Piracy costs Australia $1.37 billion a year, claims AFACT

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The Australian Federation Against Copyright Theft (AFACT) today published a report which it claimed showed movie piracy cost the Australian economy $1.37 billion in lost revenue over a 12 month period — as well as some 6,100 jobs.

During a conference held on the set of Stephen Elliot’s new comedy, A Few Best Men, at Fox Studios Australia, AFACT released the results of a study conducted on its behalf by IPSOS and Oxford Enconomics. The study (available online as a PDF) said practices related to movie piracy – such as illegal donwloading and streaming – caused a loss in revenue of $1.37 billion and of about 6,100 jobs in the 12 months up to July 2010.

At the event, according to a statement issued by AFACT, actor Roy Billing said educating people about the immediate financial impact of movie theft was a good start to motivate change in behaviour.

“$1.37 billion per annum in losses to the film industry is a staggering figure and suggests that we need to act urgently to stem the tide of movie theft,” he said. “At stake is not only the livelihoods of artists, technicians, laborers and service people, but the ability for Australia to compete as a leader in innovation and creativity”.

The $1.37 billion includes damages affecting other industries related to the film industry, as cinema owners, local distributors, producers and retailers lose direct consumer spending. The tax losses to movie piracy amounted to $193 million, as the study revealed over 90 million pirated movies were estimated to have been viewed or obtained within the analysed period.

AFACT Executive Director, Neil Gane, said the results showed movie piracy was detrimental for the whole Australian economy and therefore action should be taken urgently. “The economic damage also reverberates through our entire community, threatening all types of jobs and businesses,” he said.

According to the IPSOS study – which was conducted on a sample of 3,500 adults aged 18 and over – a third of the Australian adult population has participated in some form of movie theft, including under the word “theft” practices like downloading, streaming, digital transfer, physical procurement of illegal copies as well as borrowing or viewing anauthorised copies.

Producer Antonia Barnard told the press conference it was frustrating to know the efforts of producing a movie could be wasted by piracy. “There is a huge amount of creative and financial investment required, and it is a risky enough business without having to deal with the notion that all of that hard work and creative input will be worth nothing if your film is stolen,” she said.

At the end of January another report conducted by Internet Intelligence company, Envisional, purported to reveal that 23.76 per cent of all Internet traffic involved digital theft of copyrighted material, with application BitTorrent accounting for half of the stream of illegal material.

According to AFACT, Australia’s copyright industries were the third largest contributors as a percentage of gross domestic product in the world, while the Australian film and TV industry supports 50,000 jobs. AFACT’s Gane reiterated movie theft could compromise the resources of the Australian film industry.

“The film community is no different than any other sector of the economy that relies on skill, investment and hard work,” he said.

Image credit: myuibe, Creative Commons

83 COMMENTS

    • The thing is, the film studios are acting like there is some sort of alternative to pirating content. If you want to watch the latest episode of whatever is currently showing in the US, there is no way to watch it in Australia without waiting for weeks. When are they going to get off their ass and provide options for Australians to get the content that they want legally?

      • Given how they sell for TV so far in advance (historically), resetting the systems would be a bitch.

        That’s not my trying to defend them… it’s a just saying.

    • The bullshit part is where it “cost the Australian economy”. The figure is a reasonable figure for what it is – to paint a picture of the total cost (according to their calculation) of the amount pirated. It is however unimportant.

      The important part is the wording of the statement. “Cost to the Australian Economy”.
      6000 jobs were lost.
      200 million in taxes weren’t taxed.
      1.37 billion dollars in sales accross australia *didn’t happen*

      According to their stats about 20% of australias population are pirates. These people *ceased to spend* approximately 350 dollars each. (I wonder if that 1.37 is excluding tax?).

      Tell me, if you pirate do you feel suddenly 350 dollars richer? or perhaps you spent that 350 dollars *in the Australian economy* perhaps on petrol? perhaps on food? perhaps on insurance? perhaps you even went to the movies with that 350 dollars (but that would be a horrible feedback loop so you didn’t do that to save the space-time continuum).

      1.37 billion dollars was not lost from Australia.
      6000 jobs didn’t cease to exist. (they ceased to exist in the film industry, and popped up somewhere else)
      and 200 million dollars in tax revenue, that is the biggest joke of all. even if those pirates ARE 350 dollars richer, guess what happens when they finally spend that 350 dollars? MY GOD. The Taxening that will occur!

