Consider these cases:
1. I post 1.4gb of credit card numbers online in the ideal that it will destroy the financial system and create world anarcho-socialism.
My bank sends me a new card with a new number and new expiration date. I am inconvenienced during the time I can't use that card.
2. You write a novel; it takes you two years. I post it online in Kindle, Nook and Sony reader formats.
Hard and soft cover sales are unlikely effected. The fans of the author shun the pirated copy.
3. You take out $20m in loans to make a movie or a video game, and you spend five years of your life on the project, hoping that you can leverage this into a career. I post your game or movie online before it is released.
This happens quite often. Hollywood and the gaming studios are posting record profits. As for how you manage to leverage a $20 million dollar loan on your debut, I'd like to subscribe to your newsletter.
We'll never know how sales are affected because we will never know if the people downloading would have bought it anyway,
From http://www.escapistmagazine.com/articles/view/columns/experienced-points/7225-Experienced-Points-Piracy-Numbers:
How many people use the pirated version as an extended demo?
Assuming someone tries a game and then goes out and buys it, they are basically indistinguishable from the previous group who buys it and then "pirates" it. They're just doing it in a different order. In any case, these two groups combined simply can't account for more than one in nine downloads.
However, if you're willing to entertain an anecdote (which is the only thing we have to work with in a situation like this where nobody will show their cards to anyone else) then the story of iPhone game Tap-Fu is fairly instructive. The creators tracked both pirates and customers as they submitted high scores. They even kept track of how many people (as identified by their device) played as a pirate and then later as a legit customer. The result:
Not one. Ever.
Remember that the plural of "anecdote" is not "data". One case doesn't describe the industry in general. Also remember: None!
We may never know for sure, but there are indications.
...but what's really lost is the newness of the material. If your neighbor reads the newspaper, figures out which are the good stories, and then tells you about them while you're fishing, what incentive do you have to buy the newspaper?
The experience of not receiving the stories as remembered by my neighbor. His ideals on which are the "good stories" probably differ from mine.
We -- the hackers of today -- need to think long and hard about this. By destroying the ability of others to profit from their work,
Wait. What? Also from the Escapist article linked above:
How rampant is piracy?
In 2008, Reflexive looked at the people who submitted high scores for Ricochet Infinity and found that 92% of all players were using pirated copies of the game. Also that year 2DBoy reported 90% piracy on World of Goo. Last year developer Beautiful Game Studios' claimed that Championship Manager was the victim of a 90% piracy rate. During the week the Demigod was released, publisher Stardock found that 85% of all players looking for a game were pirates. All of these are PC titles.
It's very interesting how close all of these numbers are, despite the diversity of the games themselves. Casual and hardcore. Esoteric and mainstream. Indie and big-budget. DRM and DRM-free. Newly-launched titles and and games which have been been out for a year. All of them are from different companies. Yet the piracy numbers are within a few percentage points of each other. I think that, unless we're going to imagine that all of these disparate parties are somehow forming this conspiracy to over-hype the effects of piracy, we can be very confident that the 90% figure is a pretty reliable number.
90% piracy rate two years ago. I can't imagine it's gone down significantly. Yet there are still people profiting from their work.
we may be sabotaging the very people we sought to empower all those years ago.
Just $0.02, or probably worth a lot less in this recession.
I know I don't have all the answers. Most of the time, I'm not sure I am asking the right questions. But I am quite certain that the whole-scale piracy fest in the video game/music/movie industry is not having a significant effect on their profitability.