I want *YOU* to scold me.

I like conversations. They’re one of the ways ideas and observations are exchanged.

Ok, well… then you can start by watching the interview with Neil Gaiman I linked to above who is wise enough to understand increased sales when he sees them.

From Free Culture (CC BY-NC 2.0 Lawrence Lessig):

File sharers share different kinds of content. We can divide these different kinds into four types.

A. There are some who use sharing networks as substitutes for purchasing content. Thus, when a new Madonna CD is released, rather than buying the CD, these users simply take it. We might quibble about whether everyone who takes it would actually have bought it if sharing didn’t make it available for free. Most probably wouldn’t have, but clearly there are some who would. The latter are the target of category A: users who download instead of purchasing.

B. There are some who use sharing networks to sample music before purchasing it. Thus, a friend sends another friend an MP3 of an artist he’s not heard of. The other friend then buys CDs by that artist. This is a kind of targeted advertising, quite likely to succeed. If the friend recommending the album gains nothing from a bad recommendation, then one could expect that the recommendations will actually be quite good. The net effect of this sharing could increase the quantity of music purchased.

C. There are many who use sharing networks to get access to copyrighted content that is no longer sold or that they would not have purchased because the transaction costs off the Net are too high. This use of sharing networks is among the most rewarding for many. Songs that were part of your childhood but have long vanished from the marketplace magically appear again on the network. (One friend told me that when she discovered Napster, she spent a solid weekend “recalling” old songs. She was astonished at the range and mix of content that was available.) For content not sold, this is still technically a violation of copyright, though because the copyright owner is not selling the content anymore, the economic harm is zero—the same harm that occurs when I sell my collection of 1960s 45-rpm records to a local collector.

D. Finally, there are many who use sharing networks to get access to content that is not copyrighted or that the copyright owner wants to give away.

The question, Lessig concludes, is whether A has a greater financial impact than B. (Which is itself a simplification, but it’ll do for now.) Evidently, the Swiss government has concluded that it does not.

No, it is exactly like making a loaf of bread appear out of thin air. A miracle, I would say. We can perform miracles at will and people somehow equate this with “stealing”.
Strange.

La part du revenu disponible dépensée par les consommateurs et consommatrices dans ce domaine reste stable. On observe cependant des transferts au sein de ce budget. Ainsi, les utilisateurs et utilisatrices de sites de partage continuent d’investir dans le secteur du divertissement les économies qu’ils réalisent en téléchargeant des contenus sur Internet, mais au lieu d’acheter des CD et des DVD, ils s’offrent des billets de concert et de cinéma et des produits de merchandising.

An approximate translation is

The share of disposable income spent by consumers in this [Entertainment Industry] sector remains stable. The savings made by filesharers continue to be invested in the entertainment sector but instead of buying CDs and DVDs, they purchaced concert and cinema tickets and merchandising.

It is strange that you didnt notice this as it was summarized both in Cory’s post and in the article he linked to while, in the report itself, this quote was taken from the paragraph above the one discussing “foreign” entertainment businesses which you quoted.

I like conversations. They’re one of the ways ideas and observations are exchanged.

I have a very difficult time intuitively believing that piracy costs the entertainment industry nothing. I’m not sure the Swiss study claims this, and I’m positive that the Dutch study it’s derived from doesn’t at all.

I was only able to locate the Dutch study in it’s original Dutch. I don’t read Dutch, but Google translate helped me slog through the 140 page study. Google would have me read

“Uit het onderzoek blijkt dat de economische effecten van file sharing op de Nederlandse welvaart op de korte en de lange termijn sterk positief zijn. Consumenten krijgen als gevolg van file sharing toegang tot een breed scala aan cultuurproducten. Dit heeft een welvaartsverhogend effect. Daar staat tegenover dat een daling van de omzet uit de verkoop van geluidsdragers, dvd’s en games als gevolg daarvan aannemelikjk is.”

as

“The study shows that the economic effects of file sharing on the Dutch prosperity in the short and long term are strongly positive. Consumers receive a result of file sharing access to a wide range of cultural products. This has a welfare enhancing. Conversely, a decline in revenue from the sales of sound recordings, DVDs and games as a result is plausible.”

