Piracy is one of the largest issues with the
technological age, and there is a major effort being put forward by government
legislation to stop it however they can. Piracy affects music, video games,
books, movies, music videos and audio books, causing massive losses to the
respective industries those products are manufactured in. Perhaps the largest
impact piracy has is on the independent product developers, who don’t have
large fanbases who will purchase their products, and don’t have support from
the major companies to advertise and distribute mass quantities of their
product. While independent music is impacted the most by a single act of piracy in the music industry,
there are many factors involved with the detailing of piracy that make
determining who is most impacted by piracy overall.
The issue of piracy has sprung into the limelight
recently, with members of Congress attempting to force two anti-piracy bills
through before much controversy could sprout from them. These bills were called
the Stop Online Piracy Act (SOPA) and Protect Intellectual Property Act (PIPA),
and with heavy support from the video game, music and movie industries, these
bills nearly passed. While these bills had a noble goal in stopping possibly
the greatest loss of revenue in our nation’s history, they went about it the
wrong way, instead increasing the definition of piracy to include simple
streaming of copyrighted content on a website, and it granted the government
the power to effectively shut down any website deemed to have copyrighted
content without permission, which with the widened definition, would include
almost every website online at this moment, including government sites as well.
If the government is willing to take such extreme risks to shut down piracy, it
clearly must have a huge negative impact on the economy as a whole, and in
particular the music, video game and movie industries.
The scope of piracy in itself is a way to get what you
want without having to suffer consequences, whether those consequences are
money, shame of walking into a theatre, or other dire concerns people have. To
that extent, when the anti-piracy bills SOPA and PIPA came out, their
supporters claimed that the US Economy lost $200 to $250 billion per year from
piracy. If those numbers are to be true, that’s over $800 per citizen in
America, and the combined wealth of approximately 750,000 jobs. However, Cato
Institute’s Julian Sanchez proved that the numbers were horribly off, and the
government released a statement stating that the figures “cannot be
substantiated or traced back to an underlying data source or methodology,” so
they are to be ignored completely. A much more conservative estimate was
produced by the Institute for Policy Innovation; their grand total was a mere
$58 billion. However, Sanchez again proved these numbers to be wrong, as these
inflated the numbers intentionally, double-counting and sometimes even
triple-counting instances of piracy (Raustiala/Sprigman). As of now, there is no knowledge of the exact
impact that piracy plays on the industry, but it is definitely not as large as
it has been made out to be in the past.
While it may be near impossible to predict the impact of
piracy on the industry, it may be even smaller than previous estimates have
predicted. Robert G. Hammond, a professor of Economics at North Carolina State
University, submitted an analysis stating that piracy may not cause lost sales,
but the contrary; albums pirated more often actually sell more copies than
albums that aren’t pirated very frequently. "If it's an artist you've
never heard of or have [never] listened to, you're coming to it with a clean
slate, so there's a good chance you're not going to like it," he says.
"If you already know the artist, you're just downloading to make sure it's
not a clunker—if you like it, you'll still go out and buy it." However, he
later states that this may not be an improvement of the industry; comparing
piracy to Coca Cola advertisements, people will buy Coca Cola after seeing
them, but there may not be more people overall purchasing soda beverages, meaning
that it may not necessarily be good for the overall music industry (Koebler).
