French piracy cut by roughly half, entertainment revenue still falling

Matthew DeCarlo

Posts: 5,271   +104

A year and a half after implementing its controversial graduated response program, France's anti-piracy authority claims to have drastically dented illegal filesharing. The report contains peer-to-peer usage data from multiple researchers, with each producing different figures.

Nielsen recorded a 17% decline in P2P activity through 2011, NetRatings cites a 29% dip, Peer Media Technologies claims there was a 43% drop and ALPA reports a 66% fall. Each outfit uses different methodologies, so it's hard to quantify the change in illegal downloads.

However, there's an obvious downward trend, especially when comparing France to global figures, which have remained relatively flat according to Peer Media Technologies. Hadopi's impact is also seen in other user behavior, such as after they receive a strike.

It's said that 95% of those who received one strike don't get another, 92% of those who received a second strike cease illegal activity, and 98% of those who received a third strike stopped too. While that may be impressive, we imagine some of those users find workarounds to slip through Hadopi's grip. It might be interesting to see whether VPN services have experienced a boost in revenue from French customers.

Between October 2010 and December 2011, the graduated response system targeted 65,848 people. Of the first-strikers, 6% contacted Hadopi, while that jumped to 25% and 71% for second- and third-strikers. Most of them reportedly commited to stopping filesharing or to securing their network. In survey of 1,500 people aged 15 and up, 71% of P2P users said they'd stop downloading illegally if caught by Hadopi.

The paper offers two graphs (pages seven and eight) drawing parallels between the decline of activity on filesharing sites such as Megavideo, Hotfile and Rapidshare, and the increase of activity of kosher services such as iTunes, Beezik and Imineo. It should be noted that although Megaupload shows a slight increase in activity, the service was shut down on January 19, 2012 and the data ends in December 2011. 

For all the positives highlighted in Hadopi's report, TorrentFreak raises an interesting contradiction. The entertainment industry has long asserted that digital piracy is the primary cause of declining revenue. Despite cutting said piracy in half through 2011, France's music industry saw a 3.9% drop in revenue from the prior year, while the movie industry's revenue fell 2.7%. Is piracy's effect on revenue overstated?

**Image via Nomad_Soul/ShutterStock

Permalink to story.

 
TorrentFreak conveniently misleads people with their version of the statistics. Guess they didn't notice the "French digital music industry grew by 25 percent," or "download revenues grew by 18.4 percent" part.
 
I'm sure the entertainment industry will find a way to fudge the figures and make it look like their revenue is increasing as piracy falls. They've been messing with the numbers for years.
 
One could argue that your statement is also misleading. Legal downloads are on the rise, but that's beyond the point: overall revenues are down. The industry blames falling revenue on piracy, but when piracy is chopped in half it doesn't seem to boost revenue. Legitimate digital services are growing, but not fast enough to offset other losses.

To me, that says users are interested in digital media, but because the industry has been slow to provide competent online services, many people resort to filesharing. It also implies to me that when users are contacted by Hadopi, they either find an illegal workaround or just go without because they can't get content how they want it legally.

And before we run in circles about how piracy is evil, I'm not condoning it, nor am I saying it's right or that content creators don't deserve to be paid. I'm just observing the obvious: the growth of digital media is being hindered by industry titans clinging to old business models and consumers are filling the demand by whatever means they can.
 
File sharing is the way of the future. Anyone who fights it is an enemy of the people and justice. The government should serve the people, not the greedy wheels of corruption.
 
I agree with some of your thoughts Matthew, but looking at those statistics, they all point to an increase in legitimate business dealings and huge growths in online transactions. It didn't say that revenues were down 3.9%, but that "overall recorded music market falling by 3.9 percent in 2011." That could mean anything - even that there was 3.9% less music released in 2011. And of course TorrentFreaks is going to take that 3.9% quote and run with it to "prove" that stealing isn't harming the industry.

At any rate, I understand there's still significant frustration for obtaining digital media in a variety of fronts. For example, I'm pissed off that the only options available to me to watch the new "Game of Thrones" episode is either to subscribe to HBO, or go find it illegally somewhere. At least until it's been out for several months and finally released on DVD. I'd be perfectly happy to cough up $2.99 to watch the episode via some service. But that's not an option right now and I think the industry is losing a lot of sales as a result of that lack of option.
 
I agree with some of your thoughts Matthew, but looking at those statistics, they all point to an increase in legitimate business dealings and huge growths in online transactions. It didn't say that revenues were down 3.9%, but that "overall recorded music market falling by 3.9 percent in 2011." That could mean anything - even that there was 3.9% less music released in 2011. And of course TorrentFreaks is going to take that 3.9% quote and run with it to "prove" that stealing isn't harming the industry.

It seems to me that it's referring to revenue when you read the full sentence instead of focusing on the latter half: "Internet music growth was insufficient to offset falling sales of music on physical supports, down 11.5 percent to EUR 412 million, with the overall recorded music market falling by 3.9 percent in 2011." Also, I don't think anyone is trying to prove that piracy isn't harmful (and no, the law doesn't classify piracy as "stealing" -- it's copyright infringement). Instead, I think TorrentFreak is trying to illustrate what I mentioned before: the industry is taking its sweet time adapting to a Web-connected world, and their rhetoric blaming piracy for losses isn't true, or isn't depicting the full story at least.
 
