Libraries cost book industry billions

Lost sales

Apologies for the sensationalist title, but that is precisely what came to mind when I read an article about how the book industry has lost billions of dollars because of book downloading. Attributor is a company that produces anti-piracy solutions, and they have conducted a study that claims illegal downloading of books has cost American publishers $3 billion USD. I will resist the temptation to comment on the fact that one should not take seriously a report undertaken by a company that has a commercial interest on the result of said study making the case for their products.

The full report is sketchy at best, but it explains the methodology used to produce such amazing figures. Attributor used some of its proprietary software to track 913 titles throughout several book sharing sites, including RapidShare, 4shared, Upload.com, and Scribd. They tracked a total of 3.2 million downloads in 4 websites, and then extrapolated a total 9 million books for the top 25 sharing sites by allocating their respective market share (there is no indication of the time period of tracking). Attributor then calculated a total market value of $380 million USD for those 9 million books.  Too much extrapolation? Atrributor was not finished. The report says:

“The 913 titles in this study represent works from publishers totaling 13.5% of the U.S. book publishing market. Projecting this $380 million value to the entire industry results in total potential piracy figure of $2.8 billion.”

Translating this into the overall U.S. market, Attributor claims that 10% of the American book market consists of pirated book copies. I am not going to spend a lot of time demolishing the study because it rests on a very faulty assumption, namely, that each download equates a lost sale. Interestingly enough, the full study admits this very fact:

“This study does not to answer the question, “How many of these pirated books would have been purchased legally if piracy was not an option?” Previous piracy studies assume a one-to-one substitution, meaning all pirated material would have been purchased and thus the market value of pirated books is equal to the actual loss, though Attributor feels this is an overly optimistic assumption. This issue will be addressed in a future research phase.”

Wait just a second, then why make a calculation based on an assumption that you admit is “overly optimistic”? Doesn’t that completely demolish the estimates the study is clearly trying to push? Similarly, the book market is very different to other industries, as any calculations have to take into account the existence of libraries. One cannot possibly assume the 1 copy = 1 lost sale doctrine, as it is evidently false. Libraries have not destroyed the book industry, and they never will.

By the way, happy World Book Day.