In order to judge why piracy makes such a big impact on
all these industries, we first must define what exactly piracy is, and other
related terms that are often combined within piracy. According to the
Merriam-Webster dictionary, the definition of piracy is, “the
unauthorized use of another's production, invention, or conception especially
in infringement of a copyright.” (Merriam-Webster) This is a very broad definition, and in fact
is not a very suitable definition of piracy, as playing music in a public place
could be defined as piracy, using this loose definition. As such, piracy is
more often redefined as, “the illegal use or download of copyrighted material
from unauthorized sources.” With this redefinition in place, it’s clear to see
how piracy can be a big issue; downloading anything you want for free, and with
almost no way to tell you have done it. However, upon research being done into
the issue of piracy, some people find that internet pirates, a term used to
clump together everyone who has committed piracy, actually fall into two
categories; people who would have bought the product if piracy wasn’t an
option, and people who wouldn’t have bought the product. These two groups are
lumped together as “lost sales,” though upon closer inspection, those who
otherwise wouldn’t buy the product aren’t a lost sale, rather than an acquired
fan that may in the future purchase similar products. A lost sale would be
someone in a middle class family in a first world country, choosing to save his
allowance to buy a guitar instead of his rock idol’s newest album, rather than
a poor starving child in an underdeveloped nation, who has to choose between food
and music. As well, in a worst case scenario, Merge co-founder Laura Ballance
states that “sometimes these bootleg sites are the ONLY WAY to get a hold of
certain artists’ music.”(Rossmure)
In many instances of the
aforementioned scenario, those certain artists are independent musicians.
However, what defines an independent musician is also up for debate. The most
common and widespread definition is a musician who is not signed onto one of
the major record companies, like Warner Music Group or Universal Music Group,
or their subsidiaries. However, there is a growing mindset where “indie” music
is entirely a do-it-yourself mentality, from writing to producing to shipping,
and even some define it as being signed to a record label that isn’t owned by
one of the major record companies, essentially splitting the original definition
in half. However, this is a very minute and unpopular definition; the majority
still define independent musicians as the former.
Being an indie band is a major
commitment; many bands are DIY projects, with very little outside help, save
for one or two producers who they were friends with before they started making
music. Any failure of an album release could result in a significant loss in
income, and as a result, could make a band crumble and disintegrate. Bang
Camaro, a hard rock band containing anywhere from 14 to 25 members at a time,
fell victim to this issue, when their albums didn’t sell well enough to support
such a massive group of guys with heavy desires for alcoholic beverages of the
Jack Daniels variety. Despite having a relatively large fanbase for an
independent band, the large demand for income for travelling as well as keeping
the band alive was too taxing for them to afford. Once they released their
second album to try and stay afloat, they began trying to tour again, but
organizing a group of that many people at once is difficult, and very few of
them could commit to a tour which would keep the band’s net worth around zero,
if maybe slightly positive. (Necochea)
Now, with both independent music and
piracy defined, we can adequately detail the problems indie musicians face
against people who download their music for free. The most direct comparison
one can make with independent music is to mainstream musicians, bands signed to
record labels owned by the major record companies. Using the most popular
source for legally acquiring music for mainstream bands, iTunes, and assuming a
$9.99 album is being sold, the record labels take over half the profits, at
$5.35, whereas the musicians take in a measly 94 cents, the remainder of which
is profit for iTunes. For the band to make the minimum wage for a month, their
album has to sell over 1,200 copies, which given the fact that they are
mainstream bands, is not as difficult as it sounds. Compare this to BandCamp,
the equivalent of iTunes for independent musicians; there, the hosting site
takes 15 cents per dollar, and the band earns 85 cents. Given the smaller
fanbase indie musicians have, this huge spike in profits is required to stay on
an even playing field. This also means, however, that pirating an indie album
worth $10 is equal to pirating nine mainstream albums worth $10 in terms of
revenue for the band.(Rossmure)
Another very basic issue surrounding
the debate of piracy is one of digital ownership, or the possession of a
product which contains no substance and is purely data, such as an MP3 music
file or an e-book. In 2009, Amazon thrust itself right into the middle of this
debate by removing George Orwell’s books “1984” and “Animal Farm” from their e-book
library, deleting them off any Amazon products that had the files, and
refunding the cost. While this sounds rational, the fact remains that Amazon
deleted products that were purchased and rightfully belonged to the customers,
which raised a major issue; is online content purchased from major online
retailers actually owned by the customer, or is it merely being borrowed for a
nondescript amount of time before they decide to take it away? Melissa Perenson
from PCWorld poses a scary thought about the consequences actions like this can
mean for the future, stating, “What happens if a controversial book
comes out, and a publisher decides to remove it from distribution? Or, a book
is banned for whatever reason -- as happened in parts of the world with The Satanic
Verses? Neither is a common scenario, but both are examples of the control we,
as owners, can potentially lose over the content we've purchased in the digital
realm. With physical content, no one, even a disgruntled copyright owner, can
take away what you've paid for.” If publishers or distributors decide that a
certain material isn’t suitable for public viewing, they can simply delete it
under the guise of protection, whether it is because the book is banned, or the
book is discontinued.
