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Billions of dollars in revenue estimated to be lost

The U.S. has the lowest piracy rate in the world, but globally nearly $50.1 billion dollars has been lost to piracy.  As  illegal downloads become a growing problem worldwide,  individual countries may determine that they do not share the same issues and concerns.  

In the U.S. producers of the movie, "The Hurt Locker” are tackling the issue of piracy by suing filesharers who downloaded torrent versions of the movie. India is taking steps to fight the U.S. ACTA Piracy pact on what they believe to be stringent restrictions, while Spain is finding that it has to get tougher in its efforts to combat piracy.

A new report published June 1 from IDC Research Iberia claims that over 95 percent of music in Spain is pirated. The report indicates that the country lost $6.3 billion in the second half of 2009.  It is estimated that the country lost about $12 billion dollars for the entire year.

The study was commissioned by the Coalition of Creators and Content Industries and targeted music, film, video game, and book distribution. The final results indicated that 95.6 percent of music obtained online in the country was pirated. Pirated films were estimated at 83.7 percent while video games came in at 52.3 percent.

Nearly 6,000 internet users in Spain were surveyed for the study.

"The real figures are even worse," says Coalition president Aldo Olcese, who believes that internet users under the age of 16, presumed to be the most frequent illegal downloaders, were not included in the study.

Anti-piracy legislation, called the Sustainable Economy Law, is expected to be rolled out after the summer in Spain.

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um what?
By smackababy on 6/3/2010 1:16:21 PM , Rating: 5
I cannot understand how they can simply equate every download as a lost sale. It makes no sense whatsoever. I guess they just like to inflate numbers to scare politicians into making laws.

RE: um what?
By xler8r on 6/3/10, Rating: 0
RE: um what?
By heffeque on 6/3/2010 9:14:55 PM , Rating: 2
Also, the title of this article is WRONG :

Sharing copyrighted material via P2P is 100% legal in Spain.

An example:

Oh, and as for the new law that the government wants to pass... layers here are saying that they'll sue Google, Bing, etc if they do pass it, because they facilitate links to P2P stuff too.
Taking into consideration that Google has 99% of internet searches in Spain, it would be interesting/funny to see Google get cut off in Spain because of some retarded law.

RE: um what?
By samspqr on 6/4/2010 4:16:27 AM , Rating: 3
I'm afraid you're not right: it's not a felony, but it's not legal either; they can't take you to jail, but you are liable for civil responsibility... in much softer terms than what we've seen in the US, anyway (so much that copyright owners have never law-suited anyone over this, to my knowledge)

we pay a tax ("canon") on all recordable media (CDs, DVDs, MP3 players, and now even hard drives), even the ones that will be used to store our own material (photos, personal work, etc), and that gives us the right to make personal copies of any copyrighted material; since 2006, though, the law requires that you make your personal copy from a legally-accessed copy, and personal copies cannot be lent, so most P2P is outlawed (you can't lend personal copies, not make your own from other people's personal copies)

renting a movie and getting a copy for yourself: 100% legal
getting a book from a library and making a copy for yourself: 100% legal, as long as you make the copy yourself (we also pay a "canon" on scanners)
making a copy for yourself out of your sister's original CD: 100% legal
making a copy for yourself out of your sister's personal copy of a CD: not legal (though not a crime either)
P2P: grey area, at best

RE: um what?
By tastyratz on 6/4/2010 11:04:34 AM , Rating: 2
This intrigues me. For the benefit of all the readers other than myself as well do you have any links to supporting data or documentation breaking that down you can post here?

RE: um what?
By samspqr on 6/4/2010 6:44:02 PM , Rating: 2
it's the bit of the law that's been posted just below this, I'll go on posting down there

RE: um what?
By heffeque on 6/4/2010 12:42:52 PM , Rating: 2
P2P: Gray area? that's what the SGAE (the equivalent of the RIAA) and their friends from the government want people to think.

In practice P2P isn't a gray area at all, or at least that's what judges have been saying for years now.

"but it's not legal either"

Either it's legal or it's not. And no, in Spain people are NOT liable for civil responsibilities for sharing copyrighted material.

Here's the law:

Artículo 31. Reproducciones provisionales y copia privada.

1. No requerirán autorización del autor los actos de reproducción provisional a los que se refiere el artículo 18 que, además de carecer por sí mismos de una significación económica independiente, sean transitorios o accesorios y formen parte integrante y esencial de un proceso tecnológico y cuya única finalidad consista en facilitar bien una transmisión en red entre terceras partes por un intermediario, bien una utilización lícita, entendiendo por tal la autorizada por el autor o por la ley.