Here’s a consoling notion: The direct contradiction with the premise you’ve put forward (whether as your own or as a fun piece of conjecture, I’m uncertain) isn’t the most interesting bit of the study by a long shot.

The Swiss and the Dutch are both fairly pointed in their criticism of the tenants put forward by the (pointedly described as “foreign”) entertainment businesses who they recognize as having lobbied for stricter copyright laws in the face of their claims of diminished revenues… of decidedly uncertain volume. Apparently, they’re unphased by industry premise that, although only one in zillion pirates is caught, penalizing the few they manage to rustle up at a zillionfold the damage they induce should be sufficient deterrent to ameliorate their losses. Specifically, both governments have been pretty direct in their reply that their copyright law need not change.

They also go on to scold the entertainment industry for failing to leverage new technology quickly enough to keep up with their consumers changing consumption habits. The Dutch are pretty explicit in their observation that consumers have had a pretty difficult time finding legitimate means of exercising the behaviors that piracy allows them to exercise (day one release, DRM free, from almost anywhere).

Better still, the Dutch offer some helpful advice on how price discrimination for luxury goods typically functions. In brief, you tend to sell more units of a thing that’s offered at a lesser price. If maximization of revenues is a given publisher’s foremost objective, then they mustn’t allow themselves to be married to a given unit price out of pride.

What I take from the Dutch study (or the translation I’m able to read) is more or less in line with where I land on the whole issue:

1. The entertainment industry can’t afford good piracy enforcement, and pushing legislation to have punishment outmatch crime on the level that’s been requested is just silly nonsense. It’s unjust, and it’s bad business.

2. The problem of piracy is, in some cases, a function of a gap in customer service. Pirates are able to enjoy a superior ware delivered in vastly superior time, and those facts make inferior-but-legitimately-available goods less attractive. Rewarding your customers demand for DRM free wares available on day one might be a good way to recapture your customer’s interest.

3. Charging less per unit, particularly when competing against a free product of superior quality, might be a reasonable alternative and might promote deeper consumption of units by individuals.

I have a hard time believing piracy isn’t somewhat destructive, and I’m not finding agreement with the premise from studies the post cites, either.

But.

I think the majority of pugilistic piracy mitigation approaches I’ve seen, particularly from music publishers, are entrenching pirates behavior and widening the gap between the legitimate demands of entertainment consumers and entertainment creators, and illustrate a refusal to acknowledge the core notion that people who consume media… even and maybe especially pirates… are ultimately customers who should be treated as such.

Well.

No. Nor was it ever.

Are you suggesting that we should outlaw certain technologies just so that you can keep your job?  If so, would you be willing to ditch your refrigerator to give my door-to-door ice block delivery service a little boost?  Business has been pretty bad ever since the 1950′s.

That is no longer a fact.

The question becomes why should any law-making bodies pass or amend laws specifically to prop up obsolete business plans?  This is sometimes called “rent seeking” and it’s widely regarded as “corruption” when enshrined in law as a result of a massive “lobbying” effort.

This is ignoring the fact that music labels are already extremely exploitative to the point that many (perhaps most) musicians with major label contracts already make all their money from live performances and end up paying the label for the privilege of making a record.

Uhh. We’re in the middle of a major recession.

Note that nobody is saying that consumer budgets don’t change, ever. Obviously they do. 

But at any given instant – or over, say, a given month – Susie Everyone has a pretty fixed amount of money she’s willing to spend on ‘fluff’ like movies or video games or indie rock t-shirts. Over the long term, that amount varies. But over the short term, spending $8 on a movie ticket now means she’ll probably notice later that she’s $8 light and decide to skip that paperback from Amazon.

Netflix exist and Redbox are becoming more popular:

Note that that data appears to be exclusively about home movies. Not entertainment as a whole.

(Even the BLS data is less than clear cut: buying a new shirt to go out to a club is probably somewhat interchangeable with “entertainment” consumer budget wise, but overlaps with at least two other categories.)

