French ‘Three Strikes’ Law Slashes Piracy, But Fails to Boost Sales

http://torrentfreak.com/french-three-strikes-law-slashes-piracy-but-fails-to-boost-sales-120330/

by jghefner • 14 years ago

98 56 14 years ago

This article is ridiculous. It has cherry picked statistics and misrepresented them. In 2011 digital downloads of music (through legitimate services, eg: itunes, spotify) GREW almost 20%(!!!).

The reason that the overall statistics show a drop is because of physical media being included and that has fallen a huge amount:

> Internet music growth was insufficient to offset falling sales of music on physical supports, down 11.5 percent to EUR 412 million, with the overall recorded music market falling by 3.9 percent in 2011.

If you ONLY consider the digital side:

> Download revenues grew by 18.4 percent compared to 2010. Streaming and subscriptions grew by 73 percent to EUR 39 million. Subscriptions services such as those from Spotify and Deezer grew by 89 percent to EUR 26 million.

http://www.telecompaper.com/news/french-online-music-worth-e...

So when the author says:

> So if piracy is down massively in France, one would expect that the revenues are soaring, right?

He is being deceitful. Revenues are soaring..., they're up almost 20% on 2010. If the aim of the three strike rule was to stop digital piracy and increase digital sales that is exactly what it has achieved, they've dropped piracy 50% and increased sales 20%. You can't include the physical media sales in the latter to make a point...

glesica• 14 years ago

I think you may have missed his point, he's actually saying the same thing you are.

He uses the total revenue metric because that is what the industry has been using in its lobbying and PR efforts for many years. The industry has claimed that the decrease in total revenue it has experienced is being driven entirely (or almost entirely) by piracy. If this were true, then the piracy reduction in France would lead to higher total revenue.

Since that has not been the case, the link between piracy and total revenue seems to have been overstated by the industry.

The author then suggests that the drop in total revenue has been caused by new, less profitable formats, which is exactly what you pointed out (with evidence), rather than piracy.

I agree that the headline and some of the language are a bit sensationalist, but the point of the article is valid and in agreement with your points.

twelvechairs• 14 years ago

I agree the article is one sided, but rather than your view I still think its a moot point. Internet sales grew 18.4%, whilst overall sales were down 3.9%. I'm not sure either of these figures are so far out of line with what is happening in other countries for either side to claim they say anything about the impacts of this law clearly.

paulsutter• 14 years ago

Excellent point - what's called for here is a real comparative study, and this new French law is an opportunity for that.

Unfortunately we're going to hear two diametrically opposite views, both "based on the numbers", neither shedding light on the subject.

nextparadigms• 14 years ago

It's also possible and likely that in 2011 iTunes sales grew because of the increased sales of iOS devices in France, not necessarily because piracy was replaced by more purchases.

Plus, they are only tracking bittorrent - which means that half of the piracy could've shifted to other methods, as soon as they learned about the P2P monitoring program.

bigiain• 14 years ago

You accuse this article of "being deceitful", when "the industry" claims $250_BILLION_ per year losses to piracy?

http://www.freakonomics.com/2012/01/12/how-much-do-music-and...

'In 2010, the Government Accountability Office released a report noting that these figures “cannot be substantiated or traced back to an underlying data source or methodology,” which is polite government-speak for “these figures were made up out of thin air.”'

I find it _very_ hard to find any sympathy for the music or film industries having numbers and statistics bent or misused against them. These people have been getting laws enacted based on numbers they've just made up - with _clearly_ no possible basis in fact. So this article has turned the tables. About time, in my opinion.

Fargren• 14 years ago

That's and ad hominem fallacy right there. The fact that the industry are making ridiculous numbers out of crappy statistics doesn't mean an argument that does the same thing is a justified argument against them. I think the point of the OP is very valid: the article looks at the wrong numbers, and it does it intentionally.

ticks• 14 years ago

Bear in mind, it's Torrent Freak. Most news sources are skewed one or another, those lot don't like the big copyright guys.

i_cannot_hack2• 14 years ago

Yes, the digital sales "GREW almost 20%(!!!)", as you enthusiastically put it. But you behave as if this is somehow extraordinary, and on top of it all automatically[0] assume that this is due to the reduction in piracy.

