The Decline of Online Piracy: How Markets - Not Enforcement - Drive Down Copyright Infringement

By Quintais, João Pedro; Poort, Joost | American University International Law Review, August 10, 2019 | Go to article overview

The Decline of Online Piracy: How Markets - Not Enforcement - Drive Down Copyright Infringement


Quintais, João Pedro, Poort, Joost, American University International Law Review


I.Introduction

The ways in which consumers acquire music, films, series, books, and games have changed radically over the last twenty years.1 Until the turn of the twenty-first century, copyright-protected content was bought primarily in the form of physical carriers such as CDs, DVDs and printed books. Nowadays, an increasing amount of purely digital content is acquired and experienced online. In recent years, it has become possible to discern a second shift in consumption of content: from ownership to access.2

In the music industry, for instance, digital sales-downloads plus subscription services-accounted for 54% of global revenues in 2017, whereas physical formats were down to a 30% share.3 In that year, streaming grew by 41% to account for 38% of total revenues, while revenues from downloads declined by 21%.4 In the film industry, total spending in Europe in 2016 on buying and renting video was €9.7 billion.5 Physical DVDs and Blu-ray discs accounted for €4.2 billion of that, down by 18%, while digital video and video on demand grew by 27% to €5.4 billion.6 The gaming industry has undergone a similar shift toward digital sales and subscriptions. "Physical books have, so far, been more resilient to digitisation; E-book adoption is increasing, but the revenue share of e-books is no higher than 30% in any of the markets examined in this article."7

Unauthorized online content distribution-commonly referred to as "online piracy"-has followed the same evolution as authorized distribution of content: from physical carriers, via downloads, to streaming.8 For both legal and illegal distribution and consumption of content, these various channels coexist today to serve the preferences ofdifferent consumers.

This article deals with the "acquisition and consumption of music, films, series, books, and games through the various legal and illegal channels that exist [today], in a set of [thirteen] countries across the globe."9 The article aims first to provide an overview of the rules on liability for and enforcement of online copyright infringement in the countries studied. The second aim is to provide factual information about the state of authorized and unauthorized acquisition and consumption of these types of content. The third aim is to assess the underlying mechanisms and the link with enforcement measures and legal supply. The final aim is to assess the effect of online piracy on consumption from legal sources.

To these ends, we have carried out research that combines different sources and empirical methods. We have conducted consumer surveys among nearly 35.000 respondents, including over 7.000 minors, in thirteen countries: seven European Union (EU) member states (France, Germany, Netherlands, Poland, Spain, Sweden, and United Kingdom), two American countries (Brazil and Canada), and four Asian regions and countries (Hong Kong, Indonesia, Japan, and Thailand).10 The results of these surveys have been combined with comparative legal research based on a questionnaire concerning copyright legislation and enforcement, completed by legal experts in each of the countries.11 In addition, country data has been obtained from the World Bank, and the resulting data set has been analysed using state of the art econometric techniques. With regard to the European countries studied, a comparable consumer survey was conducted for all such countries in 2014 and for the Netherlands only in 2012. Revisiting the countries in those reports allows for studying developments in content consumption for these countries over time. It also provides the unique opportunity to follow more than 4.000 respondents in seven countries over a longer time span.12

This article proceeds as follows. In Part II, we provide a brief history of online piracy, discussing research on its effects, as well as the effects of enforcement on piracy itself. In Part II, we present the results of our legal comparative research in the thirteen jurisdictions studied. …

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