“Regardless, none of this…NONE of it justifies downloading for free.”

The thing is, I don’t at all concede that this is a concept that needs to be “justified”.

The *natural* state of digital data is “easy to copy and share”. And the *goal* of copyright policy is ultimately to maximize the quantity and *availability to the public* of creative works.

An internet full of easily share-able digital work is pretty darn available if you ask me.

Now, *some* level of copyright and/or other type of regulation (like a download tax) *might* be necessary in order to stimulate the initial production of certain kinds of new works. But that should obviously interfere with the ability of people to share and enjoy works *as little as possible*. 

In my view, it is YOU who needs to justify maximalist copyright as the optimal policy solution here.  The evidence appears to be against you.

Games are easy to demo.  The only valid reason you have for stealing a full version of a game with a demo, is that the full version is not available for purchase anymore.

Music can be demoed easily, too.  It’s just that most vendors don’t know how to do it effectively – either they play only the 10-30sec  intro of song, no matter the track length; or they overshoot and make the whole file available to audition in some streaming format, hoping that most people aren’t savvy enough to record their sound card output & save a brand new copy.  The trick to properly demoing music is to either set forced fast-forward points of 20-30 seconds at a time, or overdub the track with a disclaimer.  A more important factor is the ability to make as much music available as possible – to suit anyones tastes, so that they only need one service for downloading any music they want.

Movie trailers are essentially demos of movies.   They are usually enough to make me not want to see the movie, before I’ve had to waste either $10 on a ticket, or waste an hour or so locating a decent copy online.  If I do want to see a movie, I have no problems waiting for it to be available on cable or netflix.  
But yeah, when your movie’s trailer doesn’t even motivate people to watch it for free, nor even a year later at a highly reduced price, you need to just start making better movies, and stop suing your audience for protecting themselves against losing their money to bad entertainment presented by predatory marketing. 
The best reason for downloading a film or ripping the DVD, is, yet again, accessibility.  If I want to have a small library of films on the go, that requires no additional hardware to view with friends other than a TV and RCA cable, I can just load those movies to my DRM-free portable media player.   I can’t bring a stack of DVDs everywhere easily, nor does everyone have a DVD player in their vehicle, or even hooked up to their TV at home.  But almost everyone has RCA/aux jacks.

That would be true if entertainment spending stayed the same or increased year over year.  But in the last 3 years, entertainment spending has dropped significantly:

http://www.bls.gov/news.release/cesan.nr0.htm

We’re starting to see a recovery now that sites like Netflix exist and Redbox are becoming more popular:

http://www.imozidvdkiosk.com/deg-q3-home-entertainment-spending-up-5/

So, statistical data exists that doesnt support your theory that people still spend the same for entertainment year over year.  Regardless, none of this…NONE of it justifies downloading for free.

But you need to distinguish between artists and regular people working for Disney, people working for major film studios, people working in the film/video/animation industry, and people writing books, or video games, or playing guitar, or piloting cruise boats. 

They are not interchangeable. 

The point of the “lump of entertainment budget” studies is that money not spent by consumers on one thing ends up spent in another. Your “lost” sales are someone else’s gain.

*And vice versa*.

It is possible that the management of Disney believes that the Draconian copyright regime they lobby for will be a useful tool against their competitors in other entertainment media. It’s even possible that they’re right.

But you need to be honest about what that is: it’s one particular industry engaging in government rent seeking to the disadvantage of competitors.

IF that policy is successful, and you net a few more people to buy the latest Disney DVD over their other options, that’s $X in your pocket that you “stole” straight out of the pocket of some other ‘regular ol’ people’ artist (maybe an author, or a music recording engineer, or a museum tour guide, or an indie animator).

You understandably want your medium and your employer – and you – to get that money instead of the other guys, but that still means the other guys don’t get it.

And at the same time, consumers at large lose out: in the alternate world where those users who were happy with a downloaded movie could do so, they got to enjoy a movie AND give some money to the author or engineer or whatever. 