      • that $350 was spent paying for internet to download the content… so the money actually went to the telcos and created new (different) jobs.
        +1vote for the NBN to help this piracy along…

  1. They have been saying for so long… the industry should have died long ago going by their figures.

    Then again, when you add up the costs of tax deductible services you are no longer using due to piracy… maybe you could get up that high.

    • I also strongly suspect there is flawed assumptions made in this report, for example, one common assumption I’ve seen made when I have read these “reports” on “damages” is the assumption that if someone is downloading a movie illegally they are not contributing to the film in any way.

      So 90 million copies of various films were downloaded, of those 90 million, how many of those people went to the cinema and watched it, or brought associated merchanised?

      • Agreed, just didn’t want to get into those flaws. I like the idea of them counting things that could never, ever, be considered.

        It goes well with the bitshifter in me.

  2. The movie industry needs to stop wasting resources on fighting piracy and focus on actually COMPETING with pirates. The pirates aren’t going away, it doesn’t matter how many moles you whack, another one is going to pop up in its place. Now we have BitTorrent AND the digital lockers both going crazy, and there’s still the traditional FTP/IRC/Usenet to fall back on. Piracy has only been getting easier. Compete! By compete, I mean:

    1. Don’t bother with copy protection. It’s expensive to maintain, it’s expensive to develop, it’s a huge overhead to keep up with the cracks, and all the time, there’s unprotected versions easily available on the pirate networks. So what does protecting it do, other than providing customers with a more restricted version than what they can find for free?

    2. Release everything simultaneously. Screened something on TV in the USA? Release it online, globally, unprotected.

    3. Find new business models. The capability to instantly transfer a duplicate copy of your media internationally made your business models redundant. Find new ways to monetise. Will it be as much as it used to be? Probably not. Nothing lasts forever. But I’m sure with combinations of sponsorship, advertising, micro-payments and subscription models you can find some revenue streams enough to justify the cost of the 5% of content produced that actually of any real intrinsic value.

    • To be honest, I’d pay $3 per episode of Battlestar Galactica and other shows like The Wire if they came out in downloadable DRM high-quality formats as they were released. I’d even put up with bundled ads in the show as well, as long as I knew I could get it when I wanted it, in high quality and without problems.

      I can’t understand why someone won’t let me pay for this!

      • DRM or DRM-free?

        Because DRM, it would drive me insane. I would have bought them all for my HTPC to watch, and then bought an iPad and wanted to watch them there.. to find I’d have to buy they again. Then after buying them again I lose my iPad and figure hey, I’ll get one of those new Xoom’s instead, only to find.. I’m back on the pirate sites.

    • Here is one thing I have never understood.

      When music piracy was big… Why not release mono, black and white, low res, videos. and low bit mono full cd downloads ?

      I know I would have thumped my 56k 500mb and then gone on to buy. I really felt they screwed that up.

      And I really can’t see how films are any different to music back then. Just release poor quality… give us the taste we want.

      tv, meh. not a problem i can think of a solution for. mainly due to the free view Vs internet shit that is bound to rise. I would assume looking towards the pay tv – free view would be a start.

      • Brian – it’s cutting off your nose to spite your face. They knew, even in the early days of Napster, that they could set up a viable music download service and migrate everything online. The problem was that even the most creatively optimistic business cases indicated fairly serious profit declines (as you could never justify selling online digitally at the prices they were charging for CDs). They figured it was more economical to fight piracy and keep the existing revenue lines of CDs alive for as long as possible, instead of embracing online solutions.

        It didn’t work.

        But the movie industry is SURE it’ll work for them!

  3. The damages that these sorts of reports claim are never close to what the “industry” could reclaim, even if all “theft” of movies and media stopped instantly. For the simple fact that not everyone that downloads a piece of media would buy it if it wasn’t available online. Some people just get it because it is there and it doesn’t cost them anything, so if it wasn’t there, or it cost something, they would not be inclined to buy it.

  4. I believe horse and cart owners were pretty pissed off at the automobile industry when it started up as well.

    Fact is, new technologies will always canabalise incumbent companies and their revenue streams. They cite distributors, cinema owners and the industry as a whole loosing major amounts of money due to the use of new technologies.

    If this was any other industry, well they would complain too. What they need to do, is accept the distribution channels have changed, and thus the value proposition is different.

    Maybe 20 years ago $15 a movie ticket was justifiable, today however it’s not. And consumers are responding with their wallets.

