Piracy losses fabricated - Aussie study



Lies, damned lies, and statistics
By Thomas C Greene in Dublin → More by this author
Published Thursday 9th November 2006 13:27 GMT

A draft study commissioned by the Australian Attorney General’s office finds that the music and software industries attributes sales losses to piracy without any evidence to back their claims, The Australian reports.

According to a draft report by the Australian Institute of Criminology, the music industry can’t explain how it arrives at its statistics for staggering losses through piracy. The Business Software Association’s claim of $361m per year in lost sales is “unverified and epistemologically unreliable”, the report says.

“Of greatest concern is the potentially unqualified use of these statistics in courts of law,” the authors observe.

According to The Australian, the study is due to be revised after the institute’s senior members disagreed with its conclusions. “We have an extensive quality control system in the institute, so that drafts are read by most senior staff,” principal criminologist Russell Smith told the paper.

It will be interesting to compare the final revision with the current draft to learn if the language is merely softened or if the aforementioned “quality control system” should involve reaching conclusions that the report’s purchasers would prefer. ®


[B]Piracy stats don’t add up[/B]
Simon Hayes
NOVEMBER 07, 2006

PIRACY statistics are labelled "self-serving hyperbole" in a draft government report. 	
A confidential briefing for the Attorney-General's Department, prepared by the Australian Institute of Criminology, lashes the music and software sectors.

The draft of the institute’s intellectual property crime report, sighted by The Australian shows that copyright owners “failed to explain” how they reached financial loss statistics used in lobbying activities and court cases.

Figures for 2005 from the global Business Software Association showing $361 million a year of lost sales in Australia are “unverified and epistemologically unreliable”, the report says.

BSAA chairman Jim Macnamara said the figure was an extrapolation, but other studies had supported it.

“They’re entitled to say they’re not convinced, but not necessarily entitled to say it’s unverified,” he said.

The study, which says some of the statistics used by copyright owners are “absurd”, will be redrafted after senior researchers disagreed with its conclusions.

Painting a picture of an industry seething with competitive jealousies, the report describes how “well-connected Canberra-based lobbyists” fight for government attention and police time on piracy.

Researcher Alex Malik, working for the AIC under a commission from the Attorney-General’s Department and IP Australia, was particularly critical of the use of statistics in court.

“Of greatest concern is the potentially unqualified use of these statistics in courts of law,” the draft reads.

Mr Malik declined to speak to The Australian, citing a confidentiality agreement.

Institute principal criminologist Russell Smith said the report was an early draft that was being edited by the agency.

“We wouldn’t use language like that because it’s not accurate, it’s hyperbolic and overblown,” he said.

"It was a very early draft written by a consultant, and we would want a chance to revise it.

"We have an extensive quality control system in the institute, so that drafts are read by most senior staff.

“The report hasn’t been finalised. It’s still being edited and revised.”

Copyright owners have lobbied for several years to have a study done, hoping their figures will result in more law enforcement action on piracy.

The report, intended as a confidential government briefing, casts doubt on the methodology of some industry piracy studies.

It says the manager of the recording industry’s anti-piracy arm, Music Industry Piracy Investigations, did not know how piracy estimates were calculated, as that work was done by the International Federation of Phonographic Industries in London.

Copyright owners often use street-value estimates to calculate losses, but this assumes that every person who bought pirated goods would otherwise have paid for a legitimate item, the report notes.

MIPI manager Sabiene Heindl defended the figures, which she said were based on local survey, research and seizure statistics, but compiled in Britain.

“The reason I wasn’t personally aware of how they are prepared is because they are compiled by the IFPI,” she said.

“They have a group that has been doing this for some time.”

Ms Heindl said the report was not intended to be made public.

“We haven’t had an opportunity to see the report,” she said.

“My understanding is it wasn’t to be a public document and that any submissions were to be considered confidential.”

The most recent locally commissioned study was in the late 1990s, Mr Macnamara said.

Many copyright holders claimed links between piracy and organised crime, but AIC researcher had found nothing to support that view.

“Either there is no evidence of any links between piracy and organised crime or it is simply beyond the capacity of rights holders to identify these links,” he wrote, adding that he was concerned about the way piracy figures were being used.

"It is inappropriate for courts and policy makers to accept at face value currently unsubstantiated statistics.

“Either these statistics must be withdrawn or the purveyors of these statistics must supply valid and transparent substantiation.”

