and any service that helps infringement. What a wasted effort.