    I’ve long believed the industry is well over paid and over staffed. I know I will cop a lot for that statement, but the fact remains: if you are only going to make x-amount from a production, don’t budget for more.

    The industry has changed radically, as have all content industries. In order to remain profitable, we all need to adapt. If you don’t, you will lose money. Just look at the history ebooks.

    • I’ll pay $15 for big sound and huge screen and the experience of going somewhere to watch a movie.

      Bitching about wasting $15 on a movie often makes up the difference in what I think the film was actually worth paying to see.

      yeah, I got no problems with movie ticket prices.

      • It’s so much more than that though. Think about how many people cannot afford to spend $15 a few times a month to watch a movie.

        It’s no surprise that many teenagers are well versed in piracy, many also do not have a large income.

        But the figure itself is irrelevant. It could be $5, it could be $50. My point is this; the market will not bear the price and arrangement the industry is demanding.

        • “Think about how many people cannot afford to spend $15 a few times a month to watch a movie.”

          So? Your argument is because people cant afford to do it, they should break the law. If thats the best you can come up with, we’re all doomed. This is the most pathetic reason to download pirated content.
          By your logic, because people cant afford a new car, they should steal one.

          There are plenty of valid reasons to download content, such as its not available by other means.
          I download, i still goto the movies, i still buy dvds. No i wouldnt be able to afford to purchase all of it, nor would i want to. Some stuff that studios produce is pure garbage and id feel a little peeved if id spent good money on it at the cinema.

          • “By your logic, because people cant afford a new car, they should steal one”

            Except by your logic, if theft were exactly the same as piracy, you would imagine your car being stolen but still be there the next morning.

            Potential revenue is what it is “potential”. It never happened nor can you prove beyond a shadow of a doubt that it would have happened.

  5. I can make up figures to. Piracy added 1.56 billion dollars a year to the Australian economy, due to increases demand of internet usage, computers, hard drives and video streaming devices.

    • That’s actially a very good point. I wonder how many more hard drives, DVD disc’s, media players, wireless networking gear, ethernet cables, media server software, etc. etc. have been solved specifically to watch pirated movies.

  6. Who’s to say that those people who downloaded content were going to pay for it in the first place? You can’t say that one download is one lost sale because it may never have been a sale in the first place.

  7. Personally, because of the lack of a decent streaming or video on demand service for movies and TV in Australia, I am an extensive user of Quickflix. I’ve rented whole anime and TV series on DVD from them — because there is no other convenient way to get it.

  8. “The tax losses to movie piracy amounted to $193 million” … According to http://www.dfat.gov.au/facts/film_in_australia.html, Film Finance Corporation (a govt company) funded $195.6 million to Australian film and television production, $70.5 million directly from tax payers money.

    In fact, Australian film production cost a total of $270 million in 06/07, or $591 million when you factor in TV and foreign productions. So I really do call bullshit on that figure.

    The BSA tried to pull the same thing with software piracy a few years back, claiming 1/3 of software was pirated (a familiar figure…). A draft government report described these statistics as a “self-serving hyperbole”, “unverified and epistemologically unreliable”.

  9. Also got to remember, not everyone of those downloads would be a customer. If 10 people who downloaded the movie had to buy it instead, you would of gotten perhaps 3 out of those people would actually buy the film.

    Theres actually decent research that also supports that piracy will increase sales (in movies) with follow on sales.

    I don’t condone piracy, but its obvious the studios need to rethink their business models.

  10. A pirated is not a lost sale.

    Repeat that.

    Understand it.

    Then come back with a reasonable alternative, AFACT.

    • That should be :

      A pirated *something* is not a lost sale.

      Apparently Delimiter kills brackets and anything inside them.

    • Agreed, The money is not lost.
      You will spend your money elsewhere.. its probably a gain to Australia not to sent billions overseas.
      +1 for pirates.

  11. I think that figure is bullshit because every person i know who may download lots of movies and what not WOULD NEVER HAVE BOUGHT IT ANYWAY.

  12. This study is better than most but is just as pointless.

    If they managed simultaneous region release, and had multiple legitimate digital avenues for purchase, rental, and viewing like itunes and iview most of the problem would go away. It’s telling that it’s hard nigh impossible to find Australian originated content illegally.

    Apple had it right to license some 99c tv episode rentals in the US. If they managed studios on board here I would probably rent a lot more, since it’s still a bit rich making me purchase a full episode for $3.

