Assessing piracy harm is like climate science.

Ernesto (no last name) at TorrentFreak published a slightly sarcastic article about the fact that pre-release piracy did not do any apparent harm to the box office bonanza for the makers of American Sniper.  I have personally criticized pre-release piracy as a distinctly egregious form of theft and have stood by the principle that the behavior can cause harm to the primary release window of a motion picture.  Most specifically, though, I called pre-release piracy a “dick move,” and I’ll stand by that without apology whether it does financial harm to any particular film or not.

Ernesto points to the indisputable fact that some movie industry professionals blamed the widely reported pre-release leak of Expendables III for that film’s poor performance at the box office. He then rhetorically suggests that the contradiction in the case of pre-release piracy of American Sniper, which is doing very well, is a mystery.  Even with the sarcasm, TorrentFreak often presents articles in a fairly balanced manner, as follows:

First of all, the impressive opening doesn’t necessarily mean that the pre-release piracy had no impact at all. Perhaps the film would have raked in an additional $5 million without piracy.

On the other hand, some may argue that piracy may even have helped to promote the film through word-of-mouth advertising. In the end we simply don’t know what effect piracy had on the opening weekend.

I’ll agree with Ernesto enough to say that we don’t know, but I will say that the answer, (or answers) is likely a little more complex than the obvious fact that the two films being compared are like chalk and cheese.  Yes, American Sniper is a big deal film getting all sorts of accolades from critics and stirring up all forms of chatter on social media, while Expendables III was a typical example of a franchise being beaten to death and would never have attracted that degree of critical or audience attention in its wildest ambitions.  So, the success of the former and floppage of the latter is not inherently about piracy, but that has nothing to do with whether or not piracy is harmful in the aggregate, which is the more important question.

Regarding the economic harm done, if you view piracy the way Ernesto is viewing it on TorrentFreak, you’re what we call a climate science denier.  You look outside and the weather is okay. In fact, there’s snow on ground!  Global warming?  Ha!  This is the myopia we often encounter from a variety of idiots or vested interests incapable or unwilling to accept that the climate is a very large, very complex system and that climatology takes a much broader and more comprehensive view than our day-to-day peek at the weather.  Now, I’m not calling Ernesto an idiot.  As I say, I think TF can be fairly balanced, and I think his question is posed honestly.  But, trying to assess the harm, or potential harm, done to films by piracy through examination of two or three movies is like trying to study the global climate by looking at the ski report.

The reason I say this is that, like the climate, there are a variety of factors at play, including a significant amount of uncertainty, when it comes to averaging the successes and failures of motion pictures.  And one of those uncertain factors  is the fact that studio executives have believed since the days of two-reelers that they actually understand all the other unruly factors for success.

Ernesto is right that we won’t really know the harm/benefit of piracy on American Sniper, but there are a lot of other things we won’t know either.  We won’t know who went to see the film that wouldn’t have if not for some of the controversy it stirred.  We may not know — and I suspect this is the case — whether or not this film drew a demographic out to the theaters different from the demographic that typically engages in piracy.  Ernesto speculates that perhaps the blockbuster would have made an additional $5 million without piracy, but one can just as easily theorize that an above average audience of 55+ year-olds offset the losses of piracy to the tune of $5 million.  Eastwood’s name alone is worth a segment of audience that doesn’t even know how to pirate and doesn’t always go out to the movies these days.

Multiply all the factors for success by the total number of films made at every level and you have a data set that needs a climate scientist’s computer to begin to make predictions about the motion picture environment.  But what we can know without a whole lot of complex research is that there is always a finite pool of money available to invest in motion pictures, and we can know that investors generally like returns and hate risk.  And film is always risky, even the “sure things.”  So, the most distinctive films, the ones that surprise us, are the riskiest ones of all, not only with regard to subject matter or style, but because they almost always operate on much smaller margins. These films are historically less attractive to investors even without added risk.   Moreover, some production companies spread their bets across a wide range of fare, some presumably more commercial, others more creatively daring.  Hence, even a loss on a commercial film that some piracy rationalizers may presume to call marginal, might have been the seed money for that other product.  In the larger economic climate, this is certainly the case.

