Examining the substitution rate for pirated content
Although I've written a lot about piracy, I've dialed back a fair amount the last couple of years. We have stopped collecting primary data on the instance or impact of piracy, diminishing the value of what I might report, and the arguments at this point are pretty much fully played out.
I'm tempted to break my silence whenever people invoke straw men or offer a particularly ironic attack on piracy. Last week, filmmaker Harvey Weinstein did both.
In a speech given at the London Film Festival, Weinstein claimed that "One of the great problems that our industry faces is piracy and piracy on the internet." He went on to laud France for its "three-strikes" piracy law:
"One country corrected it and that country is France. Sarkozy, whatever you think of him, passed the toughest anti-piracy law in the world. If an internet company steals from someone who produces content, they shut them down. Then they try them. My kind of justice. Like in the old movie, “Hang ‘em first, talk about it later.” Especially those guys."
Of course, the law doesn't shut down companies; it takes internet access away from teenagers found guilty of accessing pirated content:
"They know that if you steal content and are a 16 year-old kid, you’re shut down. They just take your internet away. I love it. You have to fight to get it back. It’s not that you have to go to trial and hire some fancy lawyer in, say, five years. They just shut you down and then you hire the fancy lawyer so it really gets expensive and you’re losing while you’re fighting the case so people are disincentivised to steal."
As evidence, Weinstein cites film production in France: "You have a robust local French cinema that turns out many local hits. 260 French movies were made last year because the threat of stealing the content was no longer there."
So I went looking for some historical information on how many movies were produced in France before the law that Weinstein admires was passed in 2009. According to the UNESCO Institute for Statistics, French movie production ranged from 203 to 240 new movies a year between 2005 and 2009:
- 2005: 240
- 2006: 203
- 2007: 228
- 2008: 240
- 2009: 230
Although it is not the same source, I was able to find a number for 2010, as well: 261 films were released that year, according to a report from La Tribune. The methodology appears to be the same as the source for the UNESCO data.
On its face, one might conclude that the presence of the "three-strikes" law provided an incentive for French filmmakers to make more films. That conclusion ignores at least two other points of data. First of these: the law was passed in October 2009, long after most of the films released in 2010 were funded and underway.
Second: while there is evidence that the three-strikes law reduced piracy, the reduction in piracy coincided with a 3.9% decline in box-office returns in 2011. That is, the law appears to have reduced the instance of piracy, but as it did so, it suggested that the impact of piracy is closer to zero, at least in the French film business.
So much for the straw man.
Then there's the irony. Weinstein used part of his remarks to lament the consolidation of the media business:
"More and more we see these giant companies buying other TV companies. This company buys that company and that company, and when you think there’s a 500 channel universe, you realise it’ll be six companies that will own all 500 channels. What good does that do?"
Weinstein goes on to say:
"Today, giant corporations control these networks and as a result everybody has to play it safe. There is no such thing as the mavericks anymore. It’s just snuffed out by bigger and bigger companies. The mavericks are always the ones that lead us and I think lead us in a better way."
It's hard to argue against the idea that innovation occurs at the margin of a lot of industries, sometimes completely outside it. It's also hard to imagine that movie-making would be better off without the support that the Weinsteins have given to some innovative projects.
It just struck me as ironic that the people Weinstein wants to target are teenagers with a budding love of cinema. He was one once, at a time when finding those films was all but impossible. New technologies enable much more discovery and access, something the old reality has yet to embrace.
A footnote: The power that copyright owners continue to hold might be easily divined in Pearson's successful efforts to delete a 279-word teacher post that it claimed was worth $120. In response, a server company turned off access to 1.5 million teacher and student blogs.