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The loss of LimeWire has P2P pirates on the run.  (Source: Walt Disney)
But are pirates turning to YouTube and elsewhere

The NPD Group, a top market analytics research firm has released a new study [press release] that might surprise some.  It claims that in 2010 the rate of users who pirate content on peer-to-peer (P2P) networks dropped to 9 percent, down drastically from 16 percent reported in 2007.  This marks a dramatic reversal of the trend of increasing piracy rates in recent years.

The report argues that piracy is not a "fundamental" problem for the media industry, given the relatively low levels.  This stands in stark contrast to statements in the Digital Media Report 2010 [PDF] by the International Federation of the Phonographic Industry (IFPI), the parent organization of America's RIAA.  The IFPI stated in the report, "[The industry will] struggle to survive unless we address the fundamental problem of piracy."

Warner Music, a RIAA member takes a bit more conservative approach.  In a recent presentation to the U.S. Federal Communications Commission, Warner suggested that only 13 percent of Americans pirate.  The Warner report also offers some disclaimers about the harmful impact of pirates, stating that most pirates do spend money on content and that they "tend to drive high discovery for others".

The numbers from the NPD Group are admittedly slanted, though, due to a significant event in the industry.  They were taken from the final quarter of 2010, when the RIAA scored a major lawsuit win that forced the U.S.'s most popular P2P client, LimeWire, to cease distribution.  Thus the dip in P2P filesharing may be only temporary, due to the loss of one of the highest profile clients.

States Russ Crupnick, entertainment industry analyst for NPD, "Limewire was so popular for music file trading, and for so long, that its closure has had a powerful and immediate effect on the number of people downloading music files from peer-to-peer services and curtailed the amount being swapped. In the past, we've noted that hard-core peer-to-peer users would quickly move to other Web sites that offered illegal music file sharing. It will be interesting to see if services like Frostwire and Bittorrent take up the slack left by Limewire, or if peer-to-peer music downloaders instead move on to other modes of acquiring or listening to music."

Today, many of the most used clients are unofficial community releases of past P2P clients that were banned by lawsuits.  Examples include Kazaa Lite and WireShare (formerly LimeWire Pirate Edition), etc.  According to the NPD Group's data, FrostWire (traditional P2P) and uTorrent (Torrent P2P) increased in use, as well, in the wake of the Limewire shutdown.

While the study did consider BitTorrent traffic (a specialized P2P protocol), it did not consider new forms of illegal content distribution, such as one-click downloads, illegally streamed content, such as unauthorized posts to video sharing sites like YouTube.  The latter seems particularly prevalent, as you can go to YouTube and find virtually any song you can imagine -- mostly from unofficial user-submitted uploads (though the major label industry does maintain an official presence on the site via channels like Vevo).

Media organizations have tried unsuccessfully to sue YouTube's owner Google over such posts.  The television industry championed the biggest such case, when Viacom sued Google, demanding $1B USD in damages for pirated content hosted on YouTube.  The media giant's case fell apart, though, after it came out that Viacom employees uploaded content under fake screennames to make it look like infringed content.

The study also only surveyed those 13 and up.

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RE: What a joke
By Solandri on 3/24/2011 3:37:50 PM , Rating: 2
If people are dumb enough to pirate they are dumb enough to go to prison in addition to a $10,000 fine per copy.

Actually, that was increased to up to $250,000 fine per copy.

To give you an idea how ridiculous that is, Limewire was recently sued for $75 trillion (yes, with a t) for the infringement it enabled. I agree piracy is wrong, but when the legal fine for piracy exceeds the GDP of the world, the fine is way, way, way beyond excessive. That's the effect of the RIAA and MPAA's lobbying dollars - it's bought them laws which are so skewed in their favor that they strain all bounds of credibility and common sense.

If I had a dollar for every illegal download or distribution I'd be a billionaire.

That's just it. The *AA companies assume each download is a lost dollar. But the vast majority of those downloads are from people who never would have paid to buy the product if they couldn't download it. I myself download stuff to find out if I like it. If I do, I go out and buy it. If I don't, I delete it. So the *AA companies are in fact getting all the money they would get from me if piracy were impossible (more in fact since if I'm unsure whether I'll like a movie or CD, I simply don't buy it). But my downloads are still counting towards their mythical inflated piracy figure.

RE: What a joke
By Beenthere on 3/24/2011 3:57:03 PM , Rating: 2
You belief is unfounded. People steal what they want. If they want it most would pay for it if they had too or they wouldn't steal it in the first place.

Technically their motivation however is unimportant as the law provides for a $10,000 fine per copy and that should be accessed to all. The payment isn't just for lost revenue, it's meant to be punishment for criminal activity. Now that prison time will also be mandatory, we're gonna see a lot of whinning from pirates too stupid to buy their music, video or software.

RE: What a joke
By Noliving on 3/25/2011 12:14:46 AM , Rating: 2
No its not unfounded at all, even the US judicial system agrees with that sentiment:

Record companies cannot collect restitution for every time a song has been illegally downloaded, a US District judge has decided. Judge James P. Jones gave his opinion on United States of America v. Dove, a criminal copyright case, ruling that each illegal download does not necessarily equate to a lost sale, and that the companies affected by P2P piracy cannot make their restitution claims based on this assumption.

The reason why some people download copyrighted material that they don't want is for the simple reason because they can and or because of the fact that it is "free" and if it is free you might as well, right? People will still take/accept stuff that is free/"free" even if they don't want it or need it.

Here is what Russell Carroll had to say about piracy of his company's product:

As we believe that we are decreasing the number of pirates downloading the game with our DRM fixes, combining the increased sales number together with the decreased downloads, we find 1 additional sale for every 1,000 less pirated downloads. Put another way, for every 1,000 pirated copies we eliminated, we created 1 additional sale. Though many of the pirates may be simply shifting to another source of games for their illegal activities, the number is nonetheless striking and poignant. The sales to download ratio found on Reflexive implies that a pirated copy is more similar to the loss of a download (a poorly converting one!) than the loss of a sale. Though that doesn’t make a 92% piracy rate of one of our banner products any less distressing, knowing that eliminating 50,000 pirated copies might only produce 50 additional legal copies does help put things in perspective.

Another thing to consider is that just because someone wants something doesn't mean they believe it has any monetary value.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs

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