So, if we want to make assumptions about the prospective harm done to movies by piracy, it is insufficient to compare and contrast a big movie that has a lot of reasons to flop with a big movie that has a lot of reasons to win big.  We need to look instead at the prospect that piracy, like carbon in the atmosphere, adds substantial risk to investment across the broad range of distinctive films that are produced in the middle by independent filmmakers who survive on relatively modest returns.  Those are the films we’re mostly likely to lose in the long run.

Not that this means I condone piracy of the big movies.  No, that’s still a dick move.

© 2015, David Newhoff. All rights reserved.

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12 comments

  • Torrent Freak mentions 3 million illegal downloads, so there’s money lost there, we just don’t know how much. Safe to say that few who watched the film online will want to see it again in the theater, pay for a download or buy the DVD.

    Simply a justification for bad judgement and lack of integrity.

  • Perhaps a better metaphor for piracy than theft is pollution – it is a kind of economic environmental crime.

    • I’ve always thought the “fare dodging” analogy has a lot to recommend it. As well as being close, it also puts the lie to piracy being a form of civil disobedience. Because fare dodging has been used in that manner. And those doing it do so openly and publicly, defying the companies they’re protesting against to take action.

      On the OP, another way in which this is like climate science is this. We are as near to a definite answer as one can have in this area. If you study the various studies on the issue (admittedly I mainly know the ones about music but I’ve seen no evidence that this is different in other sectors) they overwhelmingly lead you to one conclusion. Piracy causes economic harm. By this point we can be as sure of that as we are that global warming exists. Those that deny that simple truth are merely stating ideological positions with no relation to the data at hand. Those that would suggest otherwise are no less laughable than the “each download is a lost sale” position they rightly decry.

      So, honestly, I think we need to move on. Because there are a lot of other interesting questions that warrant further study.

      What is the specific damage caused by piracy, sector by sector? We will never get an exact figure, but I’m pretty sure we can get a lot closer. (And, as David points out, that’s a question of quantitative, not qualitative research. Individual case studies aren’t useful, at least not yet).

      Are there any potential benefits from having a work pirated? If so, how much effect do they have? Are there no other ways to reap those benefits without the downsides of piracy?

      Are any specific proposed solutions to piracy feasible and/or desirable?

      I’m sure there are others, but those are what I see as the big three.

      On Torrentfreak, they’re actually a pretty interesting case study on a qualitative level. Because while they very much position themselves on the “new tech” side of the debate ideologically, they’re actually an example of a very old way of making a name for yourself in the media. You find a specialist niche and aim to be the go-to resource on that.subject. What they’ve done isn’t that different then the model followed by scientific magazines. And they’re undoubtedly a highly useful source on these issues. (That’s why so many people who don’t agree with their editorial line will still cite them at times). You obviously have to filter for their bias. But, pace Chomsky, you should do that with any news media anyway. And in the case of Torrentfreak it’s actually easier to do so because of how overt they are about it.

      • Trouble with fare dodging is that it allegedly only hurts a big company (although it results in higher fares for everyone.) the “dine n’ dash” is closer; it hurts a small restaurant more than it does Red Lobster.

        (Interestingly, one commenter during the Emily white controversy bluntly stated that they shoplifted all the time because they couldn’t afford food, which speaks to larger issues of the economy)

        I think the pollution analogy works in one sense in that there are large scale and a small scale implications. An individual littering has less effect than an industrial polluter, but if enough people do it (as anyone who grew up before the 80s can attest) it can get ugly. Smoking is similar.

        What curbs both pollution and smoking is a combination of regulation and enforcement of the big players and social pressure on individuals. Artists need to speak up, and fight back against the inevitable Larsification by torrent fans.

