Thought study: What happens if piracy becomes legal?

[General Zod]

But it keeps the majority from pirating.

Maybe for software, but for movies and music? I doubt it. Once the vast majority of movies or songs hit the sharing sites they've already had their DRM stripped and converted for easy consumption, so I figure they'd largely continue on their current course but with less government takedowns of existing sites.

[SirNitram]

This wanders a bit far into pure speculation. The implication other big businesses would get into it I find iffy; generic pills sell because the brand names are expensive as hell(And at least one state mandates filling prescriptions with generics if possible), but I can't really see Copying Houses, especially since the original producers can use their warchests to simply buy them outright.

[Xon]

That's actually not the case when you look closer at the numbers, and how studio profit breaks down. Sure, a small handful of the very biggest pictures make money at the box office (sometimes - all of them have huge marketing costs that have to be paid off first), but most big budget films don't make back their costs in theaters.

Hollywood accounting (otherwise known as legalised fucking fraud) means most movies never make a profit on paper. The Lord of the Ring trilogy is a classical case of the on-paper profit was a fraction of the profits recieved by the publishers.

[Kanastrous]

I'm not sure why the OP contains the proviso regarding the content's origin as a 'legal copy' (ie every distributed copy is okay so long as it's ultimately derived from a 'legal copy') since with the exception of stolen and copied works-in-progress and camcorder'ed-offa-the-theater-screen versions, pretty much all of the pirated content already originates from 'legal copies' as it is, right? Whether a flood of illicit copies started with a 'legal' vs 'illegal' master seems pretty irrelevant; whatever losses the copyright owner wants to try and claim aren't significantly affected by the over-the-counter price of the ONE master required to get the ball rolling...

Numerically speaking the largest group to suffer losses will probably be the working people involved in motion picture production: health and retirement plan funding for the various craft Guilds and Unions are tied to signatory producing entities' revenues. The Producers' Guild has been eagerly whittling away at everything in sight with each new Contract negotiation, in times of record revenues. Given the excuse of genuinely curtailed sales, they'll be charging the negotiating table with hatchets.

[Guardsman Bass]

That's actually not the case when you look closer at the numbers, and how studio profit breaks down. Sure, a small handful of the very biggest pictures make money at the box office (sometimes - all of them have huge marketing costs that have to be paid off first), but most big budget films don't make back their costs in theaters.

Hollywood accounting (otherwise known as legalised fucking fraud) means most movies never make a profit on paper. The Lord of the Ring trilogy is a classical case of the on-paper profit was a fraction of the profits recieved by the publishers.

That doesn't change my point. Here's why-

They set the film up as a separate corporation. Then, when the studio's cut of the box office gross starts coming in (it averages around 55% overall, IIRC), they subtract Prints & Advertising costs first. These alone can drain a movie if they're extremely expensive (and marketing for the big-budget films always is).

After that, the most important players subtract their cut from the revenue, along with the distributor taking a hefty distribution fee (about 30% from Harry Potter 5, for example), followed by on-paper production costs and everyone's else points at different levels of break-even. The result is that most films don't show a profit on paper, but for the studio-distributor to make a profit just off of the theater box office returns, they have to take back enough in their distribution fee cut to cover the actual amount of money that they spent making the movie (not the amount on paper, which shows up on the movie's balance sheet and is usually higher than what they actually are).

Quite often, the studios don't make enough money just off their cut of the box office gross to cover the actual production costs, so they're dependent on the "back end" (merchandise, DVD/blu-ray, licensing to cable movie networks like HBO, etc) to make a profit off of a film. A handful of the very biggest films pull it off, but most often they don't (look at Prince Caspian for example, which is why Disney and later Fox were riding Walden Studio's ass so hard to keep the production costs down for Dawn Treader).

[Shroom Man 777]

A pirated DVD in the Philippines costs around $1USD more or less, and when the original real DVDs are released, the piraters will rip those real DVDs and the pirated DVDs will be just as good as them in terms of quality, unless they use esoteric methods like blueray.

In a land where pirated DVDs are available everywhere, namely the Philippines, people buy pirated DVDs all the time. I don't know anyone who buys normal original DVDs at all.

Well, except myself, but I just bought the Blade Runner superspecial edition because I'm a fatty nerd.