2. No necesita autorización del autor la reproducción, en cualquier soporte, de obras ya divulgadas cuando se lleve a cabo por una persona física para su uso privado a partir de obras a las que haya accedido legalmente y la copia obtenida no sea objeto de una utilización colectiva ni lucrativa, sin perjuicio de la compensación equitativa prevista en el artículo 25, que deberá tener en cuenta si se aplican a tales obras las medidas a las que se refiere el artículo 161. Quedan excluidas de lo dispuesto en este apartado las bases de datos electrónicas y, en aplicación del artículo 99.a), los programas de ordenador.

So basically... it's not considered piracy unless it's not for private personal use. You can brake it down to: if you don't earn money with what you download then it's totally legal.

So there you go =)

RE: um what?
By samspqr on 6/4/2010 7:17:04 PM , Rating: 2
first, there are many things that are not legal but are not crimes either, like parking in the wrong place: they can charge you money for that, but they can't take you to jail (no es legal, pero no es un delito penal, es un ilícito civil)

apart from that, yes, that's the piece of law I was talking about; I'm glad to see I'm among knowledgeable people here, most people in Spain wouldn't know about it, apart from the usual noisy legends

as I understand it:

* the first paragraph says P2P is allowed, as long as the uploader has the right to distribute that stuff, and the downloader has the right to own that stuff, or if you are just an intermediary in a data transaction and there's no money around (you're not liable if bits of data temporarily go through your system as part of a P2P network)

* the second paragraph says you have the right to make your own private copies of copyrighted materials, as long as you make the copy yourself, from legally accessed works, and don't earn any money from them

these private copies are for your own personal use, and cannot be lent or shared, so you can't upload them through P2P; you can upload originals (if you're not getting any money, directly or indirectly, say through ads), but not private copies

the other key point in the P2P debate is that in 2006 they changed the law to include the "legally accessed works" bit; before that, if the uploader was uploading illegally, my copy was still lawful; now, I think, if he doesn't have the right to upload, then I don't have the right to download, because that wouldn't be "legally accessed works"; this makes 99.99% of P2P unlawful; you could try to spin it to infinity saying you thought your peers had paid-for originals, but I doubt you would get far with that argument

the copyright owners' association (SGAE), though, is not prosecuting anybody over these terms yet, so everybody feels safe; but that doesn't make P2P legal (they've gone after direct download sites, and won, and after link sites, and lost, even on the "illegal but not a crime" count, so linking is totally legal, but that, still, doesn't make P2P legal)

the very, very funny part is that the law also says that, as you have the right to make personal copies of copyrighted materials (except computer programs and databases), but some of those come with DRM (DVDs, and now most CDs), the owner of the copyright has the obligation, if you ask for it, to provide you with the tools to make your own personal copy; not that I'd want to check how they manage these requests...

RE: um what?
By samspqr on 6/4/2010 7:18:26 PM , Rating: 2
disclaimer: I'm an economist, not a lawyer, but I've read the law, and I've followed the trials

RE: um what?
By samspqr on 6/4/2010 7:32:01 PM , Rating: 2
just one clarification more, on the link you posted: it is true that link sites are legal, and that P2P networks are legal

but uploading or downloading copyrighted materials on P2P networks is not legal (in 99.99% of cases, see big post above)

so yes, and no

RE: um what?
By KIAman on 6/3/2010 1:34:58 PM , Rating: 2
It's because all of those people who downloaded would have purchased legally if they were unable to download... amirite?

RE: um what?
By GaryJohnson on 6/3/2010 1:41:55 PM , Rating: 2
Not assuredly, but possibly. There's no way to determine how many people who pirated actually would have pruchased the media if they couldn't have pirated it. So they give the only number they know how to calculate. I'm not saying it's right, but do you expect them to say, "We need to stop piracy! We estimate pirates are possibly having as little as zero impact on our revenue!" ?

RE: um what?
By smackababy on 6/3/2010 1:50:21 PM , Rating: 3
Except that it is not money lost, it is money that could have been possibly gained. They are not losing anything, merely missing those chances to gain a sale.

RE: um what?
By quiksilvr on 6/3/2010 3:02:55 PM , Rating: 2
In the business world, a missed sale is a loss. But I agree, the reason why people download illegally is so that they DON'T have to pay. So if they had to pay any money, I am sure they most likely just wouldn't get it and try to find it on YouTube.

