The EU Suppressed A 300-Page Study That Found Piracy Doesn't Harm Sales

The European Commission paid €360,000 ($541,980) for a study on how piracy impacts the sales of copyrighted music, books, video games and movies. But the EU never shared the report -- possibly because it determined that there is no evidence that piracy is a major problem.

Image: Getty

The Dutch firm Ecory was commissioned to research the impact of piracy for several months, eventually submitting a 304-page report to the EU in May 2015. The report concluded that: "In general, the results do not show robust statistical evidence of displacement of sales by online copyright infringements. That does not necessarily mean that piracy has no effect but only that the statistical analysis does not prove with sufficient reliability that there is an effect."

The report found that illegal downloads and streams can actually boost legal sales of games, according to the report. The only negative link the report found was with major blockbuster films: "The results show a displacement rate of 40 per cent which means that for every ten recent top films watched illegally, four fewer films are consumed legally."

The study has only come to light now because Julia Reda, a Member of the European Parliament representing the German Pirate Party, posted the report on her personal blog after she got ahold of a copy through an EU Freedom of Information access to document request.

The European Digital Rights organisation suggested in a blog post that the full contents of this report were intentionally suppressed, pointing to a 2016 academic paper by two Commission officials. The paper, "Movie Piracy and Displaced Sales in Europe", only mentioned the part of the Ecory report that highlights the relationship between piracy and blockbuster film lost sales, and excluded the other findings of the report. Additionally, the paper didn't even disclose that the cited information came from Ecory's study.

[JuliaReda.eu, European Digital Rights, TechDirt]

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Comments

    Doesn't surprise me at all. Personally I'm generally the type who will consume things as soon as they're available if I'm interested. Whether or not they're available to me legally or not wasn't the hugest issue in the past. I would then hype the things I was enjoying to my friends, many of whom would happily buy the DVD or pay for Foxtel and consume the media.

    Now? I realised if someone doesn't want me to view their product, then that's fine! They don't deserve me selling it for them either. I haven't pirated anything in ages, I just view what I'd like and enjoy that is easily available through the paid means I'm willing to support. I'm not watching a 4k show in sub 1080 while waiting longer and paying way too much for it.

      Doesn't surprise me for a slightly different reason, lots of people will buy what they can buy. So if they have spare cash of $50 that's what they spend, regardless of how many Movies/CDs/Books are available. They may pirate additional content, but it doesn't make any real difference because they still buy $50 worth of content and they were never going to spend more than $50 in the first place.

      So there is no actual loss. At best(worst) there may be a redistribution of who gets the money since they'd have to prioritize which movies they watched or CDs they bought. Which in all likelihood means the big blockbusters would get the cash and the smaller stuff would suffer.

      Personally, I'm a collector, so regardless of whether I've seen a movie I like to buy the DVD/Blu-ray if it's even slightly enjoyable. Not sure exactly how many movies I have but it's somewhere over 2000 with probably double that in CDs (and tapes and vinyl). Not admitting to piracy, but if I did pirate it would make zero difference to what I buy since I'm going to buy the movie/CD anyway. Unless it's utter, utter junk.

    I remember years back reading software company Cakewalk (which makes music recording software) stated that the piracy of their software didn't hurt sales, as they concluded that most of the people that downloaded illegal versions would never have bought the software anyway. Basically, they realised that it was wrong to say every copy pirated was a lost sale, as most would never have been customers in the first place. Not sure if Music and Film would be different to that take.

      Other studies (I think one was the Canadian RIA) showed that people that pirated were also the highest volume purchasers. They had a natural interest in the media, and while they would pirate, they would also spend a much higher than average amount buying the stuff they liked.

      Meanwhile, people that didn't pirate typically spent less than average, because they had less interest. Not all the time, there are always outliers on both sides, but on average piracy generally led to more sales.

      It wasn't a surprise that it was pretty much suppressed by their counterparts south of the border. Wish I could find a link, but this was quite a while ago now, and seems to be lost in the background noise.

      There are just so many reports though that basically say the same thing - music sales aren't down because of piracy, they're down for other reasons. Other studies have shown that in identifiable spikes in uploaded files, had zero effect on sales, which didn't change.

      Or reports that 5000 downloads equates to a single lost sale, which conflates to 2 million lost sales overall. Which is a rounding error. But that doesn't fly with the industry mantra so gets ridiculed, ignored, and suppressed.

