UK Movie Pirates Spend (Way) More at The Box Office

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This week UK communications regulator OFCOM published a report which concludes that one in six UK citizens has pirated digital goods online. The same report reveals that movie, music and TV-pirates who pay for entertainment, spend much more than average consumers. This is yet another study that comes to this, for some, counter-intuitive conclusion. But does this mean that piracy isn't hurting the entertainment industry? If not, what does it mean?

sparrowAnother week, and another report has appeared showing that pirating consumers spend more money on entertainment than average buyers. This time it comes from the UK.

The UK communications regulator OFCOM published a comprehensive survey into the piracy habits of the UK population. A survey among 4,400 Internet users aged 12 and up resulted in an elaborate 94-page report which will aid in shaping future copyright law.

Overall the researchers find that 16% of the respondents had downloaded at least one item illegally, and a quarter of this group said they only consumed pirated content. This means that three-quarters of the self-confessed pirates are “hybrids” as they also pay for digital content.

This group of hybrid pirates make up 12% of the UK population and the report reveals that these people are spending up to three times as much on legal purchases than buyers who don’t pirate anything at all. In addition, the same group puts a higher value on various entertainment products.

Here are the results for the movie, TV and music purchases over a three-month period. The numbers represent the spending on all goods in the relevant category, meaning that box-office tickets, concerts, DVDs, CDs and merchandise are also included.

The results clearly show that across all categories hybrid pirates are the biggest spenders. Most of the money is spent at the box-office, concerts and on DVDs for the movie, music and TV category respectively.

Compared to those who buy only “legal” content these pirates spend more on movies (£35.57 vs £56.11), music (£43.31 vs £77.24) and TV (£8.28 vs £25.69). The third group, those who only download illegally (4% of the population), spends the least.

In addition to actual spending the survey also asked respondents how much they are willing to pay per movie or music track.

Here, the hybrid pirates also put a higher value of individual purchases than regular buyers. A music track is worth 76p to them compared to 72p to those who only buy legally. The same difference is true for movies, when the value hybrid pirates put on film downloads is £4.92, compared to £3.74 for the average consumers.

So what does this mean?

As discussed many times in the past, a likely explanation is that pirates who also buy content through legal channels are the most engaged. They buy a lot, and when they run out of money they pirate instead. Even the RIAA seems to agree on this.

The question is how much they, and the 100% pirates, would have bought if piracy did not exist. Would it be significantly more? Or is it perhaps possible that some of the hybrid pirates become so engaged because they are able to download illegally as well? A bit of both maybe?

The classic stance of the music industry is to point to the massive decrease in recorded music revenues since the early 2000s, claiming that piracy is to blame. But if this is true then why was the live revenue skyrocketing during the same period? And what about the sharp increase in box office revenues during the past decade?

Ultimately the true antidote for piracy doesn’t lie in harsher punishments. There’s no point in seizing a laptop of a 9-year old or criminalizing your best customers. What makes more sense is to better understand the needs of consumers and make sure every barrier to legal consumption goes away.

This is also reflected in the OFCOM report. Aside from the obvious financial benefits, most people said they downloaded illegally because it’s convenient (48%) and quick (44%).


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