Study Shows That Giving People 12% Of The Video Content They Want Doesn't Stop Piracy

[Len]

When it comes to offering good legal alternatives to piracy in the entertainment industry, there are two types of arguments people make. One is that these alternatives, if properly done, will reduce the rate of piracy within a population set. The other is that these streaming options are great revenue sources regardless of the impact on piracy within the population and that increased revenues are all that really matter. What virtually nobody has argued is that if a streaming service barely gives people anything they want, even if that service is free, that piracy will cease to be.

And, yet, researchers from Carnegie Mellon University and Universidade Catolica Portuguesa sought to disprove this non-claim anyway in a recent study.
 

The researchers used a piracy-tracking firm to get a sample of thousands of BitTorrent pirates at the associated ISP. Half of them were offered a free 45-day subscription to a premium TV and movies package, allowing them to watch popular content on demand.

To measure the effects of video-on-demand access on piracy, the researchers then monitored the legal viewing activity and BitTorrent transfers of the people who received the free offer, comparing it to a control group. The results show that piracy is harder to beat than some would expect.

Subscribers who received the free subscription watched more TV, but overall their torrenting habits didn’t change significantly.

This summary sounds quite damning, particularly for those that would argue that good legal alternatives can reduce piracy. In this case, a free temporary subscription to a streaming service barely had an impact at all. The researchers found that overall TV consumption went up a few points and reduced torrenting practices by a few points. Neither change was a significant one. So what gives?
 

The video-on-demand service in the study had an average “fit” of just 12% with people’s viewing preferences, which means that they were missing a lot of content. But even Netflix, which has a library of thousands of titles, only has a fit of roughly 50%.

Right, except 50% is a fairly big jump from 12%. Even accounting for the gifted streaming service being free and Netflix carrying a cost, a streaming service that has 12% of what a consumer wants is only barely discernible from useless. The power of Netflix is in how much content it has and, by virtue of its quantity, how much the average person will find on the service that matches their tastes. What this is actually showing is how much damage is done by content providers cutting exclusive deals with streaming services and fragmenting what could otherwise be one-stop streaming services. The real question is what happens when a streaming service actually has the content people want. It's a question this same study actually answers.
 

“Households with preferences aligned with the gifted content reduced their probability of using BitTorrent during the experiment by 18% and decreased their amount of upload traffic by 45%,” the paper reads.

A nearly 20% reduction in torrent behavior over this short a sample period is really good. It's so good, in fact, that it should be the feature outcome of this study. A streaming platform that is strong on the content people want can cut piracy by a fifth in forty-five days. How is that not the headline?

The rest of the study makes much of how little the pirate households said they'd be willing to pay for a streaming service like Netflix, something like $3/month. This is presented as evidence again in refuting a claim that nobody made: piracy won't magically go away just because there's a good streaming service. But all this result really shows is that these people were never going to be reasonable targets for customership to begin with. Netflix has had a huge adoption rate where available and its been another pure revenue stream for content creators. Who cares what the habits of a bunch of people who can't even manage to pay $3/month for Netflix are? They aren't important. Or, at least, they can't be nearly as important as all of the people who are paying their Netflix subscriptions, resulting in revenue for content creators.

So, will good legal alternatives pop up to reduce piracy? Probably, if they're done well. Will they ever stamp out piracy completely? Nope. Does that matter? Not if the only focus is on making content creators more money, because the focus in that regard should be on making streaming options as successful as possible, which is not what the content companies are doing.

Why they aren't is the real mystery here.