February 28, 2019

It matters who pays the freight
The phenomenon of video game piracy looks very different in independent studies than in industry studies

Various entertainment industry trade and lobbyist groups, including the RIAA, MPAA, and ESA, have all spend boatloads of cash and plenty of time trying to make copyright infringement appear to be one of the biggest threats to the fabric of democracy since lying. And their campaign been largely successful, culminating in the U.S. with the Digital Millennium Copyright Act, which criminalized copyright infringement for the first time, and included a raft of draconian provisions which have been limiting competition, creativity, and innovation ever since.

As part of this campaign, these industry trade groups have paid for any number of "studies" over the years, all of which painted piracy as rampant, and the costs of piracy as enormous. Oddly, though, independent researchers have been studying the same phenomenon for years, and consistently reaching different conclusions. And today, we got another example of the way independence, and freedom from pressure by the lobbyists who are commissioning the study, result in profoundly different results.

As reported by Motherboard:
Study after study continues to show that the best approach to tackling internet piracy is to provide these would-be customers with high quality, low cost alternatives. For decades the entertainment industry has waged a scorched-earth assault on internet pirates. Usually this involves either filing mass lawsuits against these users, or in some instances trying to kick them off of the internet entirely. These efforts historically have not proven successful.
Throughout that time, data has consistently showcased how treating such users like irredeemable criminals may not be the smartest approach. For one, studies show that pirates are routinely among the biggest purchasers of legitimate content, and when you provide these users access to above-board options, they’ll usually take you up on the proposition.
That idea was again supported by a new study this week out of New Zealand first spotted by TorrentFreak. The study, paid for by telecom operator Vocus Group, surveyed a thousand New Zealanders last December, and found that while half of those polled say they’ve pirated content at some point in their lives, those numbers have dropped as legal streaming alternatives have flourished.
[...]
“In short, the reason people are moving away from piracy is that it’s simply more hassle than it’s worth,” says Vocus Group NZ executive Taryn Hamilton said in a statement.
Historically, the entertainment industry has attempted to frame pirates as freeloaders exclusively interested in getting everything for free. In reality, it’s wiser to view them as frustrated potential consumers who’d be happy to pay for content if it was more widely available, Hamilton noted.
“The research confirms something many internet pundits have long instinctively believed to be true: piracy isn’t driven by law-breakers, it’s driven by people who can’t easily or affordably get the content they want,” she said.
At this point, I'll point out that Vocus Group aren't some pro-piracy lobbying group: they're a telecom company, essentially the AUS/NZ equivalent of Comcast or Verizon. And the research they sponsored is far from the first to confirm this basic truth. Again, quoting from Motherboard's piece:
Studies from around the world consistently come to the same conclusion, says Annemarie Bridy, a University of Idaho law professor specializing in copyright.
Bridy pointed to a number of international, US, and EU studies that all show that users will quickly flock to above-board options when available. Especially given the potential privacy and security risks involved in downloading pirated content from dubious sources.
And yet, when the question of e.g. video game piracy comes up, it's always in the frame established by the ESA's researchers-for-hire. Piracy is assumed to be something that is enormously costly to gigantic corporations like EA and Activision-Blizzard, who routinely blame these "lost sales" when their games under-perform, rather than placing the blame where it belongs: on their own crappy product, which routinely comes in a baffling array of SKUs, contain less content than they used to, and come loaded with onerous free-to-play monetization schemes and burdensome DRM no matter how much the consumer has paid up front for the content.

The gigantic size of those corporations is entirely relevant to the discussion, too; the simple fact that these companies have been allowed to grow so large through mergers and acquisitions has led to a situation where competition in the video game industry is largely non-existent, with every publicly-traded publisher essentially doing exactly the same things, and charging exactly the same prices to consumers for products that are more or less interchangeable. Which leads us to another potential benefit of piracy: adding competition to an industry that desperately needs some.

Quoting again from Motherboard:
“Time and time again, studies and common sense have shown that piracy is the result of a failure in the marketplace to provide what consumers want, in terms of convenience, price and selection,” he noted. 
And while copyright infringement is often portrayed as a purely malignant activity, it’s not always that simple. Another recent study out of Indiana University found that piracy can sometimes act as another form of competition, forcing content creators and cable operators to offer more compelling, affordable services if they don’t want users flocking to illegal alternatives.
“Piracy injects “shadow competition” into an otherwise monopolistic market, and this threat of competition from piracy may give greater incentive for companies to innovate and invest in areas where piracy cannot easily imitate,” Indiana University researcher Antino Kim told Motherboard in an email.
“Ease of use, fast uninterrupted streaming, high definition pictures and sound, multiple language support, tailored services—are just a few example areas where companies can really outperform piracy and differentiate their products from pirated versions,” he noted.
And then there's also the simple fact that anti-piracy measures don't actually work. Even Denuvo, long the gold standard of DRM, can only prevent a game from being cracked for a few days: see recent examples like Metro: Exodus, and Mutant Year Zero. DRM just hurts paying customers, while barely slowing the pirates down.

Anti-piracy laws don't fare any better than anti-piracy tech, either, according to copyright expert and Techdirt co-founder Mike Masnick's 2015 study on the subject. Quoting again from Motherboard:
[The 2015 study] found that while piracy rates tend to dip slightly in the wake of more aggressive anti-piracy efforts like internet filters, the rate of copyright infringement quickly spikes again once users figure away around the restrictions.
“While Sweden introduced strict anti-piracy laws, the overall rates of piracy in Sweden remained mostly the same before and after that law—with piracy rates of TV actually increasing after the law,” he said. “Those rates only started decreasing years later, after Netflix entered the market.”
It's long past time for our laws to come back into alignment with the reality of content piracy. While the gigantic corporations involved would obviously prefer not to have to change their business practices, what they're doing isn't working, and tasking governments with investigating and prosecuting activities that most consumers don't see as morally wrong isn't the answer. Much like the War on Drugs, laws like the DMCA, or the EU's new Copyright Directive, turn otherwise law-abiding citizens into criminals in order to address a phenomenon which isn't causing widespread societal or economic harm, and we already know how that turns out.

Stop letting industry lobbyists write laws that benefit only them, to the detriment of nearly everyone else... and that really don't have all that much benefit for them, either.