Volume 11, Issue 1, April 2014

 

Piers
Fleming* Daniel John Zizzo * Steven
James Watson**

Cite as: P Fleming, D Zizzo and S Watson, “Launching a Report on File Sharing”, (2014) 11:1 SCRIPTed 128 http://script-ed.org/?p=1442

 

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DOI:
10.2966/scrip.110114.128

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1. Introduction – File Sharing Review Launch Event

A launch event was held for a major report: ‘A review of the
causes and impacts of unlawful file sharing’. It was hosted by CREATe – the
Centre for Copyright and New Business Models in the Creative Economy, in London,
Stationers’ Hall, on 11 April 2014. The CREATe group is a large multi-centre
project hosted by the University of Glasgow and funded by Research Councils UK.
The event included a presentation of the report by the authors: Daniel Zizzo,
Steven Watson and Piers Fleming and a Panel discussion including representatives
from Performing Right Society (PRS) for Music (Robert Ashcroft), Google (Theo
Bertram), the Open Rights Group (Jim Killock) and the Copyright Hub (Dominic
Young). The panel was chaired by Alison Brimelow. The review considered the
evidence surrounding issues of sales and unlawful file sharing (UFS), the
potential determinants of file sharing behaviour, the potential welfare
generated by file sharing and the distribution of evidence.

2. The Scoping Review Method

This report used a scoping review methodology – in which all
stages of the review are transparent and documented (similar to a systematic
review in medicine) and are as rigorous as possible but allow a broad topic to
be examined – in this case the topic under investigation was the empirical evidence
about the causes and consequences of UFS in digital media. The full list of
inclusion and exclusion criteria and search terms used are available from the
working paper[1].The
aim of this type of review is to avoid biases which might come from a less
methodical approach to gathering literature (e.g. by selection of articles to
be included). In all, 54,441 potentially relevant articles were identified from
academic databases and from stakeholder organisations (e.g. Ofcom). This
initial search was refined to 206 articles that contained empirical data and so
were included in this review. Supplementary material is also available online
and will enable future researchers to analyse in detail and update the review.

3. Sales and Unlawful File Sharing

The report identified that sales and unlawful file sharing
appear to be related but there are a number of potential impacts of this. The
classic argument is that unlawful file sharing (UFS) replaces sales, for
example, the emergence of Napster and increased popularity of UFS coincided
with a decline in music sales.[2]
Most of the evidence suggests sales of music and movies are decreased by UFS.
However, an alternative argument is that sales are boosted by UFS because
exposure to media (via UFS) increases the likelihood of a subsequent purchase.
This could explain why individuals who purchase more music/films also engage in
more UFS. Both explanations are likely to be partly true which means it is
unlikely that every file shared is a sale lost.

4. Determinants of Unlawful File Sharing

It is clear that understanding why people file share would
help to understand the uncertainty regarding the link between sales and UFS and
might provide insight to encourage sales and/or discourage UFS. In the report,
we provide a model that identifies the possible factors (or ‘utilities’) that
may influence UFS behaviour. These utilities were identified by thematically
coding the proposed determinants of UFS presented in the accumulated
literature. Then utilities were: legal and financial utility, experiential
utility, technical utility, moral utility, and social utility. We map studies
based on three dimensions: the determinants of UFS behaviour (the identified
utilities), the market medium (music, software, music, software, movies, videogames,
books, TV and generic) and the measure of UFS behaviour, the quality of which
depends on how closely it measures actual behaviour. These three dimensions
provide a cubic representation of studies on UFS behaviour.

Clearly understanding the why of UFS behaviour is
crucial for identifying good evidence-based policy – the how of UFS
behaviour, but the evidence is skewed both in terms of medium (primarily music,
followed by movies and software, with very little on the others) and in a lack
of studies looking at observed behaviour that causally identifies the crucial whys
of UFS behaviour.

That said, the report does consider preliminary findings
based on the existing evidence. For example, an interesting finding from the
report is that some effects are temporary. New laws or the announcement of new
laws reduced UFS but only temporarily, 6 months in one case.[3]
Another study found high profile lawsuits reduced the availability of files on
torrent sites but only temporarily.[4]
The evidence points in the direction that legal barriers do not offer a
long-term solution and making the legal framework more severe may have
unintended consequences in terms of access while being not as effective as one
would think in terms of reducing UFS behaviour.

5. Welfare

Welfare has been measured using two approaches: a focus on
sales (and benefit to the producers) or a focus on the willingness to pay of
consumers. What evidence there is is mainly about music, followed by movies,
and with very little on other mediums.

We cannot accurately determine the effect of UFS on sales
because UFS has to be estimated and because of a reliance on stated (even
hypothetical) behaviour. These measures appear to be subject to methodological
artefacts, with results sometimes dependent on type of analysis.[5]
These findings link to the original distinction between replaced sales and
promoted sales. More generally, studies on the effects of UFS on sales ignore
the welfare implications for consumers.

Research on the willingness to pay has the opposite problem
of ignoring producers, which may be problematic if one believes in dynamic
effects on creation if creators are not sufficiently rewarded. It is limited in
volume and all based on hypothetical data (mainly with students), this in turn
is likely to lead to an upward bias in favour of UFS.

6. Panel and Discussion

Several themes emerged from the panel discussion. There was
a lively debate about the extent of harm identified by existing research. The
issue of technological change was also raised. On the one hand it was pointed
out that while the exact means of UFS might change the underlying principles
remain. However, it was also pointed out that the availability of different
media changes with technological changes which provides a challenge to stakeholders
in the area. A third theme was the need to consider producers as well as
consumers and the impact on creativity. In general there was a consensus that
it was important that research in this area be led by ‘evidence, evidence,
evidence’.



* Lecturer, CREATe, CBESS and School of
Psychology, University of East Anglia.

* Professor, CREATe, CBESS and School of
Economics, University of East Anglia.

* Research
Associate, CREATe and School of Psychology, Lancaster University.

* The
research was conducted while Steven Watson was at the University of East
Anglia. Funding for this project was from the RCUK via the Centre for Copyright
and New Business Models in the Creative Economy (CREATe), AHRC Grant Number
AH/K000179/1, and from the University of East Anglia.

 

 

[2] S J Liebowitz "File sharing: Creative
Destruction or Just Plain Destruction?" (2006)  49 Journal of Law and
Economics
1-28.

 

[3] See A Adermon and C-Y Llang,
"Piracy, Music, and Movies: A Natural Experiment" (2011) IFN Working
Paper No. 854 Uppsala Center for Labor Studies;
B Danaher et al. "The
Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an
Event Study in France" 2012 January: Wellesley College available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1989240.

Launching a Report on Unlawful File Sharing

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