Study: Cost of German Music Piracy at $660 Million

COLOGNE, Germany – Piracy cost the German film industry nearly $200 million (€196 million) last year and resulted in $660 million (€524 million) in lost revenue for the country’s music industry, according to a recent study backed by the Berlin-Brandenburg Medienboard, which backs media companies in the region with state subsidies, and the German video game association G.A.M.E..

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The study, carried out by Berlin-based House of Research, looked at numerous academic papers dealing with the illegal download or streaming of copyright-protected works and the possible impact on sales. The study also looked at the impact of piracy on the games industry but said there were not a sufficient number of academic surveys available to give an accurate estimate of the financial damage to video game sales caused by online piracy.

House of Research’s figures estimate that users in Germany streamed or downloaded a total of 185 million films illegally last year and that damage as a result of piracy accounted for around 6 percent of the industry’s overall revenues for the year.

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They speculate that the recent crackdown on illegal filesharer site Kino.to, which led to prison sentences for the sites’ founders and operators, had a direct impact on rental revenues in German video stores. Quoting figures from local anti-piracy group the GVU, the study says video rentals jumped 29 percent, year-on-year, in the week following the kino.to shutdown June 8, 2011 and climbed 41 percent at the beginning of July 2011. The GVU says that positive trend reversed late July after new copycat filesharing sites popped up and rental sales fell back down again.

The new study is extensive and looks at several studies that found that online piracy had little or even a slight positive impact on music and film sales. But the House of Research concluded that while a small number of users use illegal downloads to sample works they later acquire legally, the overall impact of online piracy is negative.

“One can argue about the numbers but that (piracy) damages the industry is undeniable,” said Medienboard managing director Elmar Giglinger. “We now have to find reasonable solutions. As has so often been the case, hardliner positions on both sides has prevented a constructive debate.”

The debate over online piracy and copyright protection has heated up in Germany over the past year and not just because of the legal action against kino.to. The political success of the neophyte Pirate Party, which advocates a radical reform of current copyright law, has forced the issue to the top of lawmakers’ agendas.