Music sales are not affected by web piracy

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Music sales are not affected by web piracy

Post by Terpit » Thu Mar 21, 2013 5:38 am

http://www.bbc.co.uk/news/technology-21856720
A report published by the European Commission Joint Research Committee claims that music web piracy does not harm legitimate sales.

The Institute for Prospective Technological Studies examined the online habits of 16,000 Europeans.

They also found that freely streamed music provided a small boost to sales figures.

The International Federation of the Phonographic Industry (IFPI) said the research was "flawed and misleading".

"It seems that the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them," wrote the researchers in their report, Digital Music Consumption on the Internet: Evidence from Clickstream Data.

"Although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues," they added.

The team analysed data over the course of one year.

They also found that music streaming services such as Spotify and Pandora gave a small boost to music sales.

"According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites," claimed the report.

However the international music industry body the IFPI was highly critical of the research.

"The findings seem disconnected from commercial reality," it said in a statement.

"If a large proportion of illegal downloaders do not buy any music (and yet consume, in some cases, large amounts of it), it cannot be logical that illegal behaviour stimulates legal download sales and inflicts no harm."

On a slightly related note, DMZ won't ever re-press their old records right? So buying them for stupid prices on Disco G's doesn't 'support the scene' at all, it supports greedy stnuc. Is it so wrong to pirate their older music?
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Re: Music sales are not affected by web piracy

Post by Phigure » Thu Mar 21, 2013 6:02 am

Terpit wrote:On a slightly related note, DMZ won't ever re-press their old records right? So buying them for stupid prices on Disco G's doesn't 'support the scene' at all, it supports greedy stnuc. Is it so wrong to pirate their older music?
define "wrong" first of all

would dmz approve? i don't think so but then i gets to the point of if you even do you care if they approve or not i guess
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Re: Music sales are not affected by web piracy

Post by Terpit » Thu Mar 21, 2013 6:10 am

Phigure wrote:
Terpit wrote:On a slightly related note, DMZ won't ever re-press their old records right? So buying them for stupid prices on Disco G's doesn't 'support the scene' at all, it supports greedy stnuc. Is it so wrong to pirate their older music?
define "wrong" first of all

would dmz approve? i don't think so but then i gets to the point of if you even do you care if they approve or not i guess
Wrong as in immoral I guess, imo it's nowhere near as bad as pirating tunes that are readily available
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Re: Music sales are not affected by web piracy

Post by garethom » Thu Mar 21, 2013 10:20 am

I'd say it's wrong if they don't want their tunes to be available. If they don't care, then it's not something I'd personally do, but not fussed what people do either way.

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Re: Music sales are not affected by web piracy

Post by Marcus » Thu Mar 21, 2013 10:27 am

I think a lot of people won't pay for music long as they can get it for free.

I don't find downloading really inflated vinyl only releases that bad unless you start playing them out.
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Re: Music sales are not affected by web piracy

Post by Terpit » Thu Mar 21, 2013 10:28 am

Marcus wrote:I don't find downloading really inflated vinyl only releases that bad unless you start playing them out.
Yeah that's my attitude too
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Re: Music sales are not affected by web piracy

Post by karmacazee » Thu Mar 21, 2013 10:31 am

Yeah, streaming and downloads have been detrimental to the big three major labels, but it has been great for indy labels and DIY artists.

It just so happens that the big three labels have the loudest voice in this debate. They were too slow in changing their business models, were left behind by everyone else in the industry.

Music industry's never been healthier, just the CD sales of large multinationals that have suffered. Boo hoo.

IFPI and all them are just spokespeople for major labels.

On a side note, vinyl sales are higher than they've been for 20+ years, and has grown steadily for the last three years.

http://www.bbc.co.uk/news/entertainment-arts-21010240
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Re: Music sales are not affected by web piracy

Post by Forum » Thu Mar 21, 2013 10:31 am

I've downloaded the odd vinyl only release purely for home listening, doesn't bother me
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Re: Music sales are not affected by web piracy

Post by garethom » Thu Mar 21, 2013 11:00 am

karmacazee wrote:
On a side note, vinyl sales are higher than they've been for 20+ years, and has grown steadily for the last three years.

http://www.bbc.co.uk/news/entertainment-arts-21010240
The rise in vinyl sales in the last few years is a bit of a weird one, as it's major label releases/represses that are the source of most of these sales. They're pressing a few more records now that it's seen as a cool thing to do, and people will pay £30 for a single LP or whatever.

