HADOPI Says: Let’s Try Cutting off Nose to Spite Face

Torrentfreak wrote last week about what is apparently the latest study to show that filesharers are also disproportionately the high-end spenders on media goods–in this case with regard to movies, which is a significant result since movie piracy is often said to have a high rate of substitution for legal sales.  The funny part is that the study isn’t available because it was (allegedly) buried by its unnamed sponsor.  But apparently someone at the German firm that conducted it, GfK, was sufficiently annoyed to leak the story.  Mike Masnick then noted that this is the latest in a pretty long line of studies to show  correlation between filesharing and media spending.

But Mike didn’t include one of my recent favorites:  a study released last January by the French HADOPI organization, which is responsible for implementing the French 3-strikes law to disconnect repeat file sharers from the Internet.  Here’s the relevant slide (h/t Jeremie).

Now, they’ve gone out of their way to make this confusing even in French, but basically it says:

  • 7% of those surveyed spend over 100 euros per month  on cultural goods on the Internet.   Among these, 64% admit to ‘illicit use’ or filesharing.
  • 17% spend 31-99 euros per month.  Among these, 57% admit to illicit use.
  • Among those who spend nothing, only about 36% pirate.  (It’s not entirely clear to me what ‘licit use’ signifies in a context of zero spending, but let’s skip over that).

Here’s a simpler version:

Now, the valuable customers are on the right, and the really valuable ones who spend over 100 euros per month online on the far right. About 2/3 are file sharers targeted by HADOPI.

HADOPI is betting that warnings will be enough to push the percentage of file sharers down–a view the survey says is also shared by 33% of filesharers.   That’s not an illogical assumption, and time will tell if it’s right.   But the evidence suggests that there are lots of ways this bet could go wrong, even if HADOPI survives the inevitable judicial scrutiny in France and at the EU level (and growing political opposition).  If piracy is a sampling and discovery tool for high spenders, then suppressing piracy could depress legal sales.   If–as I’ll argue at more length in a subsequent post–we’re in a mostly zero-sum market in which consumers are maxed out on discretionary media expenditures, then enforcement won’t significantly expand but at best just cannibalize one media sector for another.  Music, games, and movies, let’s say, competing for the same discretionary dollars–and all of them competing with rising, increasingly non-discretionary internet access and data charges.   If we’re in this type of market, then HADOPI is just in the business of eliminating its best customers.  Good luck with that business model.

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19 Responses to HADOPI Says: Let’s Try Cutting off Nose to Spite Face

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