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Are reports of rampant digital piracy overblown?

By | January 25, 2011, 3:01 PM PST

The music industry has long bemoaned file-sharing programs and web sites as gateways for rampant digital piracy.

Last week, the International Federation of the Phonographic Industry, an industry trade group, reported that profits from digital albums (including CDs) dropped 12 percent lower in the first half of 2009, and placed much of the blame squarely on the popularity of major P2P portals like the Pirate Bay.

“Mass piracy is continuing to hurt the industry,” IFPI Chief Executive John Kennedy said, warning that it also acted as a “disincentive for people to invest in the market.”

He called for more countries to adopt graduated response legislation - first warning people who are downloading illegally and then suspending their Internet connection if they fail to stop. Such legislation was passed last year in France, South Korea and Taiwan.

But seriously, why would anyone go through the trouble of ripping CDs and DVDs, tying up their bandwidth and risking a hefty fine or even imprisonment to pirate content? Are they simply trying to stick it to media producers? Or are they doing it out of a sense of altruism?

A study conducted by researchers at Carlos III University of Madrid in Spain, in collaboration with scientists at the IMDEA Networks Institute, the University of Oregon (USA) and the Technical University of Darmstadt (Germany), may give us a better picture of what motivates these cybercloaked figures who supply digital goods illegally.

The researchers looked at the behavior of the users responsible for the sharing of over 55,000 files on Mininova and The Pirate Bay, two popular sites frequented by people who use the popular BitTorrent application to illegally download files. Their analysis found that a surprisingly tiny percentage, about a hundred individual users, were responsible for two-thirds of the content made available and three-quarters of the downloads.

They also found that the file sharers tended to fall neatly into two distinct categories. There are the “fake publishers” or organizations that put up fake or malware-infected files to discourage piracy. Then there is another group comprised of a few of the worst offenders or “top publishers” who profit from making copy-right protected content available through BitTorrent. They earn revenue through online advertising and upgradable subscriptions for high-speed downloading of files.

In a summary of their findings, the researchers concluded that since BitTorrent’s popularity is tied to a small group of users who engage in illegal file-sharing for “economic benefits,” if the same users lost interest or simply disappeared, BitTorrent’s traffic would be “drastically reduced.”

So far, the industry’s continued calls for the straightforward approach of identifying and penalizing those who illegally file share has become a frustrating game of Whac-A-Mole, in which once a major offender is shut down, another pops up elsewhere. These findings suggest that a better strategy should involve going beyond just the usual suspects.

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Tuan C. Nguyen

About Tuan C. Nguyen

Tuan C. Nguyen was a contributing editor for SmartPlanet from 2011 to 2013.

Tuan C. Nguyen

Tuan C. Nguyen

Contributing Editor

Tuan C. Nguyen is a freelance science journalist based in New York City. He has written for the U.S. News and World Report, Fox News, MSNBC, ABC News, AOL, Yahoo! News and LiveScience. Formerly, he was reporter and producer for the technology section of ABCNews.com. He holds degrees from the University of California Los Angeles and the City University of New York's Graduate School of Journalism.

Follow him on Twitter.

Tuan C. Nguyen

Tuan C. Nguyen

Tuan C. Nguyen does not hold any investments in the technology companies he covers.

He writes for SmartPlanet and is not an employee of CBS.

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+1 Vote
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RE: Are reports of rampant digital piracy overblown?
Perhaps - is there a quality issue? By pandering to one group, has the music industry lost touch with the segment with money?

And ASCAP is greedy. I was working with a non-profit group. We had obtained the permission of the copyright owners to use their music without charge. We received a letter from ASCAP that said we still needed to pay their charges.
Posted by metaphysician
26th Jan 2011
+1 Vote
+ -
RE: Are reports of rampant digital piracy overblown?
Almost everyone I know freely copies their entire ipod library to their friends. As a musician, I highly dislike this trend! I often hear "I have that CD. I'll make you a copy." It is rampant, no doubt in my mind.
Posted by waltsyd
26th Jan 2011
+1 Vote
+ -
RE: Are reports of rampant digital piracy overblown?
The temptation of getting something of value for nothing is difficult to resist. When it comes to music, there has always been a disconnect between the money that the consumer pays for a recording & the money the artists get for making 1. I think that people would be more willing to pay for music if they knew that the artist is getting a fair share of the money. Are Mininova & Pirate Bay representative? There's lots of other file sharing sites.
Posted by hoodedswan
26th Jan 2011
+1 Vote
+ -
RE: Are reports of rampant digital piracy overblown?
Any surprises here? I think not. Let's see, a blank CD costs 50
cents, an artist probably gets about $1, yet the recorded CD costs
$13 - $20. Is it any wonder people make copies & trade MP3's?

The true breakdown of the costs of producing a music CD needs to
be fully disclosed, & we'll then see who is lying .... and laughing all
the way to the bank.
Posted by Starman35
26th Jan 2011
+1 Vote
+ -
RE: Are reports of rampant digital piracy overblown?
A 12% drop in sales has to be caused by piracy. The possibility that they don't write songs like they used to is far too awful to contemplate.
Posted by PassingWind
26th Jan 2011
+1 Vote
+ -
RE: Are reports of rampant digital piracy overblown?
Right from the get-go the music industry created a model that would completely rip off the consumers and make them FILTHY rich. People aren't willing to go along with that any more .. what a surprise. Just because you produce a hit CD doesn't make you worthy of $10+ million dollars in revenue.
Posted by kiwicreature
27th Jan 2011
+1 Vote
+ -
RE: Are reports of rampant digital piracy overblown?
A 12% drop during tough economic times for many of the worlds consumers...clearly piracy is at fault, it simply couldn't have anything to do with people cutting back on unnecessary entertainment costs, using the radio more, or accessing completely legal online music sources like Jamendo's free and open source music setup.

I typically do not buy CDs much anymore, I just listen to dedicated channels on my Sirius satellite radio, find good music (once again, legally) on Jamendo, or bring back songs I haven't heard in a long time from my existing collection of CDs.
Posted by luxsphinx@...
27th Jan 2011
0 Votes
+ -
Piracy?? Think about it?
Who complains the loudest? The rappers who deal drugs, beat and shoot people, and steal before becoming magically "born again". How do they rate the right to complain? Fortunately for the artists I like,I don't mind paying for a digital copy of music that is virus free. I wish more money did go to the artist directly but also believe the sharing done properly encourages you to listen to and buy a wider variety of music.
Posted by jeffer3@...
10th Feb 2012
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