Revenues are falling because people don't like overly-aggresive corporation's hunting them down and forcing them to pay. The old fools that lead the entertainment industry are willing to THROW AWAY millions in stupid advertising when they could be saving money allowing pirates to share it for free. They actually will end up with more in the end (no money spent on advertising) and still find people that are willing to support their artists. Tech N9ne is a perfect example. He would tell people to download his stuff, and so they did. Now people still download his stuff, but at the same time people are WILLING to pay for multiple copies of an album to "support their artists". He's now the most sucessful indepentent music artist in the world, and many are chosing to adopt his methods. Now compare that to the entertainment industry's approach to hunting people down, charging them with ridiculous fines and otherwise slandering and prosecuting their fan-base. Fans don't like that, so they will stray away from these artists and their supporting labels. Analogically put, Entertainment industry is the aggresive boyfriend who thinks being demanding, confrontational and punative will cause their significant other to be become obediant, loyal and generous, when in reality it forces them in the opposite directions.
 
TomSEA said:
TorrentFreak conveniently misleads people with their version of the statistics. Guess they didn't notice the "French digital music industry grew by 25 percent," or "download revenues grew by 18.4 percent" part.

So you are saying they are just like any other news portal then? Name one that isn't biased in some way.
 
"Lies, damn lies, and statistics," pretty much sums up both sides of these argument. I find it hard to believe that at least a few people have not turned to legal downloads. However does this outweigh the cost of implementing this policy, or even the invasion of privacy? I doubt it very much.
 
Agreed. I read a stat that said the loss in revenue is minimal because the only people actually pirating are those who can't afford to buy it anyway.
 
Stealing has become a way of life for many people. It is a social sickness. They do not understand that it is wrong so they will keep on doing it.

Most American films and series are BS anyway so even good people don't see the need to buy rubbish.

If the product is good some people will buy it. Oh and the global economy is kinda in the pooper so go figure.
 
Loved the $8billion ipod vid.

Firstly what we see here is France surrendering before anyone else. American capitalism and its mathematical genius (see above video for the horse crap they shovel into the media the propaganda they use to back up their arguments).

American capitalism shouts its angry chants of war on piracy. And France just hears the word war, immediately surrenders. They may of had a "Resistance" but they have already had 2 letters from Hadopi and disbanded.

Secondly, piracy cut in half and revenue still falling ...

I could see this happening if people are happy to go without. And why wouldnt they be happy to go without. Free is fine. Paying for a Cd with 2 good songs and the rest mediocre waffle... paying for another movie youve already seen 20 times before... originality or a true wow factor, is few and far between.

But also another thing to consider, Is the try b4 you buy theory. There are people who buy the products they obtained through p2p networks. So just because 100 copies of the latest no.1 on snagthistorrent were taken doesnt necessarily mean that no one went out and bought it. So the figures and losses these fat cat companies claim can never be accurate right ?
 
I think what it goes to show is that ppl will police themselves given the opportunity. As long as it was "Free" stealing, then everyone was doing it. Kinda like back in the 70-80's on newspaper vending machines. You would pay your .25-.50 cents and open up the vending box and some ppl would take more then 1 paper. Once they made ppl aware of how it was stealing it dropped off. This is kinda close as a parabole. Ppl in France have been informed that it is stealing and someone is watching you steal.
It doesnt matter if you agree with the Law, its the Law good or bad. Doesnt make sense to continue "stealing" if they are watching for you to steal.
 
This goes with what I've been saying for years. Just because people can't get something for free DOES NOT mean they will pay for it. Maybe the entertainment industry should work on making good products that people WANT to buy instead of making crap then suing the people who don't want to pay for it.
 
MyName
-----------
And what if the peer-ates do not have enough money to buy several movies per month and they rather stopped watching `em ?
The same goes for the pirated software - who would buy Photoshop if he needed to use it for editing of several pictures at home or at work ?
I guess that nobody - they rather would download 'The GIMP'.
And by stopping watching movies, the people will have more time for social life, skiing and other activities.
 
Guest said:
File sharing is the way of the future. Anyone who fights it is an enemy of the people and justice. The government should serve the people, not the greedy wheels of corruption.

Dream on.
 
This is just proof that most people who illegally dowload wouldn't buy it anyways. Who wants to spend 20$ on a cd that has two good songs on it? Or 20$ on a dvd that has 20 minutes of previews you can't skip. Not to mention the entertainment industry is garbage nowadays anyways. They'll make more money if they make piracy legal unless whatever it is being downloaded sucks. In my opinion its a great process. It'll weed out all the garbage thats out there. True artists shouldn't care about the money anyways.
 
Guest said:
This is just proof that most people who illegally dowload wouldn't buy it anyways. Who wants to spend 20$ on a cd that has two good songs on it? Or 20$ on a dvd that has 20 minutes of previews you can't skip. Not to mention the entertainment industry is garbage nowadays anyways. They'll make more money if they make piracy legal unless whatever it is being downloaded sucks. In my opinion its a great process. It'll weed out all the garbage thats out there. True artists shouldn't care about the money anyways.
But most of us would like to get paid for doing what we like to do and the effort we put into doing it xD
 
...[ ]...Also, I don't think anyone is trying to prove that piracy isn't harmful (and no, the law doesn't classify piracy as "stealing" -- it's copyright infringement).....[ ]....
Yeah well, "a rose is a rose is a rose"! I'm not moralizing, condoning or condemning "piracy", but I'm really sick of semantic games about what it is.

Copyright infringement is de facto theft, since the term for "theft of intellectual property" is, "copyright infringement".

The bull crap from the posters, sanctimony of the anti-pirating propagandists, and fractured legal definitions that always seem to prevail in these threads, have more spin applied than a Chanukah Dradle
 
Back