In UK digital sales grew by 27% in 2011 alone, and they have no similar laws.[1]

The truth is that the digital sales are increasing drastically all over the world, not just in France. This does not have anything to do with any reduction in piracy, but is due to a wider selection of products and more accessible market.

[0] http://en.wikipedia.org/wiki/Post_hoc_ergo_propter_hoc [1] http://www.bpi.co.uk/assets/files/music%20sales%20slip%20in%...

Silhouette• 14 years ago

In UK digital sales grew by 27% in 2011 alone, and they have no similar laws.

Actually, we do, primarily under the controversial Digital Economy Act that was pushed through just before the last general election.

The laws aren't widely applied yet in the way that they apparently have been in France, but there has been some fairly high profile threatening going on all the same.

In other words, while I'm certainly not equating the situation in the two countries and the seriousness or otherwise of the threat to pirates right now, it's probably not fair to totally discount the effect of anti-piracy rules in the UK either.

guard-of-terra10• 14 years ago

How does it work? I mean, every single torrent connection is encrypted today. How would they know that I'm seeding something copyrighted, not a windows swap file?

Zirro3• 14 years ago

They simply check which IPs are in a certain swarm, for a certain file. This is then reported to issue a strike against the connected IPs.

guard-of-terra10• 14 years ago

So they seed files themselves and if you're unlucky enough to download from their seed you're busted?

This would probably mean you're reasonably safe if you're downloading niche stuff; private trackers would also help?

truxs• 14 years ago

The biggest problem in France is the lake of legal offers for anything but music, and this won't change soon for several reasons:

-2€ for an episode of house, SD, for 48 hours, up to 5€ for a movie for 48 hours but still they are complaining about the situation and would like to change the prices up to 8€/SDmovie for 48h http://www.journaldugeek.com/2012/03/28/vod-des-fims-plus-ch...

-Legally you need to wait 3 years after the theater release to put a movie on vod. Why it won't change ? Because canal+ a private channel who broadcast movies only 10 month after their release is also the main financial contributor of french productions. http://www.numerama.com/magazine/22024-l-effort-minimal-de-c...

cabalamat• 14 years ago

Good. I hope the copyright industry doesn't gain a single penny because of Hadopi.

alan_cx• 14 years ago

Well, its all based on the idea that people who "illegally" download would have bought the item otherwise. Really not true. Mostly the reason is either convenience or lack of cash to buy in the first place.

I think of all the CD's I bought in the past which turned out to be garbage apart from the two singles released which are the reason for buying the CD. I think of all the DVD's I bought that I watched once. Now I don't have to waste my money. I can down load for free and buy a decent packaged copy if I deem it worthy of my money.

Thing is, I've been stitched up for years by these gits with terrible product, and I was getting back my wasted money. Now I purchase wisely because I can try it out first. I only buy what I personally feel is good product. I delete the garbage.

I suppose the media companies will require lots of their customers to be sued and jailed before any one in politics stands up to them and says, " no, you are wrong. You sales are down because your product is mostly rubbish, and sold in an inconvenient way. People are valuing your product as zero. Where they don't, they buy. "

What the media companies are concerned about is that they are losing the ability to con us with rubbish. What I think is good, is that the sales they now do have are probably better quality sales, and the people who did buy are happier with what they bought.

Said it before, but all that is happening here is that governments are for some reason trying to prop up failing business models. I dont understand why. If it were that the pace of technology threatened a clockwork clock company, then that company would be expected to either move on or go out of business. Some how, no so with the media companies. I assume that its to do with money, political funding and the usual democratic corruption.

Pah, could be wrong, but that's my current thinking.

J3L24045• 14 years ago

>People are valuing your product as zero. Where they don't, they buy.

No. The popular content is downloaded more. You can jump thru hoops and do backflips but the fact is people don't want to pay. Period. Everything else is justification.

zanny2• 14 years ago

Of course they don't want to buy, they recognize the cost of reproduction is zero. It is hard fact that once someone sets all the trillions of bits in a movie, game, operating system, or anything else we do, just ONCE, you can clone it for nothing as many times as you want.

