The verdict is in… Media Pirates are undeniably and economically irrational, just like the rest of us.

A seemingly endless stream of statistics are in play these day suggesting (or proving, in the minds of some) that so-called pirates also buy music, movies, and other forms of digital media. What few if any of these authors discuss openly, however, is the fact that this strange behavior—buying some files and downloading others through unlicensed venues—is, for lack of a better phrase, undeniably and economically irrational.

Two of these recent findings would be:

Where do music collections come from?, from the American Assembly
Downloaden neemt niet af ondanks bestrijding, from the Dutch Institution for Information Law.

First, and to be clear, neither of these studies (and very few if any prior studies) are in fact “before and after” studies. Which is to say that these studies to not sample music consumption patterns before access to pirate sources and then after such access.  Therefore, we are still in lack of the conditions for a “this causes that” conclusion. We cannot say that pirating causes purchase behavior, whether that behavior is a greater or lesser number of purchases.

Second, some of these surveys ask users about their P2P behavior and then also ask about file sharing among friends and free downloads from online. In reality, many people may not be able to distinguish these sources, and some of these sources—such as file sharing among friends—might constitute P2P in small networks.

Finally, and ultimately, we can draw only one key conclusion from these sorts of studies:

People who download media from unlicensed sources are irrational—undeniably and economically irrational.

This observation, or assertion, should probably be the biggest curiosity for researchers and industry mavens. Instead, as the coverage of the two stories above goes to show, we are still stuck in the endless debate over who buys more, and whether piracy causes this or that.

Its time to move on.

Why do people purchase some media and acquire other media through “piratic” channels?

Frankly, understanding this question is to understand why and how the industry will survive going forward.



Did the Big Machine/Clear Channel deal just set Webcasting rates at 3% of revenue?

Copyright nerds might want to pay close attention to a brief aside in a post from Oxenford on the Broadcast Law blog. 

In that aside, David refers to possible parameters in the Big Machine / Clear Channel royalty deal: 1% of revenue for broadcast royalties, 3% of revenue for webcasting. (These rates were also reported by InsideRadio).

These parameters were apparently not denied by the President of Big Machine.  Instead,  these rates were referred to as “in the ballpark.”

And what a ballpark! A rate that is orders of magnitude lower than that paid by pureplay webcasters and roughly 40% of that rate paid by satellite broadcasters.

To put the orders of magnitude in perspective… Under this 3% rate, Pandora would pay $12million in 2012 for sound recording use, rather than $130m.

The plot thickens…