      There is now 20 years of these reports all saying the same thing. Piracy isn't the big evil they want it to be, and that there is more damage down by outdated business practices. In an era of $1 songs, $18 for a CD was the biggest turnoff.

      Today, the $1 song has won out, and physical sales are down to a bare minimum. Movies are going the same way with streaming, but the lesson wasn't learnt.

        Just what I was saying. There are also streaming services that are making money and people are spending *more* on those than they ever did on buying CDs. There was a study that suggests people were spending about $55 a year on CDs. Compare that to the annual cost of a streaming service.

        https://www.recode.net/2014/3/18/11624668/the-price-of-music

        And yeah bad business practises definitely damage profits. Awhile back I was buying CDs and listening them on my PC at work rather than the home stereo since that was where I was able to play them. I went through a batch of CDs at one point that flat out refused to play on the PC because they had some sort of DRM on them that broke the CD standard. So every single one of those CDs was a lost sale for the music company since I returned them. I think they might have been a label owned by Sony but it's a long time ago now so I'm not 100% positive.

    OK so not quite a slam dunk!
    The only negative link the report found was with major blockbuster films: "The results show a displacement rate of 40 per cent which means that for every ten recent top films watched illegally, four fewer films are consumed legally."

      I keep saying this, there are too many big movies. In the last 20 years the amount of movies Box Office Mojo have charted has more than doubled. In 1997 there were 303 releases, in 2017 there are *already* 468 and last year there were 736.

      Not saying everyone is going to try to watch every movie, but it's bad enough that there is often overlap of releases now. I've seen movies vanish from the cinema in a couple weeks because a new big release pops up to oust them because they're not making a lot of money. If you're on a budget you can't watch *every* movie so you pick one or two maybe planning to see the other one(s) later then they've been pushed out by the next big blockbuster so you don't get a chance.

      There's also the likelihood that people are boycotting movies in the cinema when they think look dodgy or get bad reviews/press (eg: Ghostbusters, Ghost in the Shell, TMNT2, etc) and watching a pirated version instead. Which also goes back to the too many movies issue, if there weren't so many movies on people might say "what the hell I'll try Ghostbusters" insead of watching a different movie in the cinema.

      So, even though there may be a lot of movies watching illegally it doesn't mean that there'd be more viewed if piracy wasn't a thing.

        Part of the problem is that its now very much an international game. A generation ago, all they really cared about was the US market, and anything else was gravy. Today, there are top 5 global movies that barely make a dollar in the US.

        Seriously, the 4th biggest movie in the world this year (wont stay top 5 but its Wolf Warrior 2 at the moment) has taken $870m globally, $861m of which was in China, $2.7m in the US. So the movies they track can often be merely because they have a token presence in the US.

        Doesn't really change your point (there ARE more big budget releases than ever), but there are reasons they track more movies these days. India releases a ridiculous number of movies that make chump change in the US, solely because there are a handful of cinemas catering to the Indian population living there.

        As for the quality angle, I'm guilty of that. I also have around 1500 movies and TV shows on disc, and am the sort of person that if I enjoyed it, I prefer to own the disc anyway. Might not get it until its on special a year later, but if I've watched it in full, I typically buy it eventually.

        I've also been to the cinemas more this year than any other year I remember.

          They actually track barely any foreign films so it doesn't sway the figures that much. It's just odd ones like Wolf Warrior 2. If you start taking into account Bollywood and HK movies the numbers just get ridiculous.

          You're right about the global market, the number of big releases that now have Chinese production logos at the start alongside the US ones has gone up dramatically. I just watched Kong, Baywatch and The Mummy and at least two had Chinese production logos (maybe all three).

          I only go to the cinema occasionally for a couple reasons. Firstly it's hard to coordinate friends and secondly depending on the cinema it costs way to much. The one my friends prefer is $19 for the movie + whatever you spend on drinks/snacks. It does have really comfy seats though :)

          Probably the most movies I saw in a year was a few years back when another friend got a big redundancy and took roughly a year off. We'd go the movies a lot more because we could go to cheap daily sessions and we both had plenty of spare time.

    In general, the results do not show robust statistical evidence of displacement of sales by online copyright infringements.

    And in other news, the sky is blue, water is wet and Vegemite is still tasty.

    The report found that illegal downloads and streams can actually boost legal sales of games

    Er, yeah. That's been known since the 1990s but why let prior history get in the way of a statement?

    The paper, "Movie Piracy and Displaced Sales in Europe", only mentioned the part of the Ecory report that highlights the relationship between piracy and blockbuster film lost sales, and excluded the other findings of the report. Additionally, the paper didn't even disclose that the cited information came from Ecory's study.