The best thing about it is that poor people who otherwise can't afford to buy fancy DVDs can end up buying them, thanks to piracy. Thanks to China, they can also buy very cheap DVD players too.

It's a very elegant solution for a relatively impoverished country like the Philippines, where poor people can only afford cheap shit. It might be different in America, but that's because everything there is overpriced, from the food you eat to the air you breathe.

So, in regards to the question of:

Which would you rather have, a pirated DVD with the normal downsides, or the proper one with deleted scenes and so forth?

This question is answered each and every time a Filipino goes and buys a pirated DVD, so casually as if it is just another part of life. Because it is (pirated DVDs is another part of Filipino life).

I mean, this is even counting the fact that pirated vendors risk getting raided by cops, it doesn't change the fact that they are still everywhere.

God I love my country. God's most beautiful creation.

[Kanastrous]

You're not fatty. You're just well-marbled.

[Ilya Muromets]

In addition to the points mad e above, I don't even think legalized piracy will affect sales of official releases all that much either. Downloading a few games, movies, or songs maybe be one thing; but what about people who want box sets and albums? Downloading, say, and entire season is still gonna take an enormous amount of time even if you have a fast connection. Many people simply don't have the patience to sit and wait for the download, especially if it slows down everything else. Why bother when all you need to do is drop by the local store and spend a few bucks? Sure, piracy my be free, but many people can stand to spend a few bucks on something if it's faster and more convenient.

I mean, this is even counting the fact that pirated vendors risk getting raided by cops, it doesn't change the fact that they are still everywhere.

The raids don't even happen all the time. Mostly only when a local politician or police official wants a public display for media purposes. There rest of the time, the cops buy pirated stuff from the vendors entirely without shame.

[Shroom Man 777]

You're not fatty. You're just well-marbled.

Phew. I thought I lost them.

But ja, the Philippines is example of "what if piracy becomes legal" in actual function. It's wonderful!

[MKSheppard]

Many people simply don't have the patience to sit and wait for the download, especially if it slows down everything else. Why bother when all you need to do is drop by the local store and spend a few bucks? Sure, piracy my be free, but many people can stand to spend a few bucks on something if it's faster and more convenient.

I wandered over to The Pirate Bay, and the HD version of "The Pacific" is about 57.52 GiB. That's...about 22 hours solid of downloading at 700 kb/sec where you essentially can't do anything on the internet due to ZOMG TORRENT taking over your bandwidth.

Yes; I realize that there are people who can gain 15-50 MB/sec or so download speeds, but those cost $50 to $150 a month; and 57 GB takes a hefty hit out of a basic 200 GB/mo plan.

Also, there's the fact that the ease and speed of obtaining a pirated copy on the intertubes is directly related to it's popularity. You can find Star Wars on the intertubes easier than a random film nobody's heard of.

[Kanastrous]

I assume that one doesn't have to download the entire 57+ gigs (that's the whole series, right?) at once, though - seems like downloading episode-by-episode would be a lot more convenient. And put a lot less stress on your plan.

[General Zod]

In addition to the points mad e above, I don't even think legalized piracy will affect sales of official releases all that much either. Downloading a few games, movies, or songs maybe be one thing; but what about people who want box sets and albums? Downloading, say, and entire season is still gonna take an enormous amount of time even if you have a fast connection. Many people simply don't have the patience to sit and wait for the download, especially if it slows down everything else. Why bother when all you need to do is drop by the local store and spend a few bucks? Sure, piracy my be free, but many people can stand to spend a few bucks on something if it's faster and more convenient.

Who needs to sit and wait? Just start up the download, go to work and it's done by the time you come home. Whenever someone downloads a 15gb Steam game do you think they just sit and wait for it to actually finish or do you think they go and do other stuff?

[Ilya Muromets]

Who needs to sit and wait? Just start up the download, go to work and it's done by the time you come home. Whenever someone downloads a 15gb Steam game do you think they just sit and wait for it to actually finish or do you think they go and do other stuff?

Should've worded it better. I didn't literally mean that they sit and stare slackjawed at the slowly-crawling download bar. i meant the people who try to do other things on the Net while it downloads. Some people apparently do that, at least enough for me to see several threads filled with nothing but people complaining about how they're "back to dial-up speeds" or whatever in other places. Then there are people who are anal about not leaving their computer on unattended for extended periods of time.