This issue pertains heavily to musicians as well, in the
form of DRM-locked media. First passed
by the Digital Millennium Copyright Act of 1998 (DMCA), digital rights
management (DRM) is a way for content creators/distributors to lock down any
unintended sale or use of their product. There are many faults with how the
system works, however, and a basic act like creating a CD with DRM-infused
media could trigger the DRM to lock up, preventing that file from ever being
used again. Attempting to recover a file that has been locked is, by legal
definition, piracy, and punishable as such. Fortunately, iTunes, the major
distributor and former DRM user, has changed their ways, and very few
distributors still use DRM-locked media, but it is still worthy of careful watch
due to the severity of the issue.
One of the large ways independent
artists, independent game designers and many other people are dealing with
piracy include a new website called Kickstarter. On Kickstarter, an individual
or group posts a monetary goal that they want to meet, and set a deadline. The
individual also sets up “milestones,” points where if you donate that amount of
money to their cause, they will reward you with ever-increasing goods. The
prizes can range from a variety of things, from an early download of the album
at a $10 donation, to having the band play a private concert in your house for
$6000. Many independent musicians are setting goals on Kickstarter and putting
the names of everyone who donated $25 or more in their “Special Thanks” section
of the album lyrics/art book. “When people can contribute and have recognition
for it on what they contributed to, it makes them feel very proud, and from our
experience, likely to buy our albums more, or donate more money the next time
we try it again,” states a second anonymous band, emphasizing the connection
that indie bands have with their fans.(Kickstarter)
Other ways independent bands have been
combating piracy is through a method aptly named “Name Your Price” sales, where
the band puts their album on sale for a minimum of one cent, and people can insert
their own price, whether that price is the minimum of one cent, or more than
the recommended price of $10. Andrew Benjamin, member of a band that subscribes
to this method of album sales, believes it can work, stating, “Some
people insist on paying more for our music than we ask. Hopefully these things
will balance, even on a larger scale.” (Rossmure)
As stated previously, the indie
musicians are hurt the most by one act of piracy, but there are a multitude of
factors that determine the group most often hit by piracy. The biggest issue
arising from the debate over piracy, however, is the topic of digital
ownership, the idea behind owning something that does not tangibly exist in
your own physical hands. Can something that one doesn’t own a physical copy of
be considered their own, or is it, as Perenson put it in her essay, simply
borrowing it at a set price? If it is possible to own something without
possessing it, does that give one the right to try to keep it in the instance
of a computer failure? These questions currently have no answer, and the future must define it so that basic ownership rights are defended.
Multimedia:
http://s3.amazonaws.com/infobeautiful2/selling_out_550.png
Word file I'll attach in the email
Sources:
Rossmure, Mark. "Skull and Trombones: Music Piracy's Effect on the Independent Musician." Steampunk Chronicle. N.p., Feb. 2012. Web.
"Piracy." Merriam-Webster. Merriam-Webster, n.d. Web. <http://www.merriam-webster.com/dictionary/piracy>.
Necochea, Alex. "What Happened to Bang Camaro?" Weblog post. MySpace. Bang Camaro, n.d. Web. <http://www.myspace.com/bangcamaro/blog/539159764>.
Kickstarter homepage
McCandless, David. "How Much Do Music Artists Earn Online?" How Much Do Music Artists Earn Online? N.p., 13 Apr. 2010. Web.
Raustiala, Kal, and Chris Sprigman. "How Much Do Music and Movie Piracy Really Hurt the U.S. Economy?" Freakonomics ». N.p., 12 Jan. 2012. Web.
Koebler, Jason. "Report: Album Piracy May Help Musicians Sell." US News. U.S.News & World Report, 29 May 2012. Web