  13. It’s easy to reach that figure. Multiply the number of illegal downloads by the $47.50 it costs to buy a Coke and popcorn in a theatre and there you have it.

  14. The economy doesn’t magically lose money every time someone doesn’t buy something.

    I didn’t buy a Ferrari this morning. Or the previous morning. Or ever.

    Adding up every day that I haven’t bought a Ferrari means that, over my lifetime, the car industry has lost over $3,000,000,000 because of me.

  15. That 1.37 billion is wrong as 99% of people who download their movies illegally would not pay for them if it was not possible to to pirate it.

    I think piracy helps advertising by increased sharing of media, many people will see a crummy cam copy of a movie they would not normally watch then decide to go watch a proper copy at the movies or buy it.

  16. What a croc..

    They sampled 3500 people then claim 1/3 of Australia has pirated..bullshit!

    How did they arrive at that….creative accounting.

    • Hi bubba, surveying 3,500 people in an area with a population of 21 million gives a margin of error of about 1.66% (provided that the survey is distributed properly). So it’s a fair size.

  17. So, I buy ‘The Expendables’ BluRay plus digital download pack. When I opened it, the digital download is on DVD disc, great it must be good quality… nope, instead it’s a 1GB WMV. 720×576, 1200kbps video and 192kbps Stereo audio. For this and the ‘cool plastic skull case’ they double the price.
    Now, I’ve had a look around and I can aquire a BluRay rip of a bit over 2GB that is 1280×528, 2530kbps video and 480kbps 5.1 audio in mkv format.
    Or even better if I want to go for the whole 4GB+ that could have been put on the DVD that they shipped rather than wasting the disc.
    So tell me when I can aquire for ‘free’ a digital copy of the movie i purchased that is 2x, even 4x better quality than the one they are charging double for us to get. Why do they think people pirate?

  18. This is ridiculous, I pirate more than anyone I know. But at the same time spend more on actual products than anyone I know, mainly music, but the same principles are there.

    It’s mainly a matter of convenience; I could drive down to a shop and hope they have the blu-ray I want. If they do have it I can go home, put it in my player then realise I don’t have the latest firmware for this particular movie. Hop on my computer, find the file, transfer it to a flash drive, then plug it in to my blu-ray player to update it. When that’s done I get to sit through 10 minutes of unskippable previews and piracy warnings before I get the the menu. Then when the movie is finished I need to get up, and swap the disc out if I want to watch something else.

    or

    I could go online download the movie I want, then watch just the movie, no previews etc, from the comfort of my couch. Then be able to watch a different movie without getting up.

    I know which option I would, and do, choose.

  19. I’m with NightKhaos – that figure is bullshit. Whatever the figure is, it’s the flip side of the gambling thing isn’t What we don’t have ripped off us for media is then available for spending on the kids’ education that was otherwise lost to gambling. I’m sick of listening to these fat arsed shiny pants wankers whingeing about losses on an unsustainable business model. Get with it you poonces! You’re meeting buyer resistance just like a lot of other retailers/resellers in Australia. It’s a world wide market. Saddle up for the ride into a new paradigm or piss off.

  20. #1 pirated movie in 2010, according to Torrentfreak;
    Avatar

    Downloaded over 16.5 million times via BitTorrent alone, yet was the highest grossing film of all time with a world wide gross of 2.782 BILLION US Dollars…

    So the most pirated movie EVER, manages to be the highest grossing film EVER. Explain that AFACT.

    hmmmmm

  21. its like the people I work for. they just trapped in a prison of their own paranoia and greed. the media exec’s need to sacrificial goat and the p2p copyright trading is a perfect entity to blame for dismal sales on shit products.

    seriously why would i want to pay money to watch half the shit on the movies or tv. I downloaded prince of persia the other day and couldn’t get through more then 4 minutes of what has to be the worst film ever made. now here is the logic; Mr movie exec sees 500,000 downloads of that film, balanced against dismal ticket and dvd sales. of course the loser will accuse the ‘pirates” of destroying his picture. His twisted logic would be that those punters would have paid to watch if it wasn’t so easy to download.

    of course in another age 500,000 idiots would have gone and watched the film, which after vommitting in disgust at the stupidity of the film, they would have walked out but from the industry perspective they would have still made their dough.

    he doesn’t give a shit that the product was crap. nah of course not. his rich. What the internet does now is allows people to effectively use the product before they buy. All of my favourite films I have watched a dozen times over and will continue to see in the cinemas and such. but when i have a feeling its going to be bad there is no way I’m going to expose myself to a bad investment.

    the problem of course the entire entertainment industry is built on the fact that the ordinary consumer has no mechanism to limit their exposure to such risk. the internet is the field leveller hence their consistent and vicious attacks against it.