    Geez. If I did that back in the day, my paper would have been quickly rejected. Heck, it was even a rule that the current state of the art was kept in mind as one's paper was reviewed and used as a means to filter out submissions that basically just recited history without contributing to the field.

    I must have been either really unlucky or there are different rules for conferences us academics had to attend to.

      I'm not at all surprised though. It was a report for the Government who then cherry pick what they want.

      I did some stats for the QLD govt years ago on building industry changes and they used them to claim they'd done a wonderful job fixing problems. The press release was something like "In the 12 months since we've come to power industry costs have been reduced x%".

      Which was true, it's just that the current govt weren't the ones who caused that. The reality was all the changes had been implemented by the previous govt, but the new govt didn't let that stop them.

      Stats and reports can say anything you like, just as long as you quote them judiciously and never let the full report see the light of day.

        Which was true, it's just that the current govt weren't the ones who caused that. The reality was all the changes had been implemented by the previous govt, but the new govt didn't let that stop them.

        Doesn't surprise me. The opposite also happens. For example, Labor is quick to blame the Coalition for the budget problems but a lot of those same problems are the outcomes of Labor's actions.

        It's not just governments. Some in the public are just comfy in their own ignorance and will actively try to shout down anyone detailing the complete picture.

        But back to the topic at had. I'm not dense, I know politics is everywhere. Even in academia and when I found I was not going to get anywhere unless I played politics myself, I simply decided to leave quietly after tying up any remaining loose end with my research where I could.

          Definitely true, at the time (this was a long way back) it was a new Labor Govt who'd just replaced the Nationals in QLD. It was the first time I saw it happen and it really opened my eyes about the reality of politics and well, and large organisation really.

          The worst problem with politics in academia or work is you can be totally apolitical but get caught up in the "cleaning" that happens whenever there's a power change. Doesn't have to be govt power change, even a change of company director sparks changes. So frustrating to see people let go because they may have supported the previous management.

            Coming into this late, it also happened with the boat people claims of Abbott. When he claimed to have reduced the influx by X% a few months into his leadership, he conveniently forgot to mention that it was a result of policies that started in the July, before the 2013 election.

            As theres always a lag effect before you see the results, they started taking real effect in the September, around the time the Liberals got back in. Nice and convenient for Abbott at the time.

            Happens all the time, its the basis behind a lot of politics. Its all the other guys fault, until their policies work on your watch, then it was your great leadership.

          You had to bring anti-Labor remarks into the conversation. A lot of what is going wrong with prices today is directly because the Liberal PM John Howard, during a time of unprecedented economic growth, gave tax cuts to win votes instead of investing in a futures fund. He entered Australia into huge deals with the other countries which have turned out to be "bad" for Australia.

            You had to bring anti-Labor remarks into the conversation.

            No, a statement of the facts.

            A lot of what is going wrong with prices today is directly because the Liberal PM John Howard

            If they were so wrong, why didn't Labor take measures to correct them. As I just mentioned, when the complete picture is brought in some try to shout it down.

            And you happen to be one of them.

            Discussion over.

          You should stop talking, you're making yourself look stupid.

          The policies that set in motion a gradual deficit were ones put in place by the LNP prior to the LNP losing, through a series of tax cuts and fire sale of infrastructure that brought in revenue.

          Labor improved upon those changes to lessen the deficit but then had a GFC hit, and in order to guarantee job supply and security gave massive infrastructure projects fat wads of cash to get shit done.

          Labor have full right to blame the LNP for doubling the deficit, when it was the LNP that set it all in motion and then blocked any attempt by labor to structurally repair the problem.

          History proves that the LNP are not fiscally responsible nor the better economic managers that they claim to be.

    When will Village Roadshow and associates realize that it is not that people don't want to pay for media but it is that they make it so inconvenient to access that pirating is just easier.

      I think the holy grail here is that we all buy stuff directly from the Artists own web sites and cut out all the middle men. You search with Google and go straight to the source. None of this signing up to a third party service and buying it with their DRM so you can only play it via their apps.
      It's a lot easier with music but films are a lot bigger and harder to create. Crowdfunding is making it possible.
      http://www.highsnobiety.com/2016/02/24/10-crowdfunded-movies-you-simply-have-to-see/

        I bought one of the Caligulas Horse's CDs through Bandcamp. I thought it was a great way to do it. As far as I know more of they money actually went to the band than it would through JB or iTunes or whatever.

