sharing-increased-sales-for-up-to-41-percent.md 9.5 KB
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In May of 2019 Nicolas Winding Refn shown episodes "The Tower" (4) and "The Fool" (5) of his miniseries Too Old To Die Young on the big screen in the Cannes Film Festival in France. The series was released on the unfortunate Amazon's streaming service later in June of that same year. In one of the interviews he explained that the decision to skip first 3 episodes at Cannes was a strategic one. He wanted to equate the experience of seeing part of the series out of order as if going to a book store, picking up a random book and reading a few random pages in the middle to decide whether you want to buy it or not.
In art, whether it's images, film, music or video games, having a sample to try and fill it before you decide to buy it is a crucial thing for the success of a given art project. The value of any given artistic piece is totally subjective. And the potential buyer should be able to experience the art before committing to buying it.
With something like paintings it's a rather simple to imagine process. It's easy to produce cheap copies of the painting. Or even a digital reproduction of the painting. To show the potential buyer what is it he or she is buying. The buyer sees the painting. He or she may even attend a gallery and see the painting in real life. Experiencing the original painting in full. And deciding whether he or she wants to own that painting.
Imagine not being able to see the painting at all before deciding to buy it or not. This is what could happen if you are trying to buy digital copies of movies and music. Giving you a small sample of a given song, or showing you a trailer may be extremely deceiving as most people who ever watched a film or listened to a song can tell. This could, in theory, produce a good enough advertisement to sell the product if done well. But there is still a problem.
For some people experiencing a given film or a given song in full is a deciding factor for whether this person wants to buy it or not. From even the personal experience, I remember watching a film or two from a given film director without paying for it, in a friend's house who had a large TV. And being stunned by the movie enough I just had to watch the next film by the same director in the proper cinema. Buying a full cost ticket for it.
"Piracy"
Piracy - an act of armed attack on a ship at sea in order to take control over the ship and things on board. Highly dangerous and highly illegal activity that will most definitely result in people loosing their lives.
Movie studios, publishers and music labels like to equate sharing of files as some kind of act of piracy. Which is a total misappropriation. Violently attacking ships and killing crew members is nowhere near the same as uploading a song to a place where other people can download it. But since those people will probably not send a paycheck to a company that made that song, the company is getting angry. And a misappropriation from their side is kind of expected.
But, are those companies actually loosing money if people are allowed to share copies?
With the "common sense" kind of stupid brain that does not really look deep into the situation, you may analyze it in the following way: "Why should anyone buy something if there is a gratis version of it?" But of course this is completely false. Just only in 2019 Red Hat reported a revenue of $879 million from selling GNU / Linux. A widely available gratis Free Software Operating system.
What if I told you that in the worst case scenario nothing will happen and in the best case scenario sharing of copyrighted material can increase it's sales for up to 41%. And I'm not talking about how many views it will have. I'm talking about revenue in money.
Laurina Zhang's research
Yesterday I stumbled upon a research paper by Laurina Zhang who looked into a sales fluctuation data of music sales between 1992 and 2011 for potential changes in revenue, comparing sales with DRM ( Digital Restrictions Management, a system that restricts usage and copying of files ) and without DRM. The paper starts with the following abstract:
I examine the impact of a private response by firms in the recorded music industry to combat piracy - digital rights management (DRM). Using a large sample of albums from all four major record labels (some with DRM removed, and some not), I find that removing DRM increases digital music sales by 10%. However, relaxing sharing restrictions does not impact all albums equally; it increases the sales of lower-selling albums (i.e., the “long tail”) significantly (30%) but does not benefit top-selling albums. These results suggest that the optimal strength of copyright depends on the distribution of products in firms’ portfolio.
As you can see she uses the word "Piracy" to refer to sharing and uses "Digital Rights Management" to refer to DRM. Which is a false statement since DRM manages restrictions on it's customers, not their right.
On average the increase in sales was about 10%. But at the peak, the increase could be observed ( as I found by reading the whole paper through ) up to 41%. The paper goes into details about the so called "long tail" which is referring to music not as popular being effected by this phenomenon the most.
The hypothesis is that popular music is already well know and highly shared. Thus removing Digital Restrictions from them does not effect their distribution. But with less popular music, removing restrictions allows for more spread. Which increases awareness from people about this music. And since sharing ( even though still legal ) is technically more possible. It gives new potential customer a way to preview the art before committing to buying it.
In reality the paper explains that for the biggest hits DRM doesn't work. It's on such a high demand from people who share files illegally, that taking time and figuring out how to break DRM becomes valuable. And thus biggest hits are shared the most anyway with or without DRM. But for smaller artists DRM hurts their sales since they are not shared as much. Which means that what ever arguments companies have for using DRM. If they say that it's related to their revenue, they are lying.
Learn more about what DRM is really for on www.defectivebydesign.org
Conclusion
People need a taste of what they are paying for before they are paying for it. For example, I go to buy sound equipment in a store that lets me try it out before I buy it. I can come there and record a full album without buying a single device. Even though I would probably not be able to record any vocals since there are a lot of people coming and going all the time. But since I can try things. I know what exactly I like. What sounds best. And what I would like to take home.
Sharing of gratis copies of film and music makes people aware of what they want to buy or who they want to support. People are not stupid. And they know that without monetary support, not a lot of people will continue doing what they do. So they buy the albums and buy the tickets to the cinema to show appreciation. Even though, quite possibly, they found out about the artist through a more gratis way. Through sharing. Through being able to share.
Happy Hacking!!!
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