How Bad is Piracy? No One Knows.

Friday, April 23, 2010


The RIAA and MPAA often warn of the devastating economic effects of internet piracy. But a new government study says...not so fast. The Government Accountability Office found recently that it's impossible to quantify just how bad piracy is for the economy. Plus, they found there may even be some upside to internet piracy. CNET's Greg Sandoval explains why the GAO report is a big deal.

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Comments [12]

Pete from Vero Beach, FL

Piracy isn't bad for the economy. It's bad for the big entertainment companies, and it's not even clear how bad. If you stop someone from downloading 1000 DVDs that retail for $10 each, it doesn't mean that you created $10,000 worth of movie sales. Most likely, that person would watch more TV and maybe rent a couple of DVDs for a buck a piece.

And if someone truly had discretionary income and an interest in music, it's likely that much of the money saved by not buying music is spent at local venues, bolstering the local economy and local cultural scene.

That's not to say that it's right to pirate, but the point is that using the strong arm of government to impose harsh penalties on fans isn't in our collective best interest. It's in the best interest of the companies that have money to lobby and stand to profit.

Sep. 05 2010 09:08 PM
Andrei Mincov from

Critics of today's copyright laws often contend that instead of trying to control the use of their works through copyright, "old industries" must adopt "new business models" that would address the public's desire to have unlimited access to content and impracticality of copyright enforcement in the context of the Internet. Usually adoption of such new business models is offered as a remedy for the growing number of copyright infringements.

In my new article, Failed Business Models of the Past, Eh?, at (, I explain why adoption of new business models has nothing to do with abandonment of the underlying principle that the owner of copyright should be allowed to decide how its content is used. If a business decides to use their property in an inefficient manner, it is perfectly OK to let such a business fail. We should not "save" this business by stealing from it the property that we think it uses inefficiently.

May. 30 2010 04:43 PM
Bree Gassner from Colorado

With the amount of people illegally downloading anything (music, movies, games, etc.), with no regulation over the internet, there's absolutly no way to stop it. It sucks for the people losing money over this, but they need to find a different way to make money other than relying soley on their album or movie.

Apr. 28 2010 01:32 AM

Oh please. Even MSFT admitted in the early 90s that it smiled upon the spread of their pirated CDs in Asia in order to built up enough interest in their brand by government purchasing agents.

Apr. 27 2010 09:39 PM
Lauren Dominick

I'm not saying that piracy isn't bad, but when companies make pirated music, movies, ect. so easy to come by it's kind of hard to make it illegal. I do believe that this is a raising problem for our economy however. It is limiting jobs and other areas. It's harder for people to make money in the music and movie industry because piracy has become the norm.

Apr. 27 2010 07:52 PM
Marcel de Jong

well we are entering in a pioneering era, and not every new business model will work for every artist.
For some commission based music or films works best for Artist A, but perhaps scoring showings at local arthouses works best for Artist B.
Of course there will also be bigger budget movies, as the demand fo that will still exist, but it will perhaps have more product placement. Or perhaps better quality storytelling instead of just big explosions and special effects, that will draw people into the cinemas.

Apr. 27 2010 06:44 PM
David Dines from Boston

@Marcel, I listened and read the transcript, and it did not seem to me that Greg Sandoval was advocating the three strikes law, more outlining how it would work if we signed on to the treaty.

Your point about finding new business models is key. I believe that once they find a sustainable business model, it will help alleviate the problem. For instance, the iTunes store helps reduce piracy because the price is reasonable and it is easy. I would rather pay for the songs I want and support artists that I like than have to worry about the security risks of using P2P file sharing site.

Also, I agree with you that the threat of reprisals against customers is a bad way to solve the problem.

Apr. 27 2010 09:41 AM
Marcel de Jong

@Jack Perea, you could also make a case that piracy increases revenues for music and movies. Because money not spent on one disc, might be spent on another (or on something else entirely).
Piracy also serves as advertisement for the actual disc. "Oh I like this music, I will buy the CD as well to support the artist."

Apr. 27 2010 05:15 AM
Jackie Perea

I think piracy definately affects the amount of money that music and movies would make without it. However because movies and music still make money through non-piracy, the problem is not big enough to end. Because there are so many people that download music and movies for free, there really is no way to completely stop it. I think it does hurt the money that should be made for music and movies, but at this point its almost unpreventable.

Apr. 26 2010 10:51 PM
Marcel de Jong

I can't believe Greg Sandoval is for a three-strikes law.
It would be like having your postal service denied after three ACCUSATIONS of mailfraud.
Because that's about it, they don't have to prove it, just accuse you of piracy three times and that's bye bye internet.
And with all sorts of public services moving to the web, that'd be a bad idea.

Besides that, there are a number of artists who actually make a decent living, despite giving away their music. And not all of them are 'big acts' and not all of it is done by touring.
And some movie makers are trying out new monetization methods.

In fact the entire media industry could use some new business models.

Instead of criminalising their fans. they should connect to fans and offer them a reason to buy.

But hey, I'm just another consumer, I should have no rights, only duties, like paying a lot of money for crap movies. The only ones who deserve to have rights are Big Media Corporations. With copyrights lasting forever, etc. Right?!

Apr. 26 2010 05:03 PM

I think piracy would be very hard to pinpoint as far as how many people do it. It is so easy to do it that I think there are more people doing it than not. That doesnt make it right in anyway.

Apr. 26 2010 03:26 PM
Malcolm Johnson

I can believe that no one knows how bad piracy really is because I mean think about it, so many people do it. So as far as numbers go and trying to find out how it effects the sales of lets say a movie that just came out, impossible.

Apr. 25 2010 07:49 PM

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