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Yes, Piracy Costs Content Creators a Fistful of Dollars

A month ago, I examined the academic literature surrounding what turns out to be a very tricky question for empirical researchers to answer—does digital theft of music and film have a measurable negative impact on profits for content creators? Methodologies addressing the question are fraught with complications, and while the majority of papers surveyed in a recent review of the literature (Hardy et al.) find that online piracy is not, in fact, a victimless crime, some past studies remain inconclusive. The literature is sometimes inconclusive because it is very difficult to prove that content being stolen has a negative impact on revenue in an era in which almost all digital content is stolen to some degree. However, research of late has been clearer in identifying significant causal impacts of piracy on profits and content creation in the music and film industries. As academics hone in on the question, results are beginning to coalesce around exactly the answer you would expect—online piracy has a negative impact on revenue and content creation in both music and film.

(First, I should note that as literature reviews go, Hardy et al. actually

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The True Damages of Online Piracy? It’s Hard to Measure

It doesn’t take a rocket scientist to realize that online piracy is detrimental to content creators, including in the film and music industries. However, academics studying the effects appear to be behind the curve. A few studies, brandished by illegal content providers to perpetuate the myth that content theft is a ‘victimless crime,’ claim to show that illegal downloads actually contribute to industry profits.

In theory, pirates are additional viewers who could purchase merchandise or generate word-of-mouth advertising that could get others to legally view the content. If the good outweighs the bad, then piracy might actually be helping the content industry. Leaving aside the issue of morality of theft, given the scale of online piracy, it’s hard to imagine the good truly outweighing the bad. Yet there are data-driven studies by real academics insisting that digital piracy is a boon for content creators.

However, a new meta-analysis of literature examining the effects of online-piracy, Friends or Foe? A Meta-Analysis of the Link Between “Online Piracy” and Sales of Cultural Goods by Wojciech Hardy, Michal Krawczyk, and Joanna Tyrowicz, shows that these papers finding that digital piracy does not have

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