In news that will likely disappoint litigation attorneys, new research suggests that it may be unwise for producers of digital goods to sue file-sharing Internet networks and individuals who trade copyrighted music, movies and software. A recent study by Tunay Tunca, assistant professor of operations, information and technology at the Stanford Graduate School of Business, and fifth-year doctoral candidate Qiong Wu, found that increased Internet piracy by individuals has reduced demand for commercially pirated products, like illegal copies of CDs and DVDs sold on the black market. Tunca and Wu argue that in the presence of Internet piracy, by strategic pricing, legal publishers can efficiently suppress commercial piracy activity and acquire a larger market segment and profit. This is because the damage done by technologically-savvy individual pirates can be less than commercial ones.
In recent years, with the emergence and growth of illegal file-sharing on the Internet, individual piracy of digital goods has stirred substantial controversy, according to Wu.
“Threatened by this growth, the information goods industry took legal action by suing the file-sharing networks and the consumers who illegally share copyrighted material on these networks,” Qiong said. “In our paper, Professor Tunca and I demonstrate that each one of these two actions aimed to fight individual piracy can backfire by providing strategic disadvantage to legal publishers of information goods. In particular, we show that in the presence of commercial piracy, a higher population of consumers who are capable of individual piracy can increase a legal publisher’s profits and a higher detection and prosecution rate for individual piracy can reduce a legal publisher’s profits.”
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They had to research this? Apearently I have a different view of common sense as I feel this article should have ended with a sarcastic “No Shit really”
The really sad thing is that what it’s been like 7-8 years since Napster Kazaa etc. and they barely arrive at this conclusion. Its a miracle they’re even allowed to run these companies at all with this sort of “brilliant” input.
Dwarf that was a good one lol
I find this very humerous. Soon the internet will be the black market.