        I think every artist trying to sell stuff on their own site is unrealistic and not good for the consumer, and it's not "easy" for a new artist to set up. But having a few places like Bandcamp where they have greater control of their music sales is a good thing. Cut out the gouging and just have a bare bones sort of site which has good control over marketing and sales while taking just a small fee.

          What we can see is there is no need for traditional Advertising and record companies anymore. Yep Brandcamp is a great platform. There are lost of sites doing and excellent job of recommending music as well as ways to chat online and discover more. Along with new funding methods, new distribution methods there are lots of ways to get more dollars flowing to Artists and away from corporations.

            This might be ironic but I actually find a lot of new music through piracy sites. I look to see what people are going nuts over and that serves as my indicator whether it's worth checking out (when I don't already know the artist obviously). It's like a review site without all the waffle, the number of downloads equates to the rating.

            Oh and I don't mean I just go to the piracy site and download it. I go there find something that seems interesting then track it down on JB or Amazon.

    Sounds like
    "how can I try to justify theft today?"

    But hey, I know you won't take my word for it, but maybe you will one of the top respected legal blogs ever ... and the law statutes and definitions themselves?

    "My favorite part of Falkvinge’s post is where he claimed that we “should look in the nearest lawbook” since “in no book of laws on this entire planet are property laws (where stealing is defined) and copyright monopoly laws defined in the same section.” This claim is easily refuted. For example, Section 2319 of the U.S. Code, which defines “Criminal infringement of a copyright,” is found in Chapter 113 of Title 18, which is entitled “Stolen Property.”"

    http://www.copyhype.com/2013/09/why-copyright-infringement-is-theft/

    At least I don't try to pretend I'm holier-than-thou by handwaving my digital theft.

    Last edited 22/09/17 4:20 pm

      Sorry for confusion but i'm not advocating piracy. I belive that Artists should get paid more and there is no need for record companies. They don't make music better just force their artists on people and that's where all the profits go. Secondly as a family with Apple, Android and PC I find the current system a pain to use when we have downloads on one system that will not work on another. There is a better way I beleive.

        Actually a record company *should* help make the music better, it's just that they don't always and they seem to have gotten to a point where they believe it's all about them not the artists.

        After all some great works were influenced by the studios when they set up groups with particular engineers and producers to get the best out of them. And there are a number of boutique companies who actually work to pair up artists and work on albums (thinking Frontiers and Inside Out).

        Unfortunately, for every tale of success there seems to be more about the record companies screwing a group by deciding not to market them, or choosing a song as a single that the band didn't want or cheating them out of royalties...

    Reading all the comments above I agree with a lot of the sentiment about better delivery of the product, with better quality and DRM free etc etc.

    However, A corporation or content provider is well in their rights to release a product as they please. If that does not resonate with the individual then the individual simply does not purchase said product. This is where the problem with pirating, for me at least, is found. Too man people use the previous statement as justification for pirating. It is pretty simple, pirating is stealing and no amount of justifications or reasons will change that.

    I agree with most of the reasons for pirating but it doesn't make the act right.

    I don't think I impact the market in any way. For me its a case of, if i can't see it on free to air I'll download and watch it, if I can't download it I just won't see it at all.
    It's that simple.

    no surprise - the biggest increase in the sales of music ever occurred when Napster came out. No different really from the days when record producers *paid* radio stations to play their music as it exposed people who otherwise wouldn't have bought records to stuff they'd never otherwise have a chance to hear.

    Problem was the music execs patted themselves on the bag for the increased sales rather than crediting Napster - and then they got used not to the heightened volume of sales, but to the rate of increase- a stupid mistake. Markets saturate, but somehow their addled thinking (the mountains of coke they could now afford?) they thought the sales would increase exponentially .. and pouted when they didn't, then turned on not just Napster but their own customers - and thus it continues to this day.

    Calling people 'pirates' (a definition covered in the international trade agreement which clarifies pirates as folk who SELL copy-written material they do not own), roping governments into making copyright infringement a criminal offence, hounding people who actually increase their audience reeks of dim-witted management that's made some promised they can't keep floundering about trying to find scapegoats. If they stopped and thought about it, the more people exposed to the product the more consumers they'll get- if, and this is a big if.. if their product is worth buying. District 9 was a relatively low budget film that made a fckton of money - same too fr Deadpool .. quality product - money made. Their main effort should be to focus on quality rather than attacking their customer base.

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