Advanced Television

Policing these pointless numbers

July 3, 2013

A recent report informed us that the City of London Police are, along with the Intellectual Property Office, setting up a special unit to tackle digital piracy and counterfeiting. The IPO is going to provide £2.5 million over two years for the unit. Not exactly the FBI is it?

I’m guessing that sum is less than the various lobby groups – who all saluted the new unit – have paid for the shocking – and I mean shocking – consultancies, surveys and reports that justify their existence. Nothing new in this, or even unusual. All industries, indeed all walks of life, have problems that spawn associations, agencies, inquiries, lobby groups, etc, etc, to try and solve them. The trouble is, of course, that if they made too much progress in their War Against ……… (you fill in the crime, social problem, environmental crisis, political gridlock, of choice), they’d all be out of their terribly important – but hard to evaluate – jobs.

Not surprisingly, then, these armies of antis (they’re usually anti something), call in aid the ammunition of statistics provided by their camp followers; the craven consultancies and research firms who also feed off the fear of…. (again, fill in your crusade of choice).

And, of course, they maximise the impact of these numbers. By maximise I mean exaggerate. Nothing unusual here either; it’s just human nature isn’t it? But that doesn’t mean we have to take them seriously or be afraid of calling self-serving rubbish by its name. The problem is many of these lobbies are so effective they turn common sense criticism, or simple questions, into heresy against the received wisdom – received, that is, from them. Before you know it anyone with an alternative point of view is denounced as a ‘denier’ or a ‘defender of’….. (again, – you know what to do).

In the press release bringing us news of the new unit, reference was made by supportive ‘industry bodies’ to several ‘relevant’ reports. One stands out. It has been around a while but that doesn’t stop it being dusted down at every opportunity; the digital piracy equivalent of shroud waving. It is the Global Impact report on piracy and counterfeiting by Frontier Economics written for the International Chamber of Commerce Business Action to Stop Counterfeiting and Piracy (the clue to what they were looking for is in the name).

Before we move on to the numbers per se, let’s look at how the official government announcement uses, or rather misuses, them. It says: “Globally, it is projected that digitally pirated music, films and software will account for losses of around $80 billion – this is expected to rise to $240 billion by 2015.” That’s not really open to interpretation is it? There’s no attribution, but it clearly states that a report – a report it presumably thinks is credible – says losses from digital piracy are $80 billion and will rise to $240 billion. Let’s leave aside the ridiculous notion of setting up a £1.25 million a year unit to deal with the UK end of this problem and focus on accuracy.

Read the release.

First, to be fair to it, the Frontier report doesn’t say this. It says the current losses (in 2011) – building on data estimated by the OECD in 2008 –are $30-75 billion rising to $80 billion – $240 billion in 2015.  If the government can’t even read the headline conclusion of a report correctly, can we be surprised it can’t build a hospital, or a railroad or an aircraft carrier for within 300 per cent of what it budgeted?

Second, the Frontier report doesn’t say these are the losses, it says this is the value of the pirate material out there. As it says itself: “We note that the value of unlicensed digital files available on line (hereinafter referred to as commercial value) is largely dependent on estimations of volume and will inevitably be greater than business losses, which depend crucially on the assumed substitution rates.”

Quite. You may well ask, so what’s the point of this report? You would ask that even if you thought there was any credibility in a forecast that varies from $80 billion – $240 billion of value. And you would be right.

The report is commissioned by organisations whose existence relies on there being a big problem. Luckily, the report confirms there is actually a massive problem. Then the government makes policy based on, apparently, not even reading the report and yet still managing to over interpret it. Brilliant!

These lobby organisations are the same as, or closely allied to, those that predicted the end of the music industry because of piracy. They were wrong – once the industry decided it needed a new business model; making content available to consumers in ways and at prices they wanted, piracy faded. The signs are the same will be – is – true for video content; P2P streaming was already in decline when this report was written and has gone on declining since. TV Everywhere supplied reliably and at reasonable prices is demonstrably what the consumer wants.

This doesn’t mean theft, organised pay-TV break-ins or wholesale post-broadcast re-use, aren’t a problem and don’t need highly effective CA and DRM to combat them. But to suggest – and to try and back it up with ‘statistics’ – that the problem can be quantified as the equivalent of a wild guess at the retail value of unauthorised material out there is laughable.

Worse than that it is dangerous, it endangers the credibility of the entire IP protection lobby, and that is serious because it does have a proper job to do making sure creators and producers get their share of the revenue delivered by their work.

The other danger is the hernias the research companies and consultants might suffer while pushing their wheelbarrows of fees to the bank while laughing all the way!



Categories: CA/DRM, Consumer Behaviour, Content, Markets, Nick Snow, Piracy, Research, Rights