To see how vinyl sales are doing in the underground, just go and ask your local record shop how they're doing (if they're still open, that is).

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Re: Music sales are not affected by web piracy

Post by karmacazee » Thu Mar 21, 2013 11:19 am

garethom wrote:
karmacazee wrote:
On a side note, vinyl sales are higher than they've been for 20+ years, and has grown steadily for the last three years.

http://www.bbc.co.uk/news/entertainment-arts-21010240
The rise in vinyl sales in the last few years is a bit of a weird one, as it's major label releases/represses that are the source of most of these sales. They're pressing a few more records now that it's seen as a cool thing to do, and people will pay £30 for a single LP or whatever.

To see how vinyl sales are doing in the underground, just go and ask your local record shop how they're doing (if they're still open, that is).
The four independent record shops in Cardiff have outlasted the bigger stores like HMV, MVC, Virgin and Woolies! Spillers is a bit of an institution though (it's the oldest record shop in the UK), and Catapult too. D'vinyl is a crate diggers paradise - they still sell tapes! And Kelly's Records in the market has always been there.

Cardiff might be an exception to the rule, but when HMV goes there will only be independent record shops left!
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Re: Music sales are not affected by web piracy

Post by syrup » Thu Mar 21, 2013 11:30 am

Terpit wrote:
Marcus wrote:I don't find downloading really inflated vinyl only releases that bad unless you start playing them out.
Yeah that's my attitude too
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Re: Music sales are not affected by web piracy

Post by garethom » Thu Mar 21, 2013 11:38 am

karmacazee wrote:
garethom wrote:
karmacazee wrote:
On a side note, vinyl sales are higher than they've been for 20+ years, and has grown steadily for the last three years.

http://www.bbc.co.uk/news/entertainment-arts-21010240
The rise in vinyl sales in the last few years is a bit of a weird one, as it's major label releases/represses that are the source of most of these sales. They're pressing a few more records now that it's seen as a cool thing to do, and people will pay £30 for a single LP or whatever.

To see how vinyl sales are doing in the underground, just go and ask your local record shop how they're doing (if they're still open, that is).
The four independent record shops in Cardiff have outlasted the bigger stores like HMV, MVC, Virgin and Woolies! Spillers is a bit of an institution though (it's the oldest record shop in the UK), and Catapult too. D'vinyl is a crate diggers paradise - they still sell tapes! And Kelly's Records in the market has always been there.

Cardiff might be an exception to the rule, but when HMV goes there will only be independent record shops left!
That's a good point man! Online retailers are doing pretty well out of the digital explosion though.

But yeah, guess Cardiff is a bit of an exception, will probably find a lot more struggling record shops than ones doing well!

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Re: Music sales are not affected by web piracy

Post by ezza » Thu Mar 21, 2013 2:01 pm

i dont really get the whole moan about piracy, i dont do it much but thats just cus i prefer to buy higher quality files

people who pirate your music weren't gonna buy it anyway, so you've lost no money

also id rather have 1000 people illegally download my shit than 100 people pay for it

the profit off selling releases is so small, all the money is in live gigs

and the more people who have your tunes, the bigger your name becomes & then the more people that are likely to come too see you play

so i personally wouldn't care how they get them, anyway is a good way :W:
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Re: Music sales are not affected by web piracy

Post by deadly_habit » Thu Mar 21, 2013 2:19 pm

Here's an interesting take on piracy in the games industry from the coder from Team Meat.
I think I can safely say that Super Meat Boy has been pirated at least 200,000 times. We are closing in on 2 million sales and assuming a 10% piracy to sales ratio does not seem unreasonable. As a forward thinking developer who exists in the present, I realize and accept that a pirated copy of a digital game does not equate to money being taken out of my pocket. Team Meat shows no loss in our year end totals due to piracy and neither should any other developer.

