Could ebook piracy boost sales?

Piracy is the bane of the digital content business, whichever way you look at it. If it didn’t happen, content producers wouldn’t spend so much time and effort pursuing it in a fashion that is almost as ethically dubious as the act itself. And if producers didn’t go to such lengths to protect their content, it’s likely piracy would be less of a problem.

Content publishers, be they music producers, movie studios, newspaper companies or book publishers, all seem to be virtually unanimous in their view that piracy is bad for business. These industries, via industry organisations like the RIAA, have spent millions of dollars trying to pursue illegal downloaders and ‘educate‘ people that piracy is bad through advertising.

Despite all this, people continue to pirate content. This in itself proves nothing except that people are greedy and willing to go to great lengths to get free stuff. Ethical problems aside, however, there is mounting evidence that piracy might actually encourage sales of certain digital products.

In a recent interview with Forbes Magazine (titled ‘Steal This E-Book’) Tim O’Reilly, founder and CEO of O’Reilly Media, explained this argument:

… let’s say that if by putting DRM in it I sell 10,000 copies and I make my money, and if by having no DRM 100,000 copies go into circulation and I still sell 10,000 copies. Which of those is the better outcome? I think having 100,000 in circulation and selling 10,000 is way better than having just the 10,000 that are paid for and nobody else benefits.

The argument is basically this: the people who pirate content are not necessarily customers who were it otherwise would have paid money for what they downloaded. Given this, content producers can’t count each pirated download as a lost sale. If this is the case, in what way should content producers consider piracy?

Are content consumers who are not paying for content adding value? O’Reilly would argue they are. Utilising social networks and good old fashioned word of mouth, people who read pirated content help sell ebooks, in much the same way lending books and secondhand book stores help sales of paper books.

O’Reilly is not saying that piracy never hurts content producers, however. He argues that the damage is mostly focused on people (in this case authors) who have a ‘very desirable product’. We’re talking big name authors here who sell hundreds of thousands (if not millions) of copies. O’Reilly has actually written a paper about this called ‘Piracy is Progressive Taxation’, in which he posits that the trade-off from making content more available and visible is that the most desirable products are pirated more often (in the same way that tax brackets should – in theory at least – take more from the wealthy than the poor).

In a similar way, the exposure that you get from free content actually helps drive visibility and awareness for people who are unknown. So we’ve always sort of taken the approach that on balance it’s OK, and we’ve also taken the approach that it’s more important to establish social norms around payment. The way that you do that is by honoring people and respecting how they act, people pay us because they know that if we don’t get paid we don’t do what we do.

This business model seems quite flawed to the kind of publisher who stresses out every time one of their author’s books is discovered on a filesharing website. But there’s more than a grain of truth to it. Books in particular have always been a product that has subsisted on passion: passion from its producers (be they authors or publishers), passion from its sellers and passion from its consumers.

At the very least this issue deserves re-evaluation. Particularly at the low-end of publishing, as book publishers face increasing cuts to their midlist and more authors are dropped. In the case of these authors, at the very least, publishers and agents need to be forward thinking about piracy. As O’Reilly says: “If people wanted 10,000 pirated copies of a book, the publisher and the author would be very, very well off. If 10,000 people are willing to pirate it, there’s a very large number willing to pay for it.”

Is Piracy a Legitimate Part of our Culture?

For my fiftieth post (yes, my fiftieth!), I’d like to revisit a topic close to my heart. Piracy. In the world of digital content, piracy has been around longer than most legitimate forms of digital purchase. Anyone who claims to have been reading ebooks since they had a Palm Pilot probably at some point acquired illegal digital books. Piracy is at the forefront of innovation when it comes to distribution and accessibility and yet, because it clashes with most of our current economic models, it is considered a Very Bad Thing.

So my question for today – can piracy ever be good? Is piracy a legitimate part of our culture? Are the old economic models broken? Like almost every question I post up on this blog, I don’t have an answer. But I think there are lots of reasons why people rush to defend piracy (and it’s not just because pirates are cool).

First of all, there are lots of reasons why people pirate things. I think most of those reasons are not that defensible from a traditional ethical standpoint. That is, people don’t like to pay for things they don’t have to. Piracy enables people with a certain level of technical expertise to not have to pay for things they want. This is the most basic reason for piracy, and it’s the most basic reason why anti-piracy groups want to stop them. On the one hand you’ve got a group of people technically able and willing to get things they want for free, and on the other hand a group of people making things who want to be remunerated for that.

The problem occurs not because one of these urges is unethical and the other isn’t. Or even because the former precludes the latter. The problem is that most of our cultural industries view a pirated thing as exactly the same as a stolen thing – or more importantly – as a lost sale. However, it’s evident to anybody who has ever pirated anything that this isn’t the case. Making a digital copy does not mean that you are depriving someone else of that thing. People who pirate things still buy things. And a person who pirates something wasn’t necessarily ever going to buy it. Piracy, from numerous studies, doesn’t even seem to affect legitimate sales one way or the other.

So if piracy is done for the wrong reasons, but the consequences aren’t bad – what is it? I prefer to think of it as a form of unpaid, uncontrollable viral marketing. It’s clear that the most successful books are also the most pirated. And anyone who has ever tried to sell a good book will know that the best way to boost sales is to get more people reading that book – through the always-elusive word of mouth. Piracy is dodgy, but it is also the most efficient way to distribute a digital product. And so long as there is an easy-to-use, affordable, legitimate alternative to piracy, most people will still prefer to buy it. And for those in-between cases, like people with disabilities, library sharing and proof copy distribution (problems that have yet to be solved by traditional publishers in regards to ebooks) – the availability of illegal copies means that those people who wouldn’t or couldn’t otherwise read your book will be able to do so. To quote the excellent Tim O’Reilly, e-publisher: “Obscurity is a far great threat to artists than piracy.”

So the way to fight piracy, then, isn’t to try and make people who pirate things feel guilty. If they felt that guilty about it, they probably wouldn’t have done it in the first place. It’s also ethically iffy to sue people for lost sales when they’ve pirated content, as it isn’t clear that all of that content would have been purchased if it hadn’t been acquired illegally. I also don’t see the point in locking up digital purchases with DRM, as it unfairly punishes those of us who buy things legally, and makes piracy a more attractive option. At its best, book piracy is a way of getting people talking about a book who wouldn’t otherwise be reading it. At its worse it’s a bunch of dodgy people whose technical expertise and lack of ethics means that you’ll never be able to stop them getting hold of your product without paying anyway.

What do you think? I’d especially love to hear from authors who have seen their own books end up on filesharing websites. Do you see it as a good or bad thing? How would you prefer your publisher deal with the issue of piracy? And for everyone else: have you ever pirated a digital something? How would you defend your choice to do so?