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Less Pirated Material Results in More Sales of Legitimate Product

Last week I wrote about the Copyright Alert System (CAP) that is designed to educate users of copyright protected materials about those protections and the proper way to enjoy protected products; that is, don't steal them. The system will do little to deter hardcore thieves, such as international organized crime groups but will hopefully do a great deal to limit those who may have unwittingly run afoul of the law or the "casual" copyright violator. As I mentioned previously even if people do not appreciate that they are breaking the law by stealing copyright protected materials, having it pointed out to them that their computer has been identified as being involved in such a scheme will likely cause them to focus a bit on what they, or others, are doing.

Going after those who would encourage the spread of pirated materials is also part of the battle to preserve innovation. Late last week the Wall Street Journal reported on a study which has found that "shutting down Megaupload and Megavideo caused some customers to shift from cyberlocker-based piracy to purchasing or renting through legal digital channels." So, shutting down those particular sites which were major sources of copyright piracy has led to a decrease in piracy, or as the study expressed it, has led to revenues which are 6% to 10% higher than when the sites were operating.

Admittedly the study was limited in some ways, such as by the limited number of copyright holders who were involved. And, the authors themselves say, "We…do not know whether the sales increase will persist or if these new consumers will eventually find their way back to alternative piracy channels."

That said, it seems that there is now proof that as pirated materials decrease, or more specifically, as peddlers of pirated material decrease, so does the instance of those substituting pirated material for legitimately obtained products. Or otherwise expressed, the demand for music and movies is not at issue but rather people will break the law to obtain that material if they have the opportunity to do so—if the penalties are remote and access easy.

And do they always know that what they, or others in their house, are doing is illegal? That is where the CAP comes into play by providing some education and facilitating a better understanding of our copyright laws. Ultimately, we will have a better answer to that question as the CAP starts returning results. The copyright ecosystem cannot be sound and flourishing with a narrow fixation on piracy. Instead a protective ecosystem must flourish, to address those "casual" violators, the crime syndicates, and those who would build places where bad behavior is condoned.

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