For the sake of argument, some of those people that did pirate Super Meat Boy could have bought the game if piracy didn’t exist but there is no actual way to calculate that lost revenue. It is impossible to know with certainty the intentions of people. With the SimCity fiasco and several companies trying to find new ways to combat piracy and stating piracy has negatively affected their bottom line I wonder if they’ve taken the time to accurately try to determine what their losses are due to piracy.

My first job outside my parents cabinet shop was at KMart. KMart, like countless other retailers, calculates loss by counting purchased inventory and matching it to sales. Loss is always built into the budget because it is inevitable. Loss could come from items breaking, being stolen, or being defective. If someone broke a light bulb, that was a calculable loss. If someone returned a blender for being defective, it wasn’t a loss to KMart, but a calculable loss to the manufacturer. If someone steals a copy of BattleToads, it’s a loss to KMart. All loss in a retail setting is calculable because items to be sold are physical objects that come from manufacturers that have to be placed on shelves by employees. You have a chain of inventory numbers, money spent and labor spent that goes from the consumer all the way to the manufacturer. A stolen, broken, or lost item is an item that you cannot sell. In the retail world your stock is worth money.

In the digital world, you don’t have a set inventory. Your game is infinitely replicable at a negligible or zero cost (the cost bandwidth off your own site or nothing if you're on a portal like Steam, eShop, etc). Digital inventory has no value. Your company isn’t worth an infinite amount because you have infinite copies of your game. As such, calculating worth and loss based on infinite inventory is impossible. If you have infinite stock, and someone steals one unit from that stock, you still have infinite stock. If you have infinite stock and someone steals 1 trillion units from that stock , you still have infinite stock. There is no loss of stock when you have an infinite amount.

Because of this, in the digital world, there is no loss when someone steals a game because it isn't one less copy you can sell, it is potentially one less sale but that is irrelevant. Everyone in the world with an internet connection and a form of online payment is a potential buyer for your game but that doesn’t mean everyone in the world will buy your game.

Loss due to piracy is an implied loss because it is not a calculable loss. You cannot, with any accuracy, state that because your game was pirated 300 times you lost 300 sales. You cannot prove even one lost sale because there is no evidence to state that any one person who pirated your game would have bought your game if piracy did not exist. From an accounting perspective it’s speculative and a company cannot accurately determine loss or gain based on speculative accounting. You can’t rely on revenue due to speculation, you can’t build a company off of what will “probably” happen. Watch “The Smartest Guys in the Room” and see how that worked out for Enron.

Companies try to combat piracy of their software with DRM but if loss due to pirated software is not calculable to an accurate amount does the implementation of DRM provide a return on investment? It is impossible to say yes to this statement. Look at it as numbers spent in a set budget. You spend $X on research for your new DRM method that will prevent people from stealing your game. That $X is a line item in accounting that can be quantified. Can you then say “This $X we put into research for our DRM gained us back $Y in sales”? There is no way to calculate this because it is not possible to quantify the intentions of a person. Also, there’s no way of accurately determining which customers would have stolen the game had there not been DRM.

To add to that, the reality of our current software age is the internet is more efficient at breaking things than companies are at creating them. A company will spend massive amounts of money on DRM and the internet will break it in a matter of days in most cases. When the DRM is broken is it worth the money spent to implement it? Did the week of unbroken DRM for your game gain you any sales from potential pirates due to the inability to pirate at launch? Again, there is no way of telling and as such cannot be used as an accurate justification for spending money.

So what should developers do to make sure people don’t steal games? Unfortunately there is nothing anyone can do to actively stop their game from being pirated. I do believe people are less likely to pirate your software if the software is easy to buy, easy to run, and does what is advertised. You can’t force a person to buy your software no more than you can prevent a person from stealing it. People have to WANT to buy your software, people have to WANT to support you. People need to care about your employees and your company’s well being. There is no better way to achieve that than making sure what you put out there is the best you can do and you treat your customers with respect.

Lets loop back to what’s going on with SimCity. I bought SimCity day one, I played it and experienced the same frustrations that countless others are experiencing. For total fairness, I know the always on DRM isn’t the main issue, but I can’t help but think that the server side calculations are a “wolf in sheep’s clothing” version of DRM. I won’t claim to know the inner workings of SimCity and this isn’t a Captain Hindsight article because that is irrelevant. EA and Maxis are currently facing a bigger problem than piracy: A growing number of their customers no longer trust them and this has and will cost them money.

