What's the Lost Sale Doctrine?

Piracy as a practice has been demonized by the entertainment industry because it detracts from sales. The idea behind the lost sale doctrine is that someone who pirates content no longer has the obligation to purchase that content, which contributes to lower overall sales. This is an unquestionable fact of piracy – its existence directly translates to reduced profits for producers.

 

Exactly. So we need the DMCA to protect sales, right?

Not necessarily. Nelson Granados points out that “without access to pirate copies, 70%-80% of the infringers would have just skipped [the movie].” These infringers who would not pay for the movie are likely doing so because the movie is priced at an unreasonably high point. In fact, researcher Joe Karaganis refers to media piracy as a “global pricing problem”. The revenue from a movie ticket or album sale is passed through producers, artists, and distributors, and each step inflates the end price. The higher the price of the material in the end, the less likely a consumer is to purchase it. In this way, piracy is an economic force, ensuring that the final price of goods remains low enough so as not to scare consumers away.

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If the Lost Sale Doctrine isn't true, why is it used?

Given that piracy is primarily a symptom of economic unrest, artists and producers oppose it to bolster their own profits. They resort to fearmongering to lobby for stronger copyright laws, which lets them set prices as high as they desire. This is referred to as the “digital threat” discourse, and it is a large part of what has shaped American copyright legislation. Dr. Giancarlo Frosio of the Stanford Center for Internet and Society argues, “The piracy debate has been led predominantly by the industry supplying the governments with their own biased figures. Governmental institutions have been…making policy based on lobbying, rather than evidence” (7). Laws such as the DMCA were written primarily in response to lobbying from the entertainment industry, and little independent research was conducted into the matter. This is the primary explanation for the harsh penalties that are imposed by the DMCA and other American copyright laws. Strong copyright laws let producers hold their material with an iron grip and raise prices at will, while also allowing them to bring infringement cases to any tangentially involved party in an act of piracy, potentially winning more in damages than were caused by the piracy in question.

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For an idea of the types of fearmongering perpetuated by the industry, watch the video below. It showcases an anti-piracy ad that was placed at the beginning of DVDs in the late 2000s.

 

 

 

 

 

 

 

 

 

 

 

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The Lost Sale Doctrine does nothing but promote fearmongering and stiff penalties for copyright laws. Click the link below to read an open letter in response to an article by an author who supports the Lost Sale Doctrine.