Some industry groups were reluctant to work with researchers, because of concern about data leaking to competitors.

Much of that has to do with a fight over access to resources.

“There is a perception among some rights holders that they are in competition with each other over limited federal government resources,” the report says.

“They fear that if they reveal the nature of their relationships with government, such as the placement of well-connected Canberra lobbyists, they will jepordise their advantage.”


[B]Music sharing doesn’t kill CD sales, study says[/B]
Researchers at Harvard and the University of North Carolina say music swapping isn’t to blame for falling music revenue, and might even help sell CDs.
By John Borland
Staff Writer, CNET News.com
Published: March 29, 2004, 3:58 PM PST

A study of file-sharing’s effects on music sales says online music trading appears to have had little part in the recent slide in CD sales.

For the study, released Monday, researchers at Harvard University and the University of North Carolina tracked music downloads over 17 weeks in 2002, matching data on file transfers with actual market performance of the songs and albums being downloaded. Even high levels of file-swapping seemed to translate into an effect on album sales that was “statistically indistinguishable from zero,” they wrote.

“We find that file sharing has only had a limited effect on record sales,” the study’s authors wrote. “While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing.”

The study, the most detailed economic modeling survey to use data obtained directly from file-sharing networks, is sure to rekindle debates over the effects of widely used software such as Kazaa or Morpheus on an ailing record business.

Big record labels have seen their sales slide precipitously in the past several years, and have blamed the falling revenue in large part on rampant free music downloads online. Others have pointed to additional factors, such as lower household spending during the recession, and increased competition from other entertainment forms such as DVDs and video games, each of which have grown over the same time period.

Executives at file-sharing companies welcomed the survey, saying it should help persuade reluctant record company executives to use peer-to-peer networks as distribution channels for music

“We welcome sound research into the developing peer-to-peer industry, and this study appears to have covered some interesting ground,” said Nikki Hemming, chief executive officer of Kazaa parent Sharman Networks. “Consider the possibilities if the record industry actually cooperated with companies like us instead of fighting.”

The study, performed by Harvard Business School associate professor Felix Oberholzer and University of North Carolina, Chapel Hill associate professor Koleman Strumpf, used logs from two OpenNap servers in late 2002 to observe about 1.75 million downloads over their 17 week sample period.

That sample revealed interesting behavioral, as well as economic, data. Researchers found that the average user logged in only twice during that period, downloading about 17 songs. Some people vastly overshot that average, however–one user apparently logged in 71 times, downloading more than 5,000 songs.

The two professors narrowed their sample base by choosing a random sample of 500 albums from the sales charts of various music genres, and then compared the sales of these albums to the number of associated downloads.

Even in the most pessimistic version of their model, they found that it would take about 5,000 downloads to displace sales of just one physical CD, the authors wrote. Despite the huge scale of downloading worldwide, that would be only a tiny contribution to the overall slide in album sales over the past several years, they said.

Moreover, their data seemed to show that downloads could even have a slight positive effect on the sales of the top albums, the researchers said.

The study is unlikely to be the last word on the issue. Previous studies have been released showing that file sharing had both positive and negative effects on music sales.

The Recording Industry Association of America was quick to dismiss the results as inconsistent with earlier findings.

“Countless well-respected groups and analysts, including Edison Research, Forrester, and the University of Texas, among others, have all determined that illegal file sharing has adversely impacted the sales of CDs,” RIAA spokeswoman Amy Weiss said in a statement. “Our own surveys show that those who are downloading more are buying less.”


Oh well, we all grow up one day and listen to other people, which are intelligent, right? Right?

Or perhaps, the Axiom is true … Ignorance is bliss :stuck_out_tongue:


One of the reasons I no longer buy music CD’s as much as I used to is the lack of music to my particular taste. This is due mainly to the big record labels casting around for the next big sound that will make them millions. Most industries are heavily influenced by the bean counters and this years bottom line. Until they see what this is doing to their business and start looking for talent instead of trying to manufacture it they will continue to decline.
Gone are the days of the 60-70’s and early 80’s where a large number of talented musicians wrote and performed their own work in such quantity it was hard to keep up buying the music you liked as there was so much of it released almost daily.
Some of the big labels have screwed the performers in the past such that now with the internet and broadband, musicians are turning to this media to showcase their talent and make money.
I prefer to buy a CD rather than download from the net, something I’ve yet to do.