    • Precisely Chugs people after downloading, will watch a movie and then go buy it and/or go watch it in the cinema, if it is a movie they like.
      If its crap they’ll just delete the movie, and not bother buying it or going to see it in the cinema.

    • Agree with you … except I enjoyed Prince of Persia. The better example would have been Clash of the Titans.

  22. Just like ALL other studies similar to this one, the figure massively over stated.
    The real figure would be extremely lucky to hit 30 Million at the very MAX.

    AFACT and the like, have to massively increase these sort of figures to justify their own relevance.
    They are wrong and until they stop falsifying the amount and start to be truthful about the real cost, then most people will not believe them.
    A UK study said it cost the UK hundreds of millions of dollars, it was revealed that the real cost was in the tens of thousands, the study authors had extrapolated the figure into the hundreds of millions to be able to justify the cost of the study, which ended costing more then the real figure.
    AFACT probably just recycled that study and multiplied by 2 to get their figure, wouldn’t surprise me.
    There also was a Victorian study with a similar outcome as well with a final figure that was laughable as well

  23. “Australian Federation Against Copyright” .
    So, does this mean from the name that they favour pirating?
    That is, against copyright?

  24. Yeah. Nice assumption here AFACT.

    They are assume that every download is a lost sale. Not true at all.

    Just as an example – would your average joe who downloads say Adobe Photoshop and uses it without paying actually spend the $$$ to buy it if he couldn’t download it? I highly doubt it.

    In fact – the first thing I do when it comes to software is look for freeware tools that I can use.

    So this is the mindset of the consumer which AFACT is failing to identify. The fact that the consumer just wants something that will work for them with no DRM attached.

    The multitude of restrictions and the lack of availability of movies and tv shows through legal means forces Australians to look elsewhere for the entertainment.

    What AFACT and bodies like it in Australia SHOULD be doing is changing tax laws and other laws that see shows, moves, etc get here very slowly and at TWICE the cost.

    Seriously – just look at the cost of video games here in Australia. Its ridiculous. I can buy games from UK or India and have them shipped here and the total cost will be half of what I would pay in stores in Australia.

    Australians are sick to death of Australian Entertainment Industry bleeding us dry. The industry needs to change its business models and petition government to change taxation laws instead of spending silly amounts of money going after people for not paying their ridiculous prices for a restricted product.

  25. Every time that a fta TV station broadcasts a movie and hundreds of thousands of people record that movie then I suppose that must be piracy too. And that must cost the studios heaps. So why do they allow fta TV stations to run movies? AFACT should start by shutting down fta TV stations because they are costing them zillions. BTW, Marina Freri, AFACT stands for Australia Federation Against Copyright Theft, not Australian Federation Against Copyright (LOL!).

  26. Here we go again, the same old rhetoric repeated in a never ending loop kind of like those old cassettes. The fact is music is too expensive and these companies keep claiming Copyright. Well if you read the history of copyright it was never intended to be used as a form of control – have a good read here: http://questioncopyright.org/promise

    Note this:

    :There is one group of people not shocked by the record industry’s policy of suing randomly chosen file sharers: historians of copyright. They already know what everyone else is slowly finding out: that copyright was never primarily about paying artists for their work, and that far from being designed to support creators, copyright was designed by and for distributors — that is, publishers, which today includes record companies. But now that the Internet has given us a world without distribution costs, it no longer makes any sense to restrict sharing in order to pay for centralized distribution. Abandoning copyright is now not only possible, but desirable. Both artists and audiences would benefit, financially and aesthetically. In place of corporate gatekeepers determining what can and can’t be distributed, a much finer-grained filtering process would allow works to spread based on their merit alone. We would see a return to an older and richer cosmology of creativity, one in which copying and borrowing openly from others’ works is simply a normal part of the creative process, a way of acknowledging one’s sources and of improving on what has come before. And the old canard that artists need copyright to earn a living would be revealed as the pretense it has always been.”