  • AnArmsLengthInterestedParty

    Editor of TF Lennart Renkema, aka Ernesto, is in a tough spot.

    He once conducted a fascinating mind-experiment on TF around “the morality of culture behind a paywall” but his own readership has let him down. Current commenters appear disinterested in the evolution of law, the details of PRO’S and artist compensation and so the erudition has moved on.

    His remaining fanboys are of the “all yur free moovees are mines” crowd and now the discussion centers around technical circumvention of court ruling.

    Throw in the occasional bloviation of Falkvinge and Ernesto has his work cut out for him if TF is to regain a place of stature, save amongst the uneducated, ill-informed and barely sober.

  • The comparison to climate change and piracy is an apt one. Nearly all studies show that piracy, overall, is harmful to the creative industries, the effects of it are unpredictable on a local level but the trends can be seen on a global one and, despite all of the evidence, some continue to deny that there’s a problem.

  • Piracy will continue until we re-define the terms: no one is actually stealing ‘music’–they are stealing people’s paychecks, and, with that, making it impossible for those artists to make a living. Piracy is simply robbing people of their rightfully earned money and livelihood. It should be stated as such.

    Global warming existed from around the end of WWII until about 2000. Then it simply stopped, even though we are pumping over 40 billion metric tones of hydrocarbons into the air every year. Since 2000, China and India combined have constructed about 800 coal-fired energy plants, and that doesn’t count any other nations’ efforts. Man-made global warming is a great hoax. I was worried like everyone else, but after a concerted 6 months of intense research, I found that mankind is not responsible. We are entering a cooling period because the Earth’s global climate is cyclical. We may be approaching another maunder minimum [‘little ice age’]. Or more seriously, another Younger Dryas era. Do your own research with an open mind, Read the IPCC reports, study climate science, and inform yourself about the Earth’s geological and climate history.

    • I prefer to take the OVERWHELMING number of ACTUAL climate scientists word on the matter….than some random joe who posted something on the web…

      • OK, well…I guess you must think Kepler, Copernicus, Galileo, Darwin, and Einstein were all wacky, as they didn’t have the ‘consensus’ of their peers. Consensus has absolutely no place in science…science is all about the scientific method, and experimental and measurable proof. No IPCC report has made a single correct prediction. However, they do contain countless simply wrong extrapolations based on a very bad and incomplete computer model.

        Man made global warming advocates have now assumed the position not unlike fundamentalist religious fanatics. No amount of measurable facts [ NO GLOBAL WARMING SINCE 1998 ] will dissuade them from their views. These views are like those of the 9/11 truthers and other weird fact-dismissing parrots. Don’t ever bother to get the facts for yourself, but just repeat the endless doomsday scenarios of the fear-mongers.

      • For every Kepler, Copernicus, Galileo, Darwin, and Einstein there are 1 million charlatans, cranks, kooks, and screwballs.

  • I very highly doubt you know much about climate science. I’m not expert, but they’ve been wrong on many things for years. They’re statisticians with the weather, they take a whole pile of data, make a prediction, and are still wrong over half the time. Terrible comparison

    • To Jordan & Michael:

      I’m not going to get into a debate about climate change on this blog for reasons I hope are obvious, but I have been reading about the issue since 1997 when I published an article about cogenerating power plants. This highlight from the Policymaker Summary of the 2014 IPCC Report sounds unequivocal:

      “Anthropogenic greenhouse gas emissions have increased since the pre-industrial era, driven largely by economic and population growth, and are now higher than ever. This has led to atmospheric concentrations of carbon dioxide, methane and nitrous oxide that are unprecedented in at least the last 800,000 years. Their effects, together with those of other anthropogenic drivers, have been detected throughout the climate system and are extremely likely to have been the dominant cause of the observed warming since the mid-20th century. {1.2, 1.3.1}”

      This is not a political issue manufactured by tree huggers. The DOD has done a comprehensive study on the security threats posed by global warming. I feel confident enough in the consensus on this body of science to use it as a metaphor.

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