France made waves in the P2P industry by implementing a controversial graduated response program in 2010 that was designed to reduce the amount of illegal downloads by establishing progressively-harsher penalties on file sharers. The results were strong, as shown in Hadopi’s report, with file-sharing activities traffic slashed by two-thirds in 2011. However, the goal of increasing revenues in the French music and movie industries did not materialize and revenues fell in both industries.
The declines in revenue were inevitable and will continue as technology makes it less-expensive to be entertained. Legal downloads and streaming services do not generate the revenue nor the profits that DVDs and CDs once did. The obsessive pursuits by governments, lobbyists, and anti-piracy organizations are wastes of energy when the real challenge the industries face are evolutionary. They are simply not adapting fast enough.
Piracy has an effect on music and movie sales in the same way that smoking has an effect on a person’s health. The problem is that the industries have a much bigger problem with understanding the way that their customers operate today and onward into tomorrow. If piracy is like smoking than lack of innovation is like a bullet wound. When you’re getting shot, you don’t take time to quit smoking.
If the money and manpower put into stopping piracy were redirected into innovating the industries, improving their products, and creating new technologies that will make us want to buy songs or movies instead of pirating them, they would have a much better chance of improving their bottom line. Today is a world of instant access and in many cases pirating a television show, movie, or song is simply more convenient. Many who employ P2P aren’t doing it to save 99 cents. They’re doing it because it’s easier.
The real way to make a dent in piracy, increase revenues, and save the industries is through innovation. Clinging on to antiquated models and trying to force people back into them is killing the industries faster than the negative effects of piracy.