Until we get off the distribution per unit model of retail we will have this war against consumers.

EvilTerran• 14 years ago

"The popular content is downloaded more"? What does that even mean? How are you measuring popularity?

... by units sold, say? Maybe the best-selling content is so because it's downloaded more, not vice-versa as you asserted. Or maybe there's a third factor that causes both. Correlation does not imply causation.

What of those who, as the GP said s/he does, download for free, then buy a copy if they actually like it?

If a product is of unknown quality, but known to be free to copy, it's sound economics to value it at zero. Supply is infinite and demand is indeterminate. Once you know more about it, and know how much you want it, you may want to pay for it. Or you may not, if you don't like it or are a cheapskate. C'est la vie.

It's more likely than you'd think: http://www.guardian.co.uk/music/2009/apr/21/study-finds-pira...

antninja• 14 years ago

Consumers don't want to pay at the vendors' price and vendors don't want to sell at the consumers' price. The market is blocked.

(20 euros for 90 minutes of entertainment is a bit high)

Retric• 14 years ago

Downloads say nothing about how much people liked the content because for in the vast majority of cases they have not seen it before they download. It's mostly a question of how much advertising something had, with quality only having knock on effects down the line.

s8qnze982y• 14 years ago

> the fact is people don't want to pay. Period. Everything else is justification.

This is a false and very cheap thought. For two reasons:

1) there isn't a thing such as "[all the] people". I know many people who don't want to pay, and I know many people who want to pay. you can't really prove even that most of the people belongs to the first category.

2) even if we assumed that "people don't want to pay", this wouldn't explain the examples of mainstream products that have been (successfully) sold by donation, which shows that there is a sufficient (at the very least) people that does want to pay. a couple of examples are radiohead and a comedian whose name I forgot, but also many others.

Androsynth3• 14 years ago

Convenience. If you think that's not a relevant reason you're just being pig-headed.

I pay for netflix and Amazon Prime. In fact I would pay 2-3x more for netflix if they had everything. (Not even new stuff, but old stuff)

I don't buy dvd's because the value is not there for me. If I am just going to watch something once or twice, its worth ~$1 to me, not $20 like a new dvd.

I don't go down to blockbuster/Red Box because the negative utility of getting in my car and going to a store is worse than just downloading it.

guard-of-terra10• 14 years ago

"I think of all the CD's I bought in the past which turned out to be garbage apart from the two singles released which are the reason for buying the CD."

I always wonder why do people buy that stuff.

I mean, you can figure out whether a band or artist is serious at what they do. It's your duty as a music fan.

So it is you who buys the suboptimal product, it is you who sponsors one trick ponies and rip offs, who gives them competitive advantage against the deep, real musicians.

waterlesscloud6• 14 years ago

Of course, the point of laws and law enforcement is to cut crime, which this did.

tomp• 14 years ago

When 3% of society are criminals, you pass more laws in hope to stop the crimes.

When 30% of the society are criminals, your laws are wrong.

tsotha2• 14 years ago

No, the point of laws is not to cut crime. The point of a law is reduce socially damaging behavior.

What is the point of this law?

waterlesscloud6• 14 years ago

To reduce socially damaging behavior.

It is anti-social to attempt to benefit from the work of others without compensating them.

mikeash2• 14 years ago

That's foolish. If the only point of laws was to cut crime, you could trivially reduce crime to zero by legalizing everything. Clearly that is not the point.

waterlesscloud6• 14 years ago

It's a law intended to help reduce violations of another law.

It has succeeded in doing so.

sek• 14 years ago

The reason why the Entertainment industry loses so much was never just piracy, the majority are the alternatives that are available on the internet. All this time people spend on Soundcloud and Facebook has to come somewhere. A YouTube catvideo replaces time people can spend on TV or hearing their favorite artist.

They all have a MBA who are in charge these entertainment companies, they should have heard of http://en.wikipedia.org/wiki/Porter_five_forces_analysis Substitute goods everywhere and you gonna have a difficult time, but blaming someone else is probably just easier.

French ‘Three Strikes’ Law Slashes Piracy, But Fails to Boost Sales

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