There does not exist a single peer-reviewed study that shows a correlation between increased sales and DRM systems.

World of Goo was one of the first indy games to reach large reception of users. Sadly, it takes time before people are willing to spend money on new concepts. Same effect can be seen in cult movies. Most cult movies do not earn a bunch of money. They barely even get copied at first. Blade Runner did not have an issue with piracy, and they still got crap in revenues. I would not be surprised if 90% of the people who have seen Blade Runner did not do so at a cinema. I would guess most people has seen it on a copied tape, copied by someone who thought "Ooo, what is this? this is nice. Let me share that with a friend".

Had World of Goo been released today, they would had much better sale numbers together with current piracy numbers. World of Goo of the past has shown that indy games a worth the risk of buying a copy and testing it out (if one would ignore the paradox).

It should also be mentioned that creator of Psychonauts got more (or close to it) money from kickstarter, than from initial sales. Ie, people were more willing to bet money on something for little or no return, than they were willing to bet money on the original game itself before it was known to be good. Do anyone actually think that DRM would have made the original Psychonauts a massive revenue source?

I'm not aware of a peer