The Economics of Piracy


Read this.  Below is a comment on the same link from masgramondou, who fortunately weighs in at the first comment. It’s important enough, I re-posted the whole thing.

Piracy. Yes you want to stop it but, yes, it may be the best marketing tool you have as an unknown author.

Eric Flint (and others, e.g. Cory Doctorow) said it originally about a decade ago but it still remains the case. Remember the average reader is not in fact a criminal and, these days, understands that authors need the royalties to survive.

If you make it easy to purchase and consume then the majority of people who might consider pirating your work will buy it. However the price has to be right (i.e. $4.99 not $14.99 or $24.99) and you have to make it so that they can easily get it on the device(s) they want. Do that and most people will buy not steal. And the ones who will steal, probably wouldn’t pay no matter what you did so if the piracy is electronic you aren’t losing anything



This reflects some data I’ve seen from folks in the ad industry, who normally study what makes an on-line ad effective. What is interesting is that the numbers reflect very nicely, except that pirated works (especially text based fiction) are a better return on investment than internet advertising. Think on that a moment.

In the Tabletop Role Playing business, where razor thin margins are a way of life, there are companies who upload free copies of their games into torrent as an advertising strategy. They say that it is by far the best advertising dollars they spend– by a long mile.

FWIW, the company used something like paper chase to collect data on where their copies went. Only they weren’t hunting for pirate 0. (Or, in this case, pirates 1-500+)They did a distribution survey and how much pattern matching they got in their purchase database. The numbers they reported on that return were absurdly high. I mean, sure, they make good games, but… would you base your economic model on that unless the numbers were definitive?

Also, professional musicians are known to upload free videos to youtube, with full production quality sound. Everybody knows there is a way to download and strip away the video. More often than not, if somebody likes it, they will fire up Amazon or iTunes and pay up to get the produced version, even if there is little practical difference.

Remember: MTV and terrestrial radio were started on the theory that people buy what they like when they hear it for free. Note that MTV started in the 1980’s, when it had been established that the radio music sales model works.


4 thoughts on “The Economics of Piracy

    1. It comes from various places. I need some time to look it up again. I know for a fact that one of those comes from a “law of the geek” episode. The RPG company I discuss was interviewed in a podcast (I think it was “Canon Puncture”.) The third, probably the thing you are most interested in came from an informal discussion had a friend overheard from work. That would be hard to document. :-/ I intend to back it up or will refute it.

      1. I understand, also not looking to “make you prove it” so much as I’m just curious. I’ve always assumed based on anecdotal evidence that this type of effect (the Westley effect?) was real but I’ve never seen any evidence of it and like I said in my own post I haven’t seen very many discussions of this kind of thing online. Mainly I was just curious.

      2. 🙂 I appreciate that. I over-responded because I want to write that paper, with citations and references, in my copious… spare time. Not to mention being *slightly* embarrassed, having made such strong statements without them. I did not feel a threat. Trolls aren’t so polite. 🙂

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