New study says online piracy isn’t hurting entertainment industry

For years, the entertainment industry has argued that online piracy has devastated business for movies, music and gaming.

But a new policy brief from the London School of Economics and Political Science (LSE) says that not only does piracy not hurt the creative industry but it is actually helping.

Millions of people across the globe illegally access copyrighted material on a daily basis. The most common method of digital pirating is through torrent sites, which let an individual download and upload content through a peer-to-peer file-sharing system.

Individuals in the U.S. who are found guilty of violating digital piracy laws can face severe legal penalties, including a felony record, five years in prison and $250,000 in penalties.

In the briefing, authors Bart Cammaerts, Robin Mansell and Bingchun Meng call on governments to re-evaluate their antipiracy laws to include data from studies beyond those directly sponsored by the entertainment industry itself.

“Contrary to the industry claims, the music industry is not in terminal decline, but still holding ground and showing healthy profits. Revenues from digital sales, subscription services, streaming and live performances compensate for the decline in revenues from the sale of CDs or records,” Cammaerts said in report carried by the site TorrrentFreak.

In a separate story, TorrentFreak says that independent data actually suggests that those who pirate content are also more likely to spend their money on film, music and gaming content.

A June 2013 study found that roughly 45 percent of all Americans pirate copyrighted content on a regular basis, including 70 percent of those under 30.

In the LSE report’s key messages, the authors say that evidence does not back up claims that individual cases of copyright infringement are affecting entertainment industry revenues, that antipiracy laws around the world are not achieving their desired impacts and that governments should update their policies to include more evidence from a diverse set of sources.

“Despite the Motion Picture Association of America’s (MPAA) claim that online piracy is devastating the movie industry, Hollywood achieved record-breaking global box office revenues of $35 billion in 2012, a 6% increase over 2011,” the report states.

And while music sales have faced steeper declines in recent years, the authors say those numbers have largely been balanced out by increased sales in live performance and other outlets.

“The music industry may be stagnating, but the drastic decline in revenues warned of by the lobby associations of record labels is not in evidence,” the authors write.

Interestingly, in the same Columbia University study, which found that nearly half of all U.S. Internet users pirate copyrighted material, nearly half of those individuals say they would willingly pay a monthly fee for unlimited access to multimedia content.

And the LSE study authors say that is one possible solution for the entertainment industry going forward as a way to bridge the gap between content providers and consumers.

“Within the creative industries there is a variety of views on the best way to benefit from online sharing practices, and how to innovate to generate revenue streams in ways that do not fit within the existing copyright enforcement regime,” the authors conclude.

“When both [the creative industries and citizens] can exploit the full potential of the Internet, this will maximize innovative content creation for the benefit of all stakeholders.”