Statistical Proof That Pirates Buy More Stuff

The guy who robs the 7-Eleven rarely returns the next day to buy a Slurpee.

But in music, that’s exactly what’s happening.  In fact, stats now clearly show that pirates buy more Slurpees than law-abiding music fans.

The following comes from two sources: The American Assembly, a Columbia University think tank, and Statista, which compiled the report’s findings. The big takeaway is that P2P users purchased nearly 31 percent more downloads than non-P2P users.

Full research report here.

37 Responses

  1. Jaded Industry Dude

    No links? No detailed study info? I’m not inclined to believe a graphic without HEAVY data from both sources and to see what the age groups were and what type of music they listened to and how they bought it and what years this happened.

    Because I’m willing to be wrong but I’ve witnessed piracy NOT work out OK for the Metal Industry so this kind of chart could be damning for a lot of industries that piracy affects greater than others.

    I’m willing to sit down with this report and read every single portion of it. With a sharpie and highlighter. I may even give you all the notes I take, afterwards 😉

    • Me

      Yeah, I’d like to see how they went about coming up w/ these numbers. How was this study conducted?

      • paul

        OK, good point. I’ll add the full study, study, methodology,etc.

        /paul

        • Correlation but not causality

          Once again, a study that shows correlation, but not causality. There are lots of reasons that these two things could be correlated, but no evidence here that stealing causes you to buy more music. Any other interpretaion is fantasy.

        • Dave

          Look forward to it paul…But a small point….Even bullet point data can be usefull and I’m not cetain what anyone is going to do with a data dump…I’m happy with being able to detect that there is ginger in that new dish I like…unless I’m a chef, I don’t need to know how much..That said, as a data chef, I will enjoy more on the study..

    • Visitor

      So far this from Nov 2011 is all I could find on heir site.

      It has a pdf link that contains data and info on research.

      Still searching though

        • Jason

          Methodology:

          This note draws on the U.S. survey conducted by Princeton Survey Research Associates International. The results are based on interviews on landline and cellular telephones conducted in English with 2,303 adults age 18 or older living in the continental United States from August 1-31, 2011.

          The Copy Culture survey was sponsored by The American Assembly, with support from a research award from Google

          • Big Swifty

            Thank you Jason for the more detailed investigaion.

            Also, a big thank you to Google for sponsoring this research that shows conclusively that piracy is a net good thing

            Now google can say that the revenue they collect from searches for pirated material is an all good win-win for everyone

    • Myles na Gopaleen

      Either you have a lot of confidence in the CCI….or you are just being really sarcastic…help me out here.

    • Ken Manning

      Right, but if you refer back to the famous study out of Harvard/ Chapel Hill, you’ll understand that these individual’s would NOT have bought those songs anyway (at the current or any other price point). If you give them to the downloader, she’ll take them; otherwise, she’s not interested. So, although that number looks like lost revenue, it’s actually not. In the absence of P2P channels, you’ll still make the same amount.

  2. Big Swifty

    I would also like to see more of the data.

    How is “P2P user” defined? How is “U.S. adult” defined?

    Did participants self identify as adult P2P users or were they labeled as such by the researchers?

    These are just a few questions that immediately come to mind.

    • Visitor

      It goes without saying that the researchers are pro-pirates.

      Only pirates and content providers care enough about the subject to study it, and you can always tell who’s who. 🙂

      • Oooooh pirates!!

        It goes without saying that you have no idea how, why, or by whom actual research in this field is conducted. Please leave this to the thinking adults. Meanwhile you can go back to trying to make a profit by whining instead of understanding what’s really going on. You must be a Republican right? They hate research and value their beliefs over evidence too. Smiley face!!

  3. HansH

    “The guy who robs the 7-Eleven rarely returns the next day to buy a Slurpee. But in music, that’s exactly what’s happening. ”

    This proves that downloading is not stealing.

    BTW I just received a report from the Amsterdam University (The Netherlands) which has the same outcome.

    Here is the PDF (in Dutch)

    Downloaders buy more music than their peers. Looks like it is sort of universal.

    FYI Downloading music and movies for private use is legal in The Netherlands (no matter the source). Downloading movies and series is on the rise, (no Netflix here) downloading music is decreasing (thanks to 10% of the population using Spotify maybe?)

  4. Yves Villeneuve

    This graph is irrelevant.

    Would pirates buy more music if they could not steal, is the question the study should be asking?

    I think studies have shown that 20% of stolen content is in fact lost sales due to piracy.

  5. Jaded Industry Dude Who Wont B

    Also, sidenote; lol @ this still being a discussion point still.