After the frustrations with SimCity I asked Origin for a refund and received one. This was money they had and then lost a few days later. Applying our earlier conversation about calculable loss, there is a loss that is quantifiable, that will show up in accounting spreadsheets and does take away from profit. That loss is the return, and it is much more dangerous than someone stealing your game.

In the retail world, you could potentially put a return back on the shelf, you could find another customer that wants it, sell it to them and there would be virtually no loss. In the digital world, because there is no set amount of goods, you gain nothing back (one plus infinity is still infinity). It’s only a negative experience. A negative frustrating experience for a customer should be considered more damaging than a torrent of your game.

Speaking from my experience with SMB, I know for a fact we have lost a lot of trust from Mac users due to the Mac port of SMB being poor quality. I could go into the circumstances of why it is the way it is but that is irrelevant...it’s a broken product that is out in the public. We disappointed a good portion of our Mac customers with SMB and as a result several former customers have requested and received refunds. I’d take any amount of pirates over one return due to disappointment any day.

Disappointment leads to apathy which is the swan song for any developer. If people don’t care about your game, why would people ever buy it? When MewGenics comes out, I doubt many Mac users are going to be excited about our launch. When EA/Maxis create their next new game how many people are going to be excited about it and talking positively about it? I imagine that the poison of their current SimCity launch is going to seep into potential customers thoughts and be a point of speculation as to “Is it going to be another SimCity launch?”.

This is not a quantifiable loss of course, but people are more likely to buy from distributors they trust rather than ones they’ve felt slighted by before. Consumer confidence plays a very important role in how customers spend money. I think its safe to say that EA and Maxis do not have a lot of consumer confidence at this point. I think its also safe to say that the next EA/Maxis game is going to be a tough sell to people who experienced or were turned away by talk of frustration regarding SimCity.

As a result of piracy developers feel their hand is forced to implement measures to stop piracy. Often, these efforts to combat piracy only result in frustration for paying customers. I challenge a developer to show evidence that accurately shows implementation of DRM is a return on investment and that losses due to piracy can be calculated. I do not believe this is possible.

The reality is the fight against piracy equates to spending time and money combating a loss that cannot be quantified. Everyone needs to accept that piracy cannot be stopped and loss prevention is not a concept that can be applied to the digital world. Developers should focus on their paying customers and stop wasting time and money on non-paying customers. Respect your customers and they may in turn respect your efforts enough to purchase your game instead of pirating it.
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Re: Music sales are not affected by web piracy

Post by SCope13 » Thu Mar 21, 2013 2:30 pm

I simply can't afford to buy all the music I want to listen to. Sorry. I buy what I can, but my thirst for new music is greater than the amount of money in my wallet.


And come on, I'm not going to actually pay for something like Flockaveli.
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Re: Music sales are not affected by web piracy

Post by scspkr99 » Thu Mar 21, 2013 4:15 pm

SCope13 wrote:I simply can't afford to buy all the music I want to listen to. Sorry. I buy what I can, but my thirst for new music is greater than the amount of money in my wallet.


And come on, I'm not going to actually pay for something like Flockaveli.
If you are going to make an argument in support of piracy don't make such a shit one

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Re: Music sales are not affected by web piracy

Post by SCope13 » Thu Mar 21, 2013 5:39 pm

I'm not "supporting piracy", I'm just being honest and saying I simply don't have the money to buy all the music I want to listen to. So yeah, I have to pirate some shit. Would you rather I just not hear it at all? Because if I had to buy EVERYTHING I listen to, I would miss out on some really good stuff.
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Re: Music sales are not affected by web piracy

Post by VirtualMark » Thu Mar 21, 2013 5:51 pm

I'm so glad that there's finally proof of this. I've been saying it for years!

I got tired of reading about the amount of money the music industry claims it loses - they count each download of a torrent as a lost sale. That simply isn't true - a lot of people wouldn't have bought it anyway, or just wanted one track off an album.