    and then this

    “To read the true history of copyright is to understand just how completely this reaction plays into the industry’s hands. The record companies don’t really care whether they win or lose these lawsuits. In the long run, they don’t even expect to eliminate file sharing. What they’re fighting for is much bigger. They’re fighting to maintain a state of mind, an attitude toward creative work that says someone ought to own products of the mind, and control who can copy them. And by positioning the issue as a contest between the Beleaguered Artist, who supposedly needs copyright to pay the rent, and The Unthinking Masses, who would rather copy a song or a story off the Internet than pay a fair price, the industry has been astonishingly successful. They have managed to substitute the loaded terms “piracy” and “theft” for the more accurate “copying” — as if there were no difference between stealing your bicycle (now you have no bicycle) and copying your song (now we both have it). Most importantly, industry propaganda has made it a commonplace belief that copyright is how most creators earn a living — that without copyright, the engines of intellectual production would grind to a halt, and artists would have neither means nor motivation to produce new works.”

    “It is vital to understand that these side effects are not accidents, not unexpected consequences of an otherwise well-intentioned effort to protect artists. Rather, they are an integral part of a strategy that, at bottom, has nothing to do with encouraging creativity. The purpose of this three-pronged industry effort — the publicity campaign, the legal campaign, and the hardware “protections” — is simply this: to prevent the Internet experiment from being carried out to completion. Any organization that is deeply invested in the concept of copy control cannot be pleased to see a system arise that makes copying as easy as clicking a mouse. To the extent possible, such organizations would like to see the same pay-per-copy model that we’ve been using for centuries continue, even though the fundamental physics of information have changed to make pay-per-copy obsolete.”

    Now you see how the “industry” twisted the origins of Copyright around to make $$$$, so this is all lies purely for financial gain by a select few. Copyright was never to control people ever.

  27. AFACT…..get a life ! you conjour up those stats just to save your jobs and the high salaries. I bet, with a complete ban on piracy, the industry would decline, seriously !

  28. I wonder what that 6,100 people would have been doing in the industry given we create so little enduring content for sale. If those 6,1000 people were to have been merely employed in retail and distribution for a foreign product in an economy that is already under high employment pressures then piracy has actually helped Australia. Not saying its right but its got an up side. So perhaps that $1.37B cost could be considered against inflationary and foreign exchange offsets to arrive at what they think it has actually cost the Australian economy to download tat from the US.

  29. Not this again. The movie industry is trying to get the government to do it’s policing for it.

    Let’s look at the details properly shall we?

    Every downloaded movie is NOT a lost sale ok – so lets get that straight. In most cases people had no intention of going to the movie or buying it – it just happens to be there and they download it.

    Here’s the other part of the equation that also gets overlooked. People download movies so they can say to their friends they have seen it. They also go and watch it at the movies with their friends too, so once again a download is not automatically a lost sale.

    I am so fed up with these lying rubbish statistics that are simply put out there with no analysis behind them just to try and get the government doing their policing!

    So, let’s put some figures up – figures that I believe are more valid than the crap the music industry puts out.

    Out of 100 downloads, I would say 75% are from people who were never going to see the movie at the pictures anyhow or who ever intended to buy it. It’s probably higher because movie theaters would probably be broke already if the figures the movie industry claim are valid.

    Then there’s probably 20% that download it and also go with friends to see it and buy it later.

    That leaves 5% who are the real pirates and will never go to the movies or pay for a movie ever.

    So – 95% of the so called downloads are non revenue impacting anyhow. That means of all the hype and crap the movie industry throws around only 5% of it is probably really valid – which is why the movie industry has not gone broke or has suffered any great downturn. Lies, Damned lies, Statistics is what they spread.

    The government on the other hand wants to hear BS stories – it means they have the perfect excuse to control the internet because they claim they are saving potential tax revenue. The Internet is the last place where free citizens can unite and bring down tyrannical governments like that of Egypt – no wonder the government wants to filter and control it and the movie industry are providing them the perfect excuse by which to do so.

  30. Borders, Angus & Robertson are bust… Hardly Normal will go bust… don’t you GET IT!? Large-scale distribution networks are becoming redundant… you’re in the centre of something that no longer needs a middle-man. It simply isn’t difficult to track down and import your own gear any more.

    No, seriously – the phonebook exists, telephone operators are out of business. Either get a new business model, or wither and die…

    • Borders, and Angus & Robertson are going bust because of pressure from the local publishing industry on the government to continue to block parallel imports of books despite the recommendation from the productivity commission. http://www.pc.gov.au/projects/study/books/report/media-release.
      This is an example of the damage that regional restriction cause to a market in the face of a global economy. It wasn’t downloads that is killing Borders and Angus & Robertson but gray imports. Region locking increases copying because gray imports aren’t always an option with digital media. To reduce loss of revenue compete globally don’t try to lock down local markets.

