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Old 27 Jul 2011, 06:04 PM   #1
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Default Does Piracy Lead To Better Quality Content?

Rights holders have long argued that piracy decreases the quality (and quantity) of content being produced, as producers make less money and ultimately leads to fewer and poorer quality products. But a new study suggests that the opposite may be just true.

A new study written by Atanu Lahiri and Debabrata Dey of the University of Washington - Michael G. Foster School of Business, titled "The Effect of Piracy on the Quality of Information Goods", argues that the facts seems to point to a correlation between piracy rate and the increase in quality of content being produced.

A key point the study cites is that increasing the quality of content is often the most effective way to combat piracy. The study cites HBO programming and even Steam's owners Valve as two companies that have ramped up the quality of their products, and has seen piracy rates decline as a result. In Valve's case, the game 'Team Fortress 2' is used as an example, and Valve's quality-enhanced legal add-ons and updates for the game has "encouraged enthusiastic gamers, who have a strong preference for the latest version, to switch to legal downloads", the study concluded. Valve recently announced 'Team Fortress 2' will be "free-to-play" forever, with revenue coming from in-game purchasable items.

The study also found that when publishers (and distributors) concentrated more on copyright enforcement, it actually led to less revenue, than if they had concentrated more on quality improvement. The rest of the study looks closely at the economic model behind "the manufacturer's quality decisions in the presence of piracy".

The conclusion drawn from the study seems to indicate that less enforcement of copyright laws will lead to greater output quality, which in turn means increased revenue for manufacturers.

You can read and download the PDF version of the study here:

The Effect of Piracy on the Quality of Information Goods by Atanu Lahiri, Debabrata Dey :: SSRN
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