It's probably the same for VSTs. I wouldn't have bought half the synths I own if I hadn't had an "extended trial", as it takes me a few months to find out if I really need a plugin.

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Re: Music sales are not affected by web piracy

Post by fractal » Thu Mar 21, 2013 5:52 pm

deadly habit wrote:Here's an interesting take on piracy in the games industry from the coder from Team Meat.
I think I can safely say that Super Meat Boy has been pirated at least 200,000 times. We are closing in on 2 million sales and assuming a 10% piracy to sales ratio does not seem unreasonable. As a forward thinking developer who exists in the present, I realize and accept that a pirated copy of a digital game does not equate to money being taken out of my pocket. Team Meat shows no loss in our year end totals due to piracy and neither should any other developer.

For the sake of argument, some of those people that did pirate Super Meat Boy could have bought the game if piracy didn’t exist but there is no actual way to calculate that lost revenue. It is impossible to know with certainty the intentions of people. With the SimCity fiasco and several companies trying to find new ways to combat piracy and stating piracy has negatively affected their bottom line I wonder if they’ve taken the time to accurately try to determine what their losses are due to piracy.

My first job outside my parents cabinet shop was at KMart. KMart, like countless other retailers, calculates loss by counting purchased inventory and matching it to sales. Loss is always built into the budget because it is inevitable. Loss could come from items breaking, being stolen, or being defective. If someone broke a light bulb, that was a calculable loss. If someone returned a blender for being defective, it wasn’t a loss to KMart, but a calculable loss to the manufacturer. If someone steals a copy of BattleToads, it’s a loss to KMart. All loss in a retail setting is calculable because items to be sold are physical objects that come from manufacturers that have to be placed on shelves by employees. You have a chain of inventory numbers, money spent and labor spent that goes from the consumer all the way to the manufacturer. A stolen, broken, or lost item is an item that you cannot sell. In the retail world your stock is worth money.

In the digital world, you don’t have a set inventory. Your game is infinitely replicable at a negligible or zero cost (the cost bandwidth off your own site or nothing if you're on a portal like Steam, eShop, etc). Digital inventory has no value. Your company isn’t worth an infinite amount because you have infinite copies of your game. As such, calculating worth and loss based on infinite inventory is impossible. If you have infinite stock, and someone steals one unit from that stock, you still have infinite stock. If you have infinite stock and someone steals 1 trillion units from that stock , you still have infinite stock. There is no loss of stock when you have an infinite amount.

Because of this, in the digital world, there is no loss when someone steals a game because it isn't one less copy you can sell, it is potentially one less sale but that is irrelevant. Everyone in the world with an internet connection and a form of online payment is a potential buyer for your game but that doesn’t mean everyone in the world will buy your game.

Loss due to piracy is an implied loss because it is not a calculable loss. You cannot, with any accuracy, state that because your game was pirated 300 times you lost 300 sales. You cannot prove even one lost sale because there is no evidence to state that any one person who pirated your game would have bought your game if piracy did not exist. From an accounting perspective it’s speculative and a company cannot accurately determine loss or gain based on speculative accounting. You can’t rely on revenue due to speculation, you can’t build a company off of what will “probably” happen. Watch “The Smartest Guys in the Room” and see how that worked out for Enron.

Companies try to combat piracy of their software with DRM but if loss due to pirated software is not calculable to an accurate amount does the implementation of DRM provide a return on investment? It is impossible to say yes to this statement. Look at it as numbers spent in a set budget. You spend $X on research for your new DRM method that will prevent people from stealing your game. That $X is a line item in accounting that can be quantified. Can you then say “This $X we put into research for our DRM gained us back $Y in sales”? There is no way to calculate this because it is not possible to quantify the intentions of a person. Also, there’s no way of accurately determining which customers would have stolen the game had there not been DRM.

To add to that, the reality of our current software age is the internet is more efficient at breaking things than companies are at creating them. A company will spend massive amounts of money on DRM and the internet will break it in a matter of days in most cases. When the DRM is broken is it worth the money spent to implement it? Did the week of unbroken DRM for your game gain you any sales from potential pirates due to the inability to pirate at launch? Again, there is no way of telling and as such cannot be used as an accurate justification for spending money.