RE: um what?
By bobcpg on 6/3/2010 4:10:35 PM , Rating: 2
the reason why people download illegally is so that they DON'T have to pay

Not completely true. Other reasons why people download illegally, could be bigger or smaller reason vs the one you point out.

1. Easier to share between all your apps/equipment
2. Easier access to get it. Simply firing up Limewire and downloading is way easier than sharing all your information with some internet company.
3. Spite, because they are suing everyone or they feel that they were ripped off somewhere before.
4. DRM, which somewhat goes with 1 and 2

RE: um what?
By RW on 6/3/2010 5:44:02 PM , Rating: 3
Loosing sales to internet piracy ? what they are talking about ???

Worldwide internet adoption, broadband speeds and filesharing programs were almost non-existent 10 years ago, so what was the income of music and film industry before year 2000 should be the income they will have if internet piracy would not even exist.
But you will be amazed to notice that the income they get these days is bigger than the income they did get before year 2000, just because piracy increase sales rather than decreasing them just because:
- The less people will see copyrighted content on the web the less they will be interested into it, the less the copyrighted content will gain market adoption, the less actors, musicians and studios will gain fame and money.

RE: um what?
By kmmatney on 6/4/2010 7:35:09 PM , Rating: 2
Maybe a few companies (the huge ones) are making more, but overall, sales are way down. The top music albums are not selling anywhere near what they used to, and there aren't any record stores left in the U.S.

As an example, in 1999 the BackStreet boys sold 13,000,000 albums in the U.S., and there were several albums that sold well into the millions (Ricky Martin, N'Sync, Brittney, etc...). Blink-182 had something like 6M albums sales in the U.S. that year, and they were #45 on the U.S. sales chart!

In 2009, the top selling Album was Taylor Swift with 6,000,000 copies in the U.S. (including digital downloads), and that was about it.

So there is a pretty huge difference between album sales from 1999 to 2009. Anyway you look at it, they are selling about half the number of albums that they used to. And you can't really blame it on crappy music being released these days - it was just as crappy back in 1999 (BackStreet Boys, N Sync, Brittney, Ricky Martin, etc...)

I do think that the music industry got too greedy, and started charging way too much, giving people more incentive to pirate.

RE: um what?
By jimbojimbo on 6/7/2010 5:38:27 PM , Rating: 1
don't forget
6. Is sick and tired of paying for something only to find that it sucks ass but cannot get their money back. The downloader will buy it if after watching it deems it worthy of earning their hard earned money.

Gone are the days when recording companies made a killing by putting in 2 good songs into an entire album of shit. Thank goodness.

RE: um what?
By OCNewbie on 6/3/2010 7:52:51 PM , Rating: 2
Someone I know very well has actually made purchases that otherwise would probably not have been made because an illegally available copy of a game was available online. Having a full version of a game available allows one to try it out in full and determine if it's truly worth their money.

With so many games out there, and demos not always being available or not accurately representing the game as a whole, downloading a game illegally can often expose one to a title they wouldn't have otherwise taken the time to check out, and thus potentially make a purchase they had never intended on making.

RE: um what?
By acase on 6/3/2010 2:05:22 PM , Rating: 2
Pretty sure that was sarcasm you are responding to, at least I hope so.

At any rate, I agree with you. I pirated music back in the college days, and then once I got off campus and they started suing everyone I haven't bought or downloaded a song since.

RE: um what?
By dgingeri on 6/3/2010 3:13:01 PM , Rating: 3
it also doesn't include situations where the person bought the CD or DVD and wanted it in an electronic form, so they "illegally" downloaded it. That's obviously not a lost sale, but they still count it as such.

RE: um what?
By hughlle on 6/3/2010 3:14:15 PM , Rating: 2
haha, i'd certainly pay for more cinema tickets if a refund was possible, but considering that maybe 1/10 films i watch is a load of tripe i'd never had paid for if i'd known, well no, it's not lost sales. i don't buy a film until i've watched a copy out of principal now.

RE: um what?
By HomerTNachoCheese on 6/3/2010 1:49:44 PM , Rating: 2
I think they are losing more like a million bajillion dollars every year.

RE: um what?
By Iaiken on 6/3/2010 2:01:08 PM , Rating: 3
How many is in a Brazilian again?

RE: um what?
By acase on 6/3/2010 2:07:22 PM , Rating: 4
Hopefully 3 max, otherwise things start to touch...

RE: um what?
By CyborgTMT on 6/3/2010 2:26:31 PM , Rating: 2
That's what duct tape is for....

