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Yes, North American movie theatre attendance slipped 3.9 per cent last year, but you could blame that just as easily on the movies (Larry Crowne, anyone?) as on pirates. (iStockphoto)
Yes, North American movie theatre attendance slipped 3.9 per cent last year, but you could blame that just as easily on the movies (Larry Crowne, anyone?) as on pirates. (iStockphoto)

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Piracy: Question of harm depends on who’s sharing data Add to ...

Might piracy be a force for good?

If you ask executives in the content industries – music, film, TV, software, video games, etc. – they’ll insist that widespread sharing of intellectual property is severely harmful. The Motion Picture Association of America reported last year that the U.S. economy loses $58-billion (U.S.) annually to all manner of “copyright theft.”

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As anecdotal evidence, it pointed to the fact that 9.4 million people around the world had watched the Oscar-nominated drama 127 Hours in cinemas but, up until August, 2011, “6.6 million illegal downloads [of the movie] occurred on BitTorrent” and other so-called peer-to-peer/Torrent services. The Recording Industry Association of America says music industry sales have dropped 53 per cent since 1999, when Napster first came on the scene: to just $7-billion last year from $14.6-billion.

This week, though, a large pin floated over from Europe to pop the MPAA’s bubble, when a pair of researchers issued a brief report suggesting that piracy might actually help some movies at the box office.

Using revenue numbers that followed the January, 2012 shutdown of the notorious file-sharing site Megaupload.com, the researchers – a PhD candidate at the University of Munich and a post-doctoral research fellow at the Copenhagen Business School – said that, contrary to conventional wisdom, non-blockbusters appeared to be helped by piracy.

That’s because, “file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay, to users with high willingness to pay.” (There was a big asterisk: Judging by the increased box office for blockbusters after the shutdown of Megaupload, the report said, high-profile pictures were probably hurt by piracy.) Fans of file-sharing, who resist the idea that they hurt the ones they love when they illegally download their favourite music or movies, seized on the paper as proof that they are actually doing God’s work when they share content.

In its Pollyanna take on illegal activity, the paper echoed a report last month by a public affairs forum at Columbia University, which found that people who share music online also buy it in significantly higher volumes than non-sharers. Pointing to data from the United States and Germany, it declared: “The biggest music pirates are also the biggest spenders on recorded music.”

That proved to be the equivalent of a Rorschach blot. Members of the Torrent community said it proved that sharing led to purchasing; but an analyst with the NPD Group research firm quietly insisted it “is not a measure of causality. Nowhere do these data speak to whether P2P [peer-to-peer] leads to music discovery and purchasing or whether it is a substitute for buying. It does not mean that P2P users would spend more if P2P did not exist.”

But, wait a minute: You just bought two albums on iTunes after hearing a couple of songs on CBC Music! That proves sampling works, right? Perhaps. But I could also tell you about a co-worker, a big music fan, who didn’t buy an album for more than half a year after the streaming service Rdio – which allows him to program his own custom-stream of music for 10 bucks a month – arrived in Canada last year. (And no, he also didn’t go to more live shows or buy more T-shirts of the bands he was streaming.)

The difficulty in proving either theory is that legitimate data are impossible to obtain: You can’t control a live environment.

So when the MPAA claims that people watch billions of dollars worth of pirated movies each year, it has no way of knowing whether those viewers would have been willing to pay to watch those same movies in a theatre.

Yes, North American movie theatre attendance slipped 3.9 per cent last year, but you could blame that just as easily on the movies (Larry Crowne, anyone?) as on pirates.

Even the European researchers quickly walked back on their pronouncements after their paper caught fire this week.

“Our study is still at a relatively early stage and we are open to an informed discussion,” they said in a statement they rushed out on Wednesday. “We are currently working on a full version of the paper, which will then be submitted to the scientific review process.”

That’s the sort of statement that makes any academic cringe: Why release a paper on such a hot-button issue before submitting it to the rigour of peer review?

Sharing music or movies or video games might or might not be a good thing; the jury is still out. But sharing half-baked science doesn’t help the conversation at all.

Follow on Twitter: @simonhoupt

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