Friday, January 18, 2013

Does Piracy Hurt Digital Content Sales? Yes

| | DBW

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.

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