[General Zod]

Who needs to sit and wait? Just start up the download, go to work and it's done by the time you come home. Whenever someone downloads a 15gb Steam game do you think they just sit and wait for it to actually finish or do you think they go and do other stuff?

Should've worded it better. I didn't literally mean that they sit and stare slackjawed at the slowly-crawling download bar. i meant the people who try to do other things on the Net while it downloads. Some people apparently do that, at least enough for me to see several threads filled with nothing but people complaining about how they're "back to dial-up speeds" or whatever in other places. Then there are people who are anal about not leaving their computer on unattended for extended periods of time.

It's not like you'd have to go for the highest quality version by default anyway unless you're completely fat. There's always going to be more than one flavor available. I mean hell, I only have an 8mb cable plan and I can do other stuff just fine if I've got massive Steam downloads going.

[Lagmonster]

Whether a flood of illicit copies started with a 'legal' vs 'illegal' master seems pretty irrelevant; whatever losses the copyright owner wants to try and claim aren't significantly affected by the over-the-counter price of the ONE master required to get the ball rolling...

I was thinking more of the obvious "copies of unreleased stuff stolen from studios and spread on the net prior to official release date are illegal" bit. It was the only way I could think of to ensure that the catalyst of the wave of copying would in fact be the artist or studio's decision to release their product for sale, which would mean that someone, somewhere would have to pay for a copy at least once.

[Kanastrous]

It impresses me as a distinction without a difference because the value of that one purchased piece of media doesn't really meaningfully offset the losses represented by thousands of illicit dupes. The +/- $10-$30 for that original is insignificant and may as well be $0. What difference if the studio decided to permit the release of the disc that cost them many sales they want and need, vs having had the original stolen, etc? It seems like a vanishingly minor formality.

*edit* I guess given the OP the dupes aren't exactly 'illicit' if the copyright owner's model includes them being indefinitely duped off a minimal number of commercial-sale copies. Call them 'secondary' or something, I suppose.

[General Zod]

It impresses me as a distinction without a difference because the value of that one purchased piece of media doesn't really meaningfully offset the losses represented by thousands of illicit dupes. The +/- $10-$30 for that original is insignificant and may as well be $0. What difference if the studio decided to permit the release of the disc that cost them many sales they want and need, vs having had the original stolen, etc? It seems like a vanishingly minor formality.

*edit* I guess given the OP the dupes aren't exactly 'illicit' if the copyright owner's model includes them being indefinitely duped off a minimal number of commercial-sale copies. Call them 'secondary' or something, I suppose.

Wouldn't that mean they'd just have to switch revenue models? People don't generally pay for television outside of their cable bill, so theoretically a movie industry could switch to an ad based model like television. They'd just have to lower their revenue expectations.

[Simon_Jester]

You're not fatty. You're just well-marbled.

Phew. I thought I lost them.

But ja, the Philippines is example of "what if piracy becomes legal" in actual function. It's wonderful!

Well, no. Actually, the Philippines is an example of the consequences of wealth disparity and high planetary Gini coefficient in actual function. There are luxury services (high-budget movies) that are profitable in rich countries (the US) but not in poor countries (the Philippines). That creates a huge black market in the poor countries (for pirated DVDs).

But the black market can't exist without a legal market to piggyback off of. You can get a pirated DVD of Avatar in the Philippines for all your blue-people-fighting-helicopters needs, but if the world market for DVDs looked like the Philippines all over, Avatar would never (could never) have been made in the first place.

Instead, you would be seeing pirated DVDs of much, much lower-budget movies, maybe* ones designed along the same lines as the studio system Hollywood used in the mid-20th century.

Because you'd have basically the same situation. You can't count on recorded media sales to make up for low ticket sales (then because recorded media didn't exist, now because they're too easy to copy). At best, all you can really count on selling is the experience of watching the movie on a big silver screen, and by itself that isn't worth very much. So the movie's gross income potential is limited, and you have to make the production budget equally limited, which means a lot less in the way of special effects and super-high-paid actors.

*This may be a retarded comparison, but it at least lets me describe the idea in terms of something that actually existed in real life.