So what should developers do to make sure people don’t steal games? Unfortunately there is nothing anyone can do to actively stop their game from being pirated. I do believe people are less likely to pirate your software if the software is easy to buy, easy to run, and does what is advertised. You can’t force a person to buy your software no more than you can prevent a person from stealing it. People have to WANT to buy your software, people have to WANT to support you. People need to care about your employees and your company’s well being. There is no better way to achieve that than making sure what you put out there is the best you can do and you treat your customers with respect.

Lets loop back to what’s going on with SimCity. I bought SimCity day one, I played it and experienced the same frustrations that countless others are experiencing. For total fairness, I know the always on DRM isn’t the main issue, but I can’t help but think that the server side calculations are a “wolf in sheep’s clothing” version of DRM. I won’t claim to know the inner workings of SimCity and this isn’t a Captain Hindsight article because that is irrelevant. EA and Maxis are currently facing a bigger problem than piracy: A growing number of their customers no longer trust them and this has and will cost them money.

After the frustrations with SimCity I asked Origin for a refund and received one. This was money they had and then lost a few days later. Applying our earlier conversation about calculable loss, there is a loss that is quantifiable, that will show up in accounting spreadsheets and does take away from profit. That loss is the return, and it is much more dangerous than someone stealing your game.

In the retail world, you could potentially put a return back on the shelf, you could find another customer that wants it, sell it to them and there would be virtually no loss. In the digital world, because there is no set amount of goods, you gain nothing back (one plus infinity is still infinity). It’s only a negative experience. A negative frustrating experience for a customer should be considered more damaging than a torrent of your game.

Speaking from my experience with SMB, I know for a fact we have lost a lot of trust from Mac users due to the Mac port of SMB being poor quality. I could go into the circumstances of why it is the way it is but that is irrelevant...it’s a broken product that is out in the public. We disappointed a good portion of our Mac customers with SMB and as a result several former customers have requested and received refunds. I’d take any amount of pirates over one return due to disappointment any day.

Disappointment leads to apathy which is the swan song for any developer. If people don’t care about your game, why would people ever buy it? When MewGenics comes out, I doubt many Mac users are going to be excited about our launch. When EA/Maxis create their next new game how many people are going to be excited about it and talking positively about it? I imagine that the poison of their current SimCity launch is going to seep into potential customers thoughts and be a point of speculation as to “Is it going to be another SimCity launch?”.

This is not a quantifiable loss of course, but people are more likely to buy from distributors they trust rather than ones they’ve felt slighted by before. Consumer confidence plays a very important role in how customers spend money. I think its safe to say that EA and Maxis do not have a lot of consumer confidence at this point. I think its also safe to say that the next EA/Maxis game is going to be a tough sell to people who experienced or were turned away by talk of frustration regarding SimCity.

As a result of piracy developers feel their hand is forced to implement measures to stop piracy. Often, these efforts to combat piracy only result in frustration for paying customers. I challenge a developer to show evidence that accurately shows implementation of DRM is a return on investment and that losses due to piracy can be calculated. I do not believe this is possible.

The reality is the fight against piracy equates to spending time and money combating a loss that cannot be quantified. Everyone needs to accept that piracy cannot be stopped and loss prevention is not a concept that can be applied to the digital world. Developers should focus on their paying customers and stop wasting time and money on non-paying customers. Respect your customers and they may in turn respect your efforts enough to purchase your game instead of pirating it.
http://gamasutra.com/blogs/TommyRefenes ... piracy.php
interesting read, thanks!
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garethom
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Re: Music sales are not affected by web piracy

Post by garethom » Thu Mar 21, 2013 6:39 pm

SCope13 wrote:I'm not "supporting piracy", I'm just being honest and saying I simply don't have the money to buy all the music I want to listen to. So yeah, I have to pirate some shit. Would you rather I just not hear it at all? Because if I had to buy EVERYTHING I listen to, I would miss out on some really good stuff.
Not gonna try and grind your gears or whatever cos I'm personally not that fussed anymore, but I could use the line "Because if I had to buy EVERYTHING I *verb* to, I would miss out on some really good stuff." for pretty much everything :lol:

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