Theoretically, at least in the US system, that describes a situation which is more in line with the underlying goal of copyright: to maximize the amount of creative work that’s available to the public. 

The goal is NOT to favor or maximize the profit of a particular artist, firm or industry. It’s ultimately to provide everyone with everything produced – for free. That’s why copyright (used to) expire. And it’s why workable compromises on sharing for personal use or the like are almost certainly a much better plan for the public than the maximalist aspirations of certain incumbent media firms.

Of course.  But it sure represents SOME lost sales, even if  that figure is hard to pin down.  Point being, it does affect artists and regular ‘ol people, and I think that side should be represented in this discussion.  The artists and filmmakers are still working hard to make the best films we can make, and people are still fans of the films, but now that just doesnt equate to home video sales like it used to.  People used to buy DVDs.  Now they just download them.

Thing is, your argument states that studios need to allow free sampling to discover their work.  I’m pretty sure everyone in the civilized world is aware of major blockbusters.  And they love them.  It isnt a matter of quality or exposure at all.  That’s a total farce.  And if you want a sample of their work, a trailer exists for every film on the planet, and thousands of film review sites exist to steer you to the good ones.  If you dont like the film after you watch it, that sucks.  Theres lots of products I buy that I end up not liking.  Caveat emptor.  But that doesnt mean you get your money back.  The notion that somehow the consumer “deserves” the best possible experience from a product sounds spoiled. 

I dont buy the “I can only decide if I like your stuff if I get to download the whole thing for free first” argument.  It just reeks of excuses for watching without paying.  If no trailers or film review sites existed, I could buy it, but that’s simply not the case.

And people are discerning of their spending, but not as finite as your argument implies.  If anything this debt crisis has taught us, it’s that self-control for spending on luxury goods like media is almost non-existent.  If theres something people want, and they cant download it, they buy it.

Thier product in this case, iTunes, is just another centrally-controlled Cloud service that dictates how, when, with whom, and for how long you can use what you bought agreed to lease. It’s an empty hat.

I can understand the aggravation and I doubt the twine shall ever really meet. However others have said it better than I likely ever will. Most pirated downloads do not represent lost sales. They represent people that wouldn’t have bought anyway.

How about the industry (your choice here on which) funnle some of the money away from buying lawmakers, coming up with campy crappy updates to Reefer Madness and instead invest it in customer appreciation?

Replace the ‘you are a downloading scumbag baby eating pirate and we’re telling you to stop unscippable messages with ones thanking the customer for buying rather than downloading. Try getting your content spread through diff pay services that are platform agnostic and while i can understand some form of token lock to keep someone from casually running off copy aftrer copy after copy don’t make it to the point where if say… you want to make a backup on a flash drive in case your hardrive fails/gets reformatted/you want to try a different linux flavor (or the windows 8 beta, or whatever.) it won’t cause you to be unable to access the content you paid for.In short, stop assuming customers are criminals please. It makes my wallet want to go somewhere else.

That sounds like exactly the same bad reasoning used by label and studio execs, and it’s just as bad even when it comes from someone without a fancy car.  X million units of downloads is emphatically not equivalent to X million lost ticket sales. 

As the mentioned studies show, some much smaller portion of the people who downloaded *might* have purchased a ticket if downloading was not an option, BUT then a roughly equal number of people who DID buy a ticket from you might instead choose to spend their finite money on a video game, a music CD or a movie from another studio. (For example, the people who discovered or became fans of Disney products thanks to “pirating”, but, in our alternate universe, have instead drifted somewhere else.)  

On average, every dollar spent on one entertainment product comes at the expense of another dollar that might have been spent on some other diversion, possibly in an entirely different medium. 

What Disney and every other studio and entertainment producer needs to do is compete to produce a more compelling reason for people to spend their money with them rather than other artists and producers. 

And that’s *exactly as true* regardless of whether we call in the FBI, enact Draconian copyright/censorship statutes, and otherwise clamp down on the millions of people sharing, sampling and enjoying media and culture they otherwise wouldn’t be able to. Either way, you’re not competing with the people and fans discovering and sharing your work, you’re competing with other entertainment producers.