    There will never be a justification for piracy. It’s the reason we are all almost out of jobs

  6. jw

    I would love to see a study on what the music industry would look like without piracy.

    MTV doesn’t play music. More kids are watching Jon Stewart than Letterman or Conan or Leno. Satellite radio costs money, I don’t know any kids with SiriusXM (and even then, you pay money to listen to SiriusXM, not to turn it off & put on a cd, it’s not passive like free terrestrial). Music magazines are struggling just to stay in business. Pandora is gaining steam, but it’s self directed… you’re not gonna break a band on Pandora. People listen to terrestrial radio in the car, but a lot of folks have tuned out of that completely because now you can. Twelve years ago you didn’t have a choice, you were stuck with radio. But now you have options. What are you gonna get in a tv commercial? It might pay well, but it’s got a marginal short term effect on sales unless your song is just really incredible.

    And so things are so fragmented, how are you going to make sense of anything without downloading? Without downloading, what are we left with? A thousand blogs screaming at us that a thousand different bands are the next beatles? Or worse, a thousand blogs regurgitating a thousand bands’ press releases?

    What sells music today, & going forward, is consensus… it’s momentum. If I’m not in “discovery mode,” if I’m just being passive like most people, I’ve gotta hear about a band from a couple of blogs and at least 2 or 3 friends on social media before I’m going to check it out. And even then I may just buy the single, rather than the whole record. Because I have the option. Didn’t used to. But downloading plays a critical part in this system. Without that, it breaks down. There aren’t any concentrations of interest big enough to get the ball rolling anymore. In the 90’s you’d hear a song a few times on the radio & a few times on mtv & you’d maybe go pick up the record. But that world doesn’t exist anymore. This isn’t something you can combat, returning to the old world isn’t an option.

    So when I hear “Let’s annihilate piracy,” I can only imagine things getting worse, not better. Spotify is the saving grace in that scenario. Because cd sales aren’t going to go up. And paid digital downloads aren’t going to shoot up. You’re not going to get more facebook friends or more twitter followers. Or more youtube views. All of that stuff is going to fall off.

    When the biggest single retailer is iTunes & you don’t have to buy the whole album, of course sales are going plummit. The conversion to digital music is going to deliver diminishing returns, no question. Well that’s not entirely true, the price of music could’ve been adjusted to reflect it’s new value (which was a lot less than a dollar, not more) & the volume of piracy would’ve been a volume of small payments & revenue wouldn’t have dropped so dramatically, but we’re way beyond that. Either way, it was a necessary transition. It had to happen in order for planets to align for streaming, which is the future, & piracy is a side show that’s keeping the industry from moving forward. What you should be gunning for is your piece of the $120.

    • Just another voice in the air

      Dude, you nailed it so hardcore. While some of your arguments are a bit nebulous and emotionally charged, the main point is what matters most.

      Props

  7. smoke and mirrors

    People are focusing on the wrong thing because of the popular fallacy that piracy is good for the artist. The real story is quite damning to piracy, and it’s right in front of us here –

    Using their numbers, while file sharers bought 14% more music, they also bought only 60% more music than downloaded free, whereas non file-sharers bought a whopping 318% more music than downloaded free, or non-pirates bought roughly 5x as much as they downloaded free.

    Extending this to the roughly $3 billion digital music sales industry (http://www.pcmag.com/article2/0,2817,2402244,00.asp), 57% of it is making 5x less purchases than the other 43% because they downloaded the product for free. So, pirates BOUGHT $420 million more, but they COST $8.6 billion and the industry totally misses out on these sales.

    Chart title should read:
    “Music Pirates Cost Digital Music Industry $8.6 Billion and 287% of Lost Revenues”

    • jw

      That interpretation might make you feel better about your lot in life, but it’s just not true.

      The reason that pirates purchase less proportionately is that more music is released each month than there used to be, which affects quality negatively, or it just means that a lot of that music isn’t relevant to the downloader, & the landscape is fragmented, there is no voice of god instructing everyone what music to buy, only a thousand shouting voices coming from every direction, so they have to sift through everything themselves. And most of it is terrible to mediocre or irrelevant to the particular individual. And they don’t go and then purchase that music. That would be stupid. But the chart does show that they purchase the music that they find that they like, which is INDISPENSIBLE INFORMATION. And then they post to facebook & twitter & blogs & “make taste” & they create momentum & they drive those holy non-pirate sales.

      The music industry would benefit by talking to these pirates, actually trying to understand what is happening instead of trying to extrapolate reality from these charts & graphs, & instead of using them as scapegoats.

      I can’t wait until streaming really takes hold & piracy is no longer needed & the truth is going be on a spreadsheet every month & the scapegoat will disappear.