[Lagmonster]

You can't count on recorded media sales to make up for low ticket sales (then because recorded media didn't exist, now because they're too easy to copy). At best, all you can really count on selling is the experience of watching the movie on a big silver screen, and by itself that isn't worth very much. So the movie's gross income potential is limited, and you have to make the production budget equally limited, which means a lot less in the way of special effects and super-high-paid actors.

Which is something I had tossing about in my head at the outset; I'd expect that the people who would lose the most in such a world would be the geeks, because you could turn out an average romantic comedy that's still a good movie on a shoestring budget if you had to, but it would be impossible to make Avatar without it coming out like the second coming of Harryhausen.

[General Zod]

You can't count on recorded media sales to make up for low ticket sales (then because recorded media didn't exist, now because they're too easy to copy). At best, all you can really count on selling is the experience of watching the movie on a big silver screen, and by itself that isn't worth very much. So the movie's gross income potential is limited, and you have to make the production budget equally limited, which means a lot less in the way of special effects and super-high-paid actors.

Which is something I had tossing about in my head at the outset; I'd expect that the people who would lose the most in such a world would be the geeks, because you could turn out an average romantic comedy that's still a good movie on a shoestring budget if you had to, but it would be impossible to make Avatar without it coming out like the second coming of Harryhausen.

SyFy manages to produce movies with reasonably acceptable FX for $1-2m per film, but the biggest hurdle there would be finding competent writers and directors.

[General Zod]

The beauty of the scenario would be everyone plays on a level playing field. So the good directors can work with the lower budget or they can not work at all.

Big budget films aren't necessarily out of the running either. I'm pretty sure Star Wars and Gundam both made (and still make) a lot more money selling toys and whatnot than actually selling the movie. That angle is still a possibility.

With the right marketing campaign you could still draw crowds to the theater. Plenty of people are more willing to pay money for an "authentic" experience than some cheap knockoff.

[Simon_Jester]

Well, what really dies isn't any specific genre; it's CGI. CGI is what's inflated the production costs for summer blockbusters and science fiction in the last decade or so. There were good SF movies in the '60s and '70s that were produced for manageable budgets, but we might have to go back to that standard of special effects quality to make movies in a no-DVD-sales environment.

Of course, all the graphics geeks would scream their heads off at this point.

[Kanastrous]

Although I have to admit that the posited death of high-gloss big-budget sci-fi/action geek-pleasing content thanks to piracy enabled by people who are frequently themselves big-budget sci-fi/action fan geeks is pleasingly symmetrical. Let the motherfuckers develop a taste for romantic comedy.

Runaway paydays for producers, directors and talent (plus the proliferation of 'producer' titles themselves) have a much greater impact than filling digital artist chairs. You can sometimes pay a full production-and-post crew's salaries (with $$$ left over) for what just one of the marquee actors, the director, or senior producers will pocket on the project.

[starfury]

Although I have to admit that the posited death of high-gloss big-budget sci-fi/action geek-pleasing content thanks to piracy enabled by people who are frequently themselves big-budget sci-fi/action fan geeks is pleasingly symmetrical. Let the motherfuckers develop a taste for romantic comedy.

Seems similar what I posted about Video Game piracy and that Games meant for the graphic loving enthusantist gamers tend to be by far the one most hurt by both Piracy on the PC end and used games on the consoles side. this seems to be the movie version of the same trend, as Avatar bashing was quite popular among these geeks anyway, now they get their wish and suffer romantic comedy instead.

[General Zod]

Although I have to admit that the posited death of high-gloss big-budget sci-fi/action geek-pleasing content thanks to piracy enabled by people who are frequently themselves big-budget sci-fi/action fan geeks is pleasingly symmetrical. Let the motherfuckers develop a taste for romantic comedy.

Seems similar what I posted about Video Game piracy and that Games meant for the graphic loving enthusantist gamers tend to be by far the one most hurt by both Piracy on the PC end and used games on the consoles side. this seems to be the movie version of the same trend, as Avatar bashing was quite popular among these geeks anyway, now they get their wish and suffer romantic comedy instead.

Because the BBC totally hasn't done any other genre but romantic comedy on a shoestring budget or anything . . .