Online Piracy: Economy Boost or Kill?

Being a hopeless movie and tv show addict myself, I know how hard it is to wait for a new film. Especially because I live in Germany, where every release is delayed by months, or in the case of tv shows, even years (Modern Family has just started being aired this year!). Pages like tv-links, movie2k or sidereel then sound incredibly tempting – of course I’ve only heard about them from other people.

Users usually only want to enjoy a movie, but with politics being more and more involved, it’s reasonable to think about what impact it actually has on the film industry. In the USA, with bills like the SOPA (Stop Online Piracy Act) and PIPA (Protect IP Act), the fight against online piracy has reached a new peak. They want to force servers to block access to sites that offer online streaming as well as to introduce higher penalties for users, including prison. In Germany on the other hand, the Pirate Party, which promotes free online streaming, has entered four German state parliaments. Who is on the right track here?

Online piracy is always made out to be incredibly harmful, that arists lose their jobs and the economy billions of sales.

But who is actually affected by it?

The Losers

Despite the complaints about lost sales worth billions, box office numbers show no impact of online piracy. An American study called Reel Piracy: The Effect of Online Film Piracy on International Box Office Sales comes to the conclusion, that online streaming has had absolutely no negative influence on the US film industry. From when the first streaming sites were introduced in the early 2000s up until now, figures have pretty much stayed the same.

It shows that the big Hollywood films are in no danger of not being produced because of online piracy. Matthew Iglesias also argues that “… owners tend to assume that every unauthorized download represents a lost sale. This is clearly false. Often people copy a file illegally precisely because they’re unwilling to pay the market price. Were unauthorized copying not an option, they would simply not watch the movie or listen to the album.“

Unfortunately, this does not apply to independent filmmakers. Their budgets are low and every sold ticket or DVD means money they desperately need. Due to their anyhow small audience, it hurts them even more, if their movies are watched without paying. Director Ellen Seidler has dedicated a whole blog to the fight against online piracy. Like her, many filmmakers suffer from the effects of online streaming. Richard Verrier says that “Most independent filmmakers don’t rely on ticket sales to recoup their investment because the majority of their films never make it into theaters. Instead, independent films rely on DVD sales when their movies head directly into the home video market.“ I think that the fact that DVDs are simply in the process of becoming outdated is also a huge factor that hurts those, who are dependent on fans wanting to physically possess their movies.

On her blog, Ellen Seidler also points out that many companies profit from placing their ads on the streaming pages, which brings me to:

The Winners

Every sort of company can be found using illegal download pages for advertising purposes. Ebay, Microsoft or even Google make use of the popularity of online streaming pages.

Another, very interesting argument in favor of online piracy as a contribution towards sales is that of Neil Gaiman. The British author says that in countries where his books were pirated the most, sales of his work would go up so much that he sees online piracy as a way of advertising now. Below I’ve included a video of him talking about using online piracy as an instrument to promote your work.

Last, but most important is the gain for users. People who stream movies and shows online, have one cultural experience and at least € 10 more to enjoy and spend on other things. The only disadvantages I can see for users (except having a bad conscience), is occasonially bad quality and the lack of the “special“ feeling when going to a cinema.

But are cinemas even still contemporary? That, I will talk about next week…