  31. I had to pirate Repo Men because it was only released in one Cinema in Australia (that I could find, and it was in sydney, me in melbounre)

    So yeah if they counted that download as a lost sale then its wrong, because I bought the film at full just released rip off price ^_^

    I’ve been buying allot of movies lately because they are $5 to $15 which isn’t all that much money and the wife and I can enjoy the film. We have a good surround sound setup and projector so we get the ‘cinema’ experience at home. Which currently is good since we have a 4month old.

    We Pirated the whole Battlestar Galactica series because it wasn’t released in a reasonable time frame etc….we have now bought the whole series, at Australian rip off prices ^_^

    I’m looking at buying the Torchwood series, which we pirated as well…..but this time I’m not going to pay Australian rip off prices of $110 per season! Will be ordering it from the UK this time around for under $100 for the entire series.

    Also didn’t some report in the US say these sort of figures that AFACT are saying are bullshit as there is no way to actually gauge if a download is really a lost sale?

    Another thing I’ll add is it really shits me when a DVD I’ve bought has previews for other movies at the start that you cannot skip or an ad telling me that pirating is bad….(Although you can press ‘stop’ ‘stop’ ‘play’ and it’ll go straight to the movie) I have nothing against watching previews for other movies, just wish it was an option rather than being forced upon me

  32. What I find to be the biggest slap in the face is regional pricing. The AUD is worth more than the USD and we’re paying on average twice that of the US for most digital content. iTunes AU $1.69 US 0.99, PC Games AU$80-130 US $40-60, CD’s AU$25-30 US $15. The massive loss in revenue is directly linked to the asking price they want. It’s cheaper to get it shipped via US than to drive down to the local retail outlet and buy it from there.
    I personally have found only a hand full of retailers that charge US style prices here, but the majority are simply ripping folks off. The ACCC should investigate, as this is a blatant rip-off of the Australian consumer.
    As for the Gane’s assumptions that piracy is killing off the film industry here, I’d challenge that. The film industry came out weeks ago claiming that the high AUD was killing off work for them, as it is now more expensive to produce here than overseas.

    AFACT reminds me of the Gerry Harvey and the Australian Retailers Association uber whinge about online retailers, only to be exposed months later by a Commsec study, that they themselves were responsible for their own problems….go figure.

    Here’s a fact: the big music four have an outstanding unpaid royalties bill of up to $6billion in Canada alone. Now if its that bad in Canada how bad is it everywhere else? Questions seriously need to be asked and answered!

  33. Oh… thanks EFA. This morning they were “encourage a skeptical reading of this report”, and broke down a few assumptions. Their breakdown pretty much echos what has been said here, you can read away here.

    But by far the most interseting aspect of their article is an article from Septemeber 2009 that reports on a study that those who download illegal music are likely to spend more on music than those that don’t.

    Curious this echos a lot of andotal evdience I’ve viewed over the years. For example, In the UK, one of my friends from Uni was a very heavy movie and television downloader, in the order of downloading up to thirty hours per week of content (this guy would not cope with an Internet connection with a cap let me tell you). We would go to the cinema at least once month to see the new movies coming out. He also brought DVDs and BluRays are presents for people, and brought music from iTunes and Amazon. All up he spent more on media than anyone else I knew at Uni, and he pirated the most as well.

    It was never about getting anything “for free” for him. It was just the fact that he loved TV and cinema. Now I can’t understand how alienating him and others like him will be benefical to the industry at all.

  34. Most of you sound so selfish. I am truly saddened by your horrible attitude to life, get as much as you can for self, and to hell with everyone else, because in truth, you don’t care about most other people at all. It’s not your ‘right’ to watch what you want, when you want! You are not a king, or a prince! Get over it selfish pigs. Have a good life.

    • I’m sorry, but that doesn’t make any sense, when the industry in question is making record profits, and said industry is putting their hands out and asking for more, who is more selfish?

  35. As others have pointed out, a downloaded movie does not equal a lost sale.

    “$1.37 billion per annum in losses to the film industry is a staggering figure and suggests that we need to act urgently to stem the tide of movie theft,” he said.

    Agreed! The entertainment should definitely move out of the stone ages and catch up to the market’s demand of cheap digital distribution…

  36. i bet the companies doing the analysis did not take into account that a large percentage of pirated movies and shows would not have been watched by the pirates if the piracy option was not available.