      I’m not saying that there isn’t lost sales, but to paint all of those songs as lost sales is just stupid. IT’S NOT AS SIMPLE AS A BUNCH OF CHILDREN LOOTING A CANDY STORE. To ignore that the pirates play an essential role in the modern music landscape is not only dumb, but it’s damning for the industry. It keeps everyone from moving forward.

      • Visitor

        What a smug attitude. Imagine walking into a food store and demanding to sample all of the food before you buy it. This is an irreconcilable attitude towards living in our economic system. If you don’t want to take a chance spending a few bucks on an artist whose music you think you’d enjoy, how the hell do you step foot outside your house every day?

        Also, if people take the trouble to download it, they’re interested in it. If they think it sucks or rocks, it doesn’t matter, because taste is relative, as is all things that we purchase in life. Why is this even a debate?

        • jw

          Why is it a debate? Well if I buy a t-shirt & it doesn’t fit, or if I buy a toaster & I’m not happy with it, I can take it back. But the iTunes TOS reads “All sales and rentals of products are final.” Why is that fair? Because it’s digital? I can return an iPhone, can’t I? Hell no, I shouldn’t have to pay for an album that’s shit. And I shouldn’t have to take the chance without the opportunity to return it. How could YOU be that smug and arrogant?

          Either way, that’s totally the wrong way of looking at things. This paradigm is based on material goods that take up physical space & have to be transported & they’re made out of physical materials that are comodities & finite by nature. The barter system makes sense for that. You want something of mine? You have to give me something that is equally precious.

          But when it comes to digital goods, they are, in practical terms, infinite. And the new comodity is time. Data is a now a stream that you pay for access to, & how you spend your time determines how that money is divied out. This isn’t about selfishness or greed or theft. It’s about understanding the nature of commerce when dealing with digital goods. Paying for digital goods, particularly media, just doesn’t make sense to young people. This isn’t about morality, it’s about economic principles.

          I could sit at my computer for 24 hours straight & copy & paste mp3s, make millions & millions of copies & never listen to a single one & it doesn’t make a damn difference. Digital files do not hold value the same way physical objects do. Get that through your skull!

          I have to comb through recommendations & new releases on Spotify, it’s no different than doing it on the Pirate Bay. The only difference is that Spotify’s economic model has caught up with me, & so I pay $120/yr to do it.

          But here’s a textbook example of how this works… Matt Mays’ new record just came out, Coyote. It was a top 10 record in Canada the week it was released, it’s doing pretty well. But it’s not on Spotify, for whatever reason. So I downloaded the album on bit torrent. I liked it so much I ordered the double vinyl from his website. So where do I fit into your moral scale?

          You’re going to have to make the shift to this kind of thinking because it’s coming like a tidal wave, it’s irreversible. This is how people Gen Y & younger think. You’re going to have to make the shift sooner or later, you ought to do it sooner.

          • Central Scrutinizer

            I agree with your description of the new digital music business reality.

            The ability to access and preview vast quantities of music is a major contributor to the downward trajectory of the value of digital music as a product.

            And I think many people just cannot grasp the fact that to eliminate digital piracy an authoritarian technological and legal system has to be put in place. We would all need to swear allegiance to the CCI and be prepared to continuosly pay politicians to vote for new laws.

            I have heard 6 months worth of free music on spotify and I have heard only one entire CDs worth ($8.99) of music that I have purchased.

            So I haven’t reached the point yet where I am willing to pay $10 a month for unlimited ad free access.

          • Interesting points but...

            “Well if I buy a t-shirt & it doesn’t fit, or if I buy a toaster & I’m not happy with it, I can take it back. But the iTunes TOS reads “All sales and rentals of products are final.” How is that fair?”

            The TOS might say that, but iTunes TOTALLY TAKES RETURNS.

            I accidentally bought a clean version of a song… I used their (vaguely annoying) customer service report system, and a few days later got a response and 99 cent credit in my account. Boom. AND, I still had the clean version in my iTunes, they didn’t remove it or anything.

            I work at a music distribution center, and we get reports from iTunes, and music we distribute there gets returned all the time by customers for various reasons.

            They take returns for credit. Just wanted to clarify that.

          • jw

            That’s good to know.

            Can you give any insight into how digital downloads compare to physical purchases, in terms of returns?

    • Guest

      Time to face facts. Music in recorded form is now merely a promotional vehichle for live performances as far as creating income is concerned. So, unless you can get your tracks on tv shows commercials or movies, start preparing to live like a real musician and play concerts. DO not complain that you are not getting paid for performing to begin with. Unless you are absolutely spectacular you probably do not deserve to earn that much from a performance anyway. The public does not owe you a living. You need to be something quite out of the ordinary to merit making a living from music. Times have changed. Change or go the heck away. Stop whining about Spotify. If you dont like the royalty rate , noone is forcing you to put your music there.

