MPEE Piracy costs US economy over $1 million

Nearly two months after the launch of the MPEE report, we’ve run the numbers.  Using common industry methods, the rate of piracy of MPEE in the US and Europe stands at a staggering 98%.  Non-profit research sector losses to MPEE piracy total $345,000.  Losses to the US economy are around $1 million, equivalent to a loss of 20 jobs.*  At this point, we can only guess how much we might have learned about piracy losses if the MPEE project had suffered fewer piracy losses.

It’s silly to talk this way, of course, but it is a pretty close approximation of how our piracy debate is constructed. Chapter 1 of the MPEE report unpacks this in great detail.

Relatedly, and somewhat more seriously, we’ve been engaged through the MPEE project in a small-scale experiment in digital pricing and access.  When we released the MPEE report under a ‘Consumer’s Dilemma’ license, we had no strong expectations for how it would play out.  Internal bets among the team members were all over the map–symptomatic of wider uncertainty about how to price digital goods. Such confusion is the norm in the commercial publishing sector, fresh off the controversy between publishers, Amazon, and Apple about the pricing model for digital books and prior to the Great Publisher Panic of 2013.  But it is also present in the academic publishing world where it is no longer clear which things are expected to be sold and which should be free.  As an experimenter in this area, I’d argue that the publication of long-format writing is governed, at the moment, by three loose expectations:

  • Digital books are sold
  • Digital reports are free (and expected to be CC-licensed)
  • Digital books are free when an author can convince a publisher to bank on the author’s celebrity to make the free version a loss leader for the print version.

I’ve heard a couple compelling arguments from members of the Creative Commons community, in the past 2 months, that by selling the report (for $8 in high income countries) we are violating an important ethical commitment to open access to academic research.  In fact, this has also been my position: I’ve CC-licensed all the other work I’ve been involved with, including reports and edited volumes.  But the norms and incentives around these issues in publishing are still very unclear in practice.  As soon as the thing in question is called a book, there’s not much ‘free’ digital access practiced outside some high profile members of the CC/open access community–the Lessigs, Benklers, Boyles, Doctorows, and so on.  There is clearly a reputational chicken-and-egg dynamic here, in which (1) there are still rewards to working with a major publisher; (2) in which prior prominence in a field improves the economics of free for the publisher; and which (3) then creates further positive reputational feedback for the author.  It’s not clear to me that that this dynamic extends very far into the much larger community of authors who can’t capture those reputational benefits for use in other (paying) contexts, like universities.  Could we have adopted such a model with MPEE?  Yes.  None of the MPEE authors are relying on commercial sales for their next meal.  Conversely, all of us are working in highly grant-dependent parts of the non-profit world, where capture of the reputational benefits is important.  We didn’t do so because we wanted to make a point about differential pricing and inequalities of access.

So, as the authors of a 430 page study that we chose to call a report, rather than a book, we set ourselves up outside these… clusters of expectations.  If we had called MPEE a book and locked it up on Amazon, I doubt the $8 price would have fazed anyone.    The ‘Consumer’s Dilemma’ license, for its part, introduced additional forms of price discrimination that many people didn’t know how to interpret, but which succeeded in dramatizing the price/access dilemma that is fundamentally the subject of our work.  This bit of theater, not sales revenues, was the main point of the license, weighed against our desire to see it circulate as widely as possible.

So how has the circulation and revenue side of experiment played out?  I don’t know.  If anyone has a good benchmark, I’d be interested in seeing it.  It does look like none of us will retire off the proceeds of MPEE.  Here’s what we do know.

Access through piracy.americanassembly.org as of April 26:

  • 3104 ‘free’ downloads (to middle/low-income countries)
  • 3 $2000 commercial reader licenses
  • 285 $8 digital sales.

Access through the primary copy on Scribd:

  • 13,000 ‘reads,’ which Scribd breaks down thusly:
    • US — 1447
    • UK — 282
    • Mexico — 256
    • Hungary — 247
    • Australia — 158

(The Hungary stat gives me pause about the breakdown since it’s a country of 7 million and they can download it for free.  So can anyone in Mexico. Do people like Scribd that much?)

Hard copies through Lulu:

  • 50  (it makes a lovely Mother’s Day gift, people)

Plus we’ve given away a bunch and encouraged others to do so.  And it’s available in a lot of places we can’t track, including The Pirate Bay, Aaaargh, and other sites.  Is that a lot?

 

* Rate of piracy calculated as 100% – (288 [legal sales] / 12,000 [estimated illegal downloads/access]).  Non-profit sector losses calculated as 12,000 x $28.75 [a blended average price per copy.  FYI, this is how the BSA calculated losses.  For damages, it uses the highest retail price, or $2000] .  National economic losses are calculated as non-profit sector losses x 3 [roughly the economic multiplier used for the media/creative sector].  Job losses calculated as economic losses / 50,000 [a generous estimate of average salary in the non-profit sector]

 

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