RE: um what?
By Sazabi19 on 6/3/2010 2:33:09 PM , Rating: 2
freekin awesome

RE: um what?
By greylica on 6/3/2010 4:38:54 PM , Rating: 3
I am a Brazilian.
I don't download Ilegal Music or pirated things, prefer GNU/FREE, Creative Commons for Music (I've found very good ones) and Free content online, and better, I am creating content online and sharing with all of the world, why not ?
Why don't take another approach to solve those problems ? 5 US$, 6 US$ per month for an unlimited and original download for every person that want online content delivered by the original creators ! WHY NOT ?
I am seeing their wrong direction leading to a war, rage and fury, the legal system is plagged with problems that won't be solved with ideas that put the normal citizen as a criminal even when he isn't.
The market has changed, we aren't in the 1980's, 1990's where you could sell a CD-ROM with 300% lucrativity over the plastic case, now we have another kind of media to store music.
Why don't create a system whereas a person could download anything officialy and without ''Direct Restriction Management'' with a fixed price in their internet plan ?


My perception, is that politicians and media enterprises prefer a phantom threat to scare citizens all over the world instead of a new system that solves definetly those problems, and I am tired of that threat always spreading bad news about copyright infringement/sues/complaints and so on, I will avoid anything proprietary thanks to their phantom threat, their threat is starting to be very educative...

-I didn't see Avatar, for example, and I didn't die...-

Everyone know that it won't be solved this way, but the disruptive solution always scare whose refuse to understand or learn a true solution. The market pointed a new solution, but they won't admit it until the market shifts completely to free content to rage over years of threats and their ''avoid the simple solution, scare them, threat them, everyone is a infringer'' their next step is probably to try to stablish a clone of Adolf Hitler.

Sorry for them...

RE: um what?
By overzealot on 6/3/2010 10:47:36 PM , Rating: 2
Nice post.
I agree with most of what you wrote.
Was one of the fastest invocations of Godwin's Law I've seen in a long time.

RE: um what?
By Castaway on 6/3/2010 3:18:48 PM , Rating: 2
They may not be lost sales 1:1, but it's hard to argue that there's nothing wrong in someone having a chance to enjoy a product that's not been paid for.

RE: um what?
By jimbojimbo on 6/7/2010 5:46:14 PM , Rating: 2
but it's hard to argue that there's nothing wrong in someone having a chance to enjoy a product that's not been paid for
But there's the dilemma. How do you know you'll enjoy it if they want you to pay for it before you know you'll enjoy it? I gladly pay for products that give me enjoyment but in the same respect if something is so awful, like say Hurt Locker, will they pay me for my 2hours wasted time? At the very least they should give people their money back or allow people to return the DVD.

RE: um what?
By Fracture on 6/3/2010 4:56:31 PM , Rating: 2
I would have to question where these numbers come from:

$50.1 billion dollars has been lost to piracy

The previous article quotes the figure from "A new report". Is anyone asking where they get their estimates from? Do they travel to an alternate universe where the sales were made, or just pulling them out of their asses like I expect?

The study was commissioned by the Coalition of Creators and Content Industries - I wonder what their motivation could have been. I wonder what "estimates" or "information" they supplied. Most of all I wonder why they don't estimate the greater benefit that file sharing provides to the creative community and society as a whole which nearly all objective reports hold as greater value

RE: um what?
By eddieroolz on 6/3/2010 9:06:43 PM , Rating: 2

Asking everyone in Spain, which does not have the same salary level as the US, to buy all songs they download is simply ridiculous in my opinion.

RE: um what?
By inigoml on 6/4/2010 5:02:24 AM , Rating: 2
First one:
It's IMPOSSIBLE that the lost revenue was so high. 12.000M USD? I'm laughting! :-D In a country with 45 million people... each spanish, including childs, grandfather... would expend 250 USD per capita... IMPOSSIBLE. :)
Spanish music industry is about 300M USD, not 12.000M. :-D

Second one:
Each time an spanish citizen buys a CD, DVD, USB stick, memory card, hard disk, MP3 player, MP3 player, mobile phone (iPhone included, of course) etc, we pay an amout for SGAE. SGAE is the spanish RIAA. Last year they got about 200M Euros... not bad. Think about in my company we buy hundreds of CD/DVD for backups and hundreds of USB sticks for our employees.. and I can assure they are not used for piracy.

So, from a moral point of view, each spanish citizen is allowed to download all they want cause the have pre-paid for it.:)

"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher

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