      • Visitor

        You might be overstating it to make a point..but your point is valid.

        I wouldn’t go so far as to say “recorded music is now merely a promotional vehicle.” There are still a lot of folks out there spending a lot of money on CDs and downloads.

        Also, artists will always make a little money off of streaming…just not enough to make a decent living let alone an old school excessive major label superstar lifestyle.

  8. Mark

    I totaly disagree with this statistical proof.

    If I look arround to my friends; in the past they were buying music , some a lot some less, but now nothing anymore, totally nothing. Some are downloading a lot and some not but they are also not buying anything anymore because they get it now more easy free from friends.

  9. Greg

    This report is nearly a year old. Why is it “news” regardless of what we think of the methodology?

  10. Vinny

    “The guy who robs the 7-Eleven rarely returns the next day to buy a Slurpee. But in music, that’s exactly what’s happening. In fact, stats now clearly show that pirates buy more Slurpees than law-abiding music fans.”

    Wrong analogy – it should be more like this:

    “Big fat Slurpee drinkers buy lots of Slurpees at 7-11. But when they can get Slurpees for free, they’ll do that as well. If 7-11 didn’t make Slurpees free, those fat bastards would still be buying them at regular price.”

    • jw

      But if slurpees could be reproduced infinitely, if all of the costs associated with production, outside developing the formula itself & creating the initial sample, were done away with, is that not justification for rethinking how these transactions take place? Should we not think outside the box, & develop a new system of commerce that makes use of technological advancements, & maximizes the potential benefit to the consumer, & profits for the 7-11 & for the slurpee manufacturer?

      This is an example of an industry trying to hold onto the product as the commodity when the product is no longer the commodity. And the consumer knows it. The consumer knows that their time is the new commodity, or the size of their bladder is the commodity. And when the industry treats a consumer like this, a system is going to develop outside the industry to meet the consumer’ needs. Yes, people will exploit this, & make money off of it. Yes, some people will never show up at another 7-11. A lot of people will stop by the 7-11, occassionally out of convenience or out of loyalty, or they’ll buy a slurpee when they’re in there to pick up something else. But everyone will know that the system is broken. The consumer would rather get all their slurpee from the 7-11, but in the way that they expect, & the mannor that technology affords. And the 7-11 would rather a black market not be making their profits. And most consumers feel the same way. But the system is broken. The industry has to come around to fix things.

      This has nothing to do with people coming into a 7-11 & stealing slurpees. Nothing at all. That picture couldn’t be further from reality. It has to do with understanding the new commodity, & creating a new system based around the new commodity, not the old commodity.

      This is how the internet has fundamentally changed commerce & media consumption. This isn’t about theft or morality or stealing or disrespect or piracy or any of those things. It’s about economics. If anything, this is a maturation of media industry. This is where things ought to go. Because now it’s possible to say, rather than people buying a slurpee once a week or once every 3 months or whatever, whenever they’re in the right place at the right time & the mood strikes them, we can say “Alright, you can fit x amount of fluid ounces down your gullet per month. Technology has afforded us the ability to remove all manufacturing costs, so you’re getting a discount rate for x ounces per month. And whether that’s coca-cola classic or pepsi clear or lipton’s ice tea or cherry slurpee, we’ll keep track of what you’re drinking & divy out that money according to that spreadsheet.” Everybody wins!

      • dangude

        “we’ll keep track of what you’re drinking & divy out that money according to that spreadsheet.”

        Who gets to be the “we”?

        • jw

          Well, ideally, technology would allow for transparency. In a perfect world, a consumer would log in & see what they’ve consumed in a given month & how much. A distributor would log in & see how many of their products had been consumed. And the cherry slurplee guy could see how much of his product had been consumed, & perhaps even who consumed it. And the service through whom the consumer goes, the 7-11, who receives the payments, would obviously distribute the money.

          I dunno, that’s all going to be worked out behind closed doors. Distributors will probably block access by the individuals responsible for individual drink, & they would have to put trust in their own private agreement, & they’ll obviously have to have their own agreement updated to reflect the new industry. But that shouldn’t keep the industry from moving forward.

  11. Visitor

    This isn’t statistical proof of anything, it’s pseudo statistical nonsense. A survey is the most unreliable form of information gathering, an impersonal phone survey even more so, an impersonal phone survey where subjects self report on a behavior that is commonly considered negative and whose answers aren’t verifiable? Give me a break.

    To top it all off, it was funded by Google.