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The impact of piracy on paid content sales ECPA Executive Leadership Summit May 4, 2010
Overview of today’s talk ,[object Object],[object Object],[object Object],[object Object]
Our point of view ,[object Object],[object Object],[object Object],[object Object]
“ Perhaps on the rare occasion that pursuing the right course demands an act of piracy, piracy itself can be the right course?” Governor Swann, in “Pirates of the Caribbean” (itself pirated)
“ Free” is not “new” … ,[object Object],[object Object],[object Object],[object Object],[object Object]
Why look at this topic now?
An evolving file-sharing landscape Centralized servers Decentralized Multiple sources
BitTorrent terms and tools Term Explanation Content files The original document (e.g., a movie, an e-book) Torrent files A collection of fragments (hashes) made from a content file, typically created using a BitTorrent client Indexes A directory of the fragments (hashes) required to make up a complete file Trackers Services that point to users with one or more fragments (declining in use) Client software A web interface that adheres to the BitTorrent protocol; used to create, search, download or stream .torrent files Seeds Sources of .torrent fragments Leeches Recipients of .torrent fragments; can become seeds when they receive a complete file
How BitTorrent file sharing works
Our research approach The research is data-driven, open (without compromising publisher data) and structured to share knowledge. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The current sample set The data provided here reflects results through April 2010. O’Reilly Media Have been measuring the impact on front-list sales since fall 2008 Monitored BitTorrent sites; only PirateBay had more than a handful of O’Reilly titles posted Tracked activity of seeds (uploads) and leeches (downloads) for any 2008 O’Reilly front list titles found on these sites Thomas Nelson Began working with Thomas Nelson’s fall 2009 list in August 2009 To dates, no fall 2009 titles have appeared on monitored sites Lag time for Thomas Nelson titles may be longer than for O’Reilly
What we have learned so far ,[object Object],[object Object],[object Object],[object Object]
The number of seeds peaks quickly
Leeches peak quickly and then decline
Lag time before seeding varies Average = 19 weeks
Where piracy may help sales ,[object Object],[object Object],[object Object],Because of different pub dates, the average time on sale for pirated content in this sample is shorter (35 weeks) than that for un-pirated content (47) weeks.  Comparisons at the end of the on-sale period are not reliable.
Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets
Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets
Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets +108%
Four-week rolling averages Average week at which seeded content first seen Unreliably small sample sets
Three useful cautions ,[object Object],[object Object],[object Object]
We see a more nuanced model “ White” market “ Gray” market “ Back channel” ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Our continuing question: what impact does piracy have on sales?
Understanding piracy … ,[object Object],[object Object],[object Object]
Adopting the reader’s point of view  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
A pirate-site example
Legitimate alternatives exist
Traffic is low, but cyclical
What might you take away? ,[object Object],[object Object],[object Object],None of this represents an argument against enforcement.  However, activity like this may represent “weak signals” that can help publishers compete now and in the future.
Avoid conclusions using limited data ,[object Object],[object Object],[object Object],[object Object]
Top 10 pirated titles (maybe) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: TorrentFreak, via Teleread (Paul Biba)
DRM does not stop piracy ,[object Object],[object Object],[object Object],[object Object]
In a pirate’s words … ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Richard Curtis, http://www.ereads.com/2010/02/wicked-wisdom-of-e-book-pirate.html
A call to action ,[object Object],[object Object],[object Object],[object Object],[object Object]
“ Information wants to be free.  Information also wants to be expensive.  Information wants to be free because it has become so cheap to distribute, copy and recombine – too cheap to meter.  It wants to be expensive because it can be immeasurably valuable to the recipient.  That tension will not go away.  It leads to endless, wrenching debate about price, copyright, intellectual property,  the moral rightness of casual distribution , because each round of new devices makes the tension worse, not better.” -- Stewart Brand (1984)
For more information ,[object Object],[object Object],[object Object],[object Object],[object Object]

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Brian O'Leary - How Much Does Free Cost?

  • 1. The impact of piracy on paid content sales ECPA Executive Leadership Summit May 4, 2010
  • 2.
  • 3.
  • 4. “ Perhaps on the rare occasion that pursuing the right course demands an act of piracy, piracy itself can be the right course?” Governor Swann, in “Pirates of the Caribbean” (itself pirated)
  • 5.
  • 6. Why look at this topic now?
  • 7. An evolving file-sharing landscape Centralized servers Decentralized Multiple sources
  • 8. BitTorrent terms and tools Term Explanation Content files The original document (e.g., a movie, an e-book) Torrent files A collection of fragments (hashes) made from a content file, typically created using a BitTorrent client Indexes A directory of the fragments (hashes) required to make up a complete file Trackers Services that point to users with one or more fragments (declining in use) Client software A web interface that adheres to the BitTorrent protocol; used to create, search, download or stream .torrent files Seeds Sources of .torrent fragments Leeches Recipients of .torrent fragments; can become seeds when they receive a complete file
  • 9. How BitTorrent file sharing works
  • 10.
  • 11. The current sample set The data provided here reflects results through April 2010. O’Reilly Media Have been measuring the impact on front-list sales since fall 2008 Monitored BitTorrent sites; only PirateBay had more than a handful of O’Reilly titles posted Tracked activity of seeds (uploads) and leeches (downloads) for any 2008 O’Reilly front list titles found on these sites Thomas Nelson Began working with Thomas Nelson’s fall 2009 list in August 2009 To dates, no fall 2009 titles have appeared on monitored sites Lag time for Thomas Nelson titles may be longer than for O’Reilly
  • 12.
  • 13. The number of seeds peaks quickly
  • 14. Leeches peak quickly and then decline
  • 15. Lag time before seeding varies Average = 19 weeks
  • 16.
  • 17. Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets
  • 18. Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets
  • 19. Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets +108%
  • 20. Four-week rolling averages Average week at which seeded content first seen Unreliably small sample sets
  • 21.
  • 22.
  • 23.
  • 24.
  • 27. Traffic is low, but cyclical
  • 28.
  • 29.
  • 30.
  • 31.
  • 32.
  • 33.
  • 34. “ Information wants to be free. Information also wants to be expensive. Information wants to be free because it has become so cheap to distribute, copy and recombine – too cheap to meter. It wants to be expensive because it can be immeasurably valuable to the recipient. That tension will not go away. It leads to endless, wrenching debate about price, copyright, intellectual property, the moral rightness of casual distribution , because each round of new devices makes the tension worse, not better.” -- Stewart Brand (1984)
  • 35.