Finally, some good news for publishers.
All year we’ve been hearing predictions that the book business is on its death bed — about to be completely transformed by ebooks, then eaten alive by pirates. Yet, despite recent reports to the contrary it turns out that book piracy is on the decline.
Based on piracy loss estimates published by the International Intellectual Property Alliance and generated by the Association of American Publishers, book piracy dropped over 13% between 2005 and 2007 (the most recent year that data is available).
The numbers look like this:
| Year | Est. Loss | Change |
|---|---|---|
| 2004 | 603 | |
| 2005 | 606 | 0% |
| 2006 | 582 | -4% |
| 2007 | 529 | -9% |
| 2008 | na |
Estimated losses in millions, US$.
Source: As published in the annual IIPA Special 301 report. Special thanks to William H. Johnson for sifting through reports from prior years and compiling this data.
Publishers have every reason to be optimistic that this trend will continue. Given the explosion of digital media options, it’s likely that we’ll all read much less in the years to come, further putting a dent in the demand for pirated books.
Reality Check
While I’d like to believe that book piracy is on the decline, I can’t help but be skeptical about these numbers. An email to the AAP inquiring about the report has gone unanswered. The closest I’ve come to anything resembling a methodology is this footnote from the IIPA report:
Books and Journals
The book and journal publishing industry relies on local representatives to determine losses. These representatives base their estimates on the availability of pirated books and journals, especially those found within or near educational institutions. Publishing industry representatives also take into account the number of users in a jurisdiction, the estimated need for the product (based, in the case of educational materials, on university and school adoptions) and the number of legitimate sales. Given the diverse types of products offered by different publishing companies, these estimates cover only a portion of the market lost in each territory and are thus rather conservative in most cases.
Based on this explanation, I get the sense that these numbers don’t include digital piracy. And yet, curiously, whenever we see media coverage of “the ebook piracy problem”, these are the numbers that are used to illustrate just how serious that problem is. Worse yet, media outlets like Times Online don’t even bother to use the most current numbers — instead they skip all the way back to 2005 and use the peak piracy number.
To be fair, Times Online can be forgiven for getting the numbers wrong. The AAP’s own website still uses the $600 million estimate. If the copyright on that page is any indication, the AAP hasn’t bothered to update those numbers in a few years. I guess that’s because they’re too busy fighting piracy. And they’re doing a damn good job of it too. At this rate I think they might be able to stamp out book piracy entirely in the next decade.
Estimating supply of pirated books, estimating demand for the books, and making up the amount of dollars lost? And no one bothered to make up numbers for this year or last? Not terribly convincing.
If there are not more books available on P2P sites now than in 2007, it’s because there aren’t books that people want.
These numbers only go up to 2007 and the explosion of e-book reading started in 2008, so this really doesn’t tell us anything about piracy as more and more people turn to digital books
Mark – Well, piracy *was* on the decline, that much is clear. If it’s suddenly on the rise I’m curious why the AAP hasn’t released the 2008 data yet. You would think that would be a priority for them.
I’m also curious about the e-reading explosion of 2008. Back then digital sales were still only around 1% of the total book market. How much of the total piracy loss would you expect digital piracy to make up? More than 1%? Even at 10% that would still be a decrease from the peak numbers before digital was a widely accepted reading method.
My bigger problem is that the AAP numbers seem entirely made up. And I fear that by raising this issue now the AAP might invent some new digital piracy multipliers. I predict 2008 will be 750 mil, and 2009 will be 1 billion.