For years, the RIAA and MPAA have been telling us that Internet “piracy” is destroying their industries. Instead of innovating, instead of developing new business models based on clear customer preferences, the content cartel turns the volume up to 11, screams “You can’t compete with free!”, and demands ever more repressive government control of the Internet.
Nowhere have their efforts been more successful than in France, which in 2009 adopted the HADOPI law, creating a “graduated response” or “3-strikes” system to deal with repeat infringement claims. IPSs are required to suspend service to non-compliant subscribers, and a blacklist prevents such subscribers from obtaining Internet service elsewhere. We now have a report announcing that, after only 17 months of operation, HADOPI has reduced Internet piracy in France by 50%.
By logic and arithmetic, we should now expect the French music and movie companies to be flush with euros and celebrating the massive return of their lost customers. But, in fact, revenues for the French movie industry were down 2.7% in 2011, and the music business declined even more, by 3.9%.
No one who doesn’t work for Hollywood or the record labels should be surprised. Even members of Congress should be able to understand the implications. As we learned from Rob Reid’s brilliant 5-minute TED Talk “Copyright Math: The $8 billion iPod”, numbers don’t add up in Copyright-Land the way they do here in the real world.
5 years ago, Bog Iger, the CEO of Walt Disney, said, “The best way to combat piracy is to bring content to market on a well-timed, well-priced basis.” The report from France provides further proof that he was right. Or, to put it another way, if people don’t think your product is worth the price you’re charging, they won’t buy it.