Study: True economic impact of piracy “unclear”
April 11, 2014
By Colin Mann
Noting that consumers copy and share digital files, with this being blamed for a potentially catastrophic decline in certain markets, an academic study has sought to establish why consumers copy and whether this is as economically harmful as often thought.
CREATe, the UK research centre for copyright, has put a decade of evidence to the test by reviewing studies published between 2003 and 2013. Applying techniques normally used in the medical sciences, articles on unlawful file sharing for digital media were methodically searched in academic databases, while non-academic literature was sought from key stakeholders and research centres. Over 54,000 sources were initially found and these were narrowed down to 206 articles which examined human behaviour, intentions or attitudes.
Professor Daniel Zizzo, an economist at the University of East Anglia and co-author of the study, said the research revealed that “current knowledge of file sharing is dramatically skewed by sector and method”.
According to Zizzo, most evidence is based on the unlawful file sharing of music, which has been subjected to far more research than movies and software, which themselves have been studied far more than videogames, books or TV. “This means there is a real risk of designing policy which meets the needs of a specific industry, possibly at the expense of other creative industries which are less well represented in the literature. Also, the economic effects found in one medium may not apply to another and current knowledge of file sharing is dramatically skewed by method,” he explained.
“The evidence on societal costs points in conflicting directions and our study shows that the impact of illegal downloading and file sharing remains unclear. Focussing on ‘lost sales’, and examining people’s hypothetical willingness to pay with and without the possibility of unlawful file sharing is insufficient. Regarding determinants of unlawful file sharing, there are many studies on self-reported attitudes, but few studies that observe behaviour. This is a problem, particularly as there is often a gap in findings between studies that use behaviour and studies that do not,” he admitted.
The researchers say that an important contribution of the new study is the identification of five testable reasons (or ‘Utilities’) why consumer copy: (a) Financial and Legal Utility (this is where the enforcement debate traditionally focussed: “you can’t compete with free”); (b) Experiential Utility (unlawful file sharing may be influenced by a desire to sample new content, to access niche content, or to build a collection); (c) Technical Utility (content is easier to access unlawfully); (d) Social Utility (it appears to matter what our peers do: a kind of herding effect); (e) Moral Utility (this perhaps motivates policy makers’ emphasis on the education of consumers).
A commonly held belief is that unlawful file sharing costs the creative economy billions of pounds every year. But according to Professor Martin Kretschmer, Professor of Intellectual Property Law at the University of Glasgow, and Director of CREATe, “legislating without understanding behaviour produces lop-sided policies. The most useful evidence increases our understanding of how to turn infringers into customers”.