    A lot of people download movies they weren’t super interested in. not enough to go see at the cinema, or enough to hire at the dvd store. similarly with TV. but when they watch them, and realise they are better than they thought, they tell others, so i’m sure it adds some revenue too. i think the number is far too inflated.

    and i agree with others have been saying. have international release dates for all movies. don’t prevent australians from legally downloading TV eps from the US the day after they air there, and you might see piracy levels go down. However, the longer the industry digs their heels in and refuse to make these changes long clamoured for by the australian public, the more set they will become in their piracy ways.

  37. I’ll call it for what it is. AFACT is just crazy and poor Neil is at the top of that totem pole. If you spent the same amount of money on alternate better priced movie distribution then you wouldnt have this problem however you can’t see that because your a product of your master, the movie studios. Your going to lose, badly and the sooner you realise your stuffed the faster you can get over it and move on. The studios have finally realised they needed to offer a better product so you introduced 3d, now there was some original thinking. Keep going but for God’s sake you are never going to stop movie downloads, period. When you make it “more” convenient for people to download a purchased movie from you than get a virus from a torrent then maybe, just maybe you will start to get somewhere. This copyright infringement is just tough luck. In the words of one famous actor, “Welcome to the party pal”. Shake yourself out of you 1980’s copyright thinking and deal with the fact the Internet is here to stay and illegitimate content is a fact of life. You can’t police the Internet.

  38. I’d like to think that the period of purchasing videos, music books etc will eventually come to a close. That one day all content will be offered by a subscription that gives you access to particular publishers via a unified online store – you pay x$ a month, and you can watch, listen, or read anything from that particular group that you want. Perhaps a premium subscription that gives you flat access to everything. When your subscription ends, so does your access. If you need to watch something while offline, the files are downloaded to a cache.

    Make the price reasonable and you have basically eradicated content piracy, because an audio/video/text streaming service of this type (if engineered right) would be the ultimate in convienience. No one would be arsed ripping, encoding, uploading/torrenting junk if it was all at your fingertips for a relatively low cost subscription.

    The one thing that’s needed for this to be successfuly is ubiquity – EVERYTHING has to be available via this store, from every company in every country in the world.

    Will it ever happen? Not under the current management of these industries. But once they’re dead, who knows?

    • >EVERYTHING has to be available via this store, from every company in every country in the world.

      The blame for this is not just with the distributors. The Australian government loves to insert itself into every facet of our lives and couldnt possibly allow content from other countries without it passing our – think of the children – nanny state censorship and classification boards. The Australian public service is a substantial part of the content business here – both due to policies and costs. We can allow dangerous food additives like aspartame on the say so of the Americans but we cant allow ideas without them first being vetted.

  39. I used to download them (until i got sent letters -a year ago) but can’t afford to buy them so i don’t.

    In fact i probably went to the movies more often when i was downloading as i was looking into what were good movies, with some that deserved to be seen at the movies.

    so that $1.37 billion and lost jobs is not my fault.

    And why don’t we get given a cd ($1) of the movie when we watch it at the movies

  40. Every year they come out with the same rubbish. A figure that they pulled from their backside. There sole purpose is to get as much money for those who they represent as possible so they are not your friend. The movie makers are far from going broke and if anything the market is filled with crappy movies tailored to social groups just to sell tickets and the end results are rubbish. More movies i see these days are just crap. Its a sad shame but to say they are loosing money is just an insult. Given also that you still cannot legally buy movies to download online means there is still no alternative. This story is about industry lobbying for more proffits.

  41. Well I looked at the report. The figures seem well calculated. However the report was missing one thing.

    I basically was comparing the loss to a market perfect competition. However the pricing strategy for movies in Australia is more of a single price monopoly model. So there is already economic loss in the form of deadweight loss due to monopolistic pricing(Revenue Maximization).

    It would be interesting to compare those figures to the dead weight loss caused from this pricing structure and then the true economic difference could be known….but that is a whole new report entirely.

  42. just to add though the worry is one day AFACT and its cohorts will bribe the right communication minister and get the legislation they want. Its just a matter of time, especially if a liberal government is on the horizon. those people will sell out to the business the moment they walk into office.

  43. that is just what the pirates claim…they aren’t pulling in more than 11 million, tops…the real pirates are cable and net downloads…besides, who needs australia?

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