Do “Strikes” Programs Help to Reduce Piracy?

Several countries including the US and France have implemented so-called “strikes” systems to warn and punish P2P file-sharers. The goal of these programs is to reduce piracy, but do they have any effect on people’s download habits? Music group IFPI believes so, and has some numbers to back up its claims. The group further notes that piracy through ripping software and cyberlockers continues to rise.

After years of negotiating and planning the U.S. “six strikes” system finally went live in February.

The Copyright Alert System follows the example of French three-strikes law Hadopi, with the difference that Internet providers cooperate voluntarily and repeat infringers aren’t at risk of lengthy Internet disconnections.

The ultimate goal of these programs is to decrease P2P piracy but thus far very little is known about their effectiveness. About a year ago a study was released which showed that iTunes sales were positively impacted by Hadopi. An odd result, mainly because the effect seemingly occurred in 2009, before the law went into effect.

When the study was published we pointed out that there are alternative explanations for the findings. In addition, looking at overall digital revenues from 2008 to 2009, we see that there was actually a decrease in France, while digital revenue was up in nearly all of the comparison countries used in the study.

TorrentFreak contacted researcher Brett Danaher who conducted the Hadopi research and was also involved in the recent study which showed the Megaupload shutdown positively impacted movie sales. Danaher says that he stands behind the results but is open to exploring the effects of Hadopi on other products.

“I believe that the data demonstrates that HADOPI causally increased music sales on iTunes in France. But I’m interested in figuring out to what degree we can or cannot generalize this to other sales channels, music products, or forms of media, and I think careful research is needed to tease this out,” Danaher says.

Music group IFPI also believes that a decrease in overall sales says little about the effectiveness of the French three-strikes law. IFPI spokesman Alex Jacob told us that there are several indicators which show that P2P music piracy is negatively impacted in France.

“Regarding Hadopi, data shows that the legislation has had a significant impact in reducing P2P piracy levels in France. Looking at the period between the introduction of the law in 2010 and February 2013, the number of people engaging in unlicensed P2P file-sharing fell by 22 per cent,” IFPI says.

That does indeed sound convincing, but the figure is lacking a direct connection with Hadopi and the decrease is not unique to France. For example, earlier this year the research group NPD reported that P2P music sharing fell 17% in the U.S. from 2011 to 2012, long before the six-strikes program started.

While it makes sense that Hadopi and similar measures deter piracy to a certain degree, the overall impact on entertainment industry revenues remains guesswork. The issue is complicated by the fact that non-P2P piracy remains untargeted. According to IFPI these alternatives have increased in popularity.

“While Hadopi addressed P2P file-sharing, it did not tackle all forms of digital piracy, such as cyberlockers and stream-ripping services, which saw their audience numbers grow over the same period,” IFPI tells TorrentFreak.

This suggests that some P2P sharers may respond to “strikes” programs by switching to other means of sharing. In addition, we have seen a drastic rise in the use of VPN services through which P2P sharers can avoid being tracked.

Nonetheless, IFPI is positive about the effect Hadopi has on sales as shown in the iTunes study, as well as the decline in P2P usage. According to Jacob, music industry revenues in France have declined over the years, but not as far as in other European countries.

“We know from the indicators we have that Hadopi has helped reduce P2P file-sharing and helped boost download sales, even if this is not yet been reflected in overall growth for the French market,” he says.

“The logical conclusion is that the French market today, although not yet seeing growth, is in a better position than it would be in the absence of the Hadopi legislation.”

Right now all eyes are on the U.S. Copyright Alert System. Several researchers are gearing up to look at the effect it has on revenues and the prevalence of P2P use. If the evaluations are positive we can expect that the “strikes” measures will serve as a model for other countries, voluntarily or not.