Digital Piracy: How Does It Impact Sales?

by | Nov 2, 2021 | 0 comments

Piracy has always been there!

Right from the beginning of professional movie production, piracy has been there in different forms; be it bicycling (unauthorized extended shows in theatres) in the silent movie era, pirated CDs, camcorder recordings, or the current trend of restreaming of linear content.

But Does Digital Piracy Impact Sales?

This has been an eternal question that begs an answer.  It depends on whom you ask and which side of the debate they stand on.

The Answer Could Be an Emphatic Yes-It Is Not That Simple Though!

There are statistical studies that say that piracy has no impact on sales.

On the other hand, there is a report that estimates that the Indian media and entertainment industry loses some 820,000 jobs and revenue equivalent to $4 billion each year to piracy and counterfeiting.

Factors That Might Help Us To Put The Debate to Rest

There are 2 interrelated factors that show up in almost all studies and reports on the impact of piracy on sales and they are the “displacement rate of piracy” and “audiences’ willingness to pay”

Displacement Rate:  A study of the recent top box-office hits reveals that for every 10 movies watched illegally 4 fewer movies are watched legally, which means there is a displacement rate of 40%.  These displacement rates translate to 5% less sales or revenue. Tidbit:  Piracy competes more with theatre tickets than it does with downloads.

Audiences’ Unwillingness to Pay: A study also revealed that 4 out of 5 consumers were unwilling to pay the market rate for film and TV shows.  If they could watch something for free, they would.

These 2 data points imply that piracy impacts sales either by displacing potential consumption or directing audiences to unlicensed free content for those unwilling to pay market prices.

The Third Dimension

The cultural aspect of piracy:  The society at large doesn’t see viewing pirated content as something immoral or illegal.  Societies increasingly condone piracy on different ideological grounds.  An average consumer accessing pirated content with a simple Google search without any qualms or reservations about watching pirated content does really impact sales and revenues.

Piracy is no longer confined to tech-savvy users and the dark web. It is a digital product like any other and is impacting sales by billions of dollars.

Does Piracy Impact Sales?

What Should the Content Owners Do?

Piracy if not effectively dealt with could sound like a death knell for the media and entertainment industry.

Content owners should partner with a company that is at the forefront of fighting digital piracy in all its forms and has been successful at it; AiPlex is one such. 

Just drop us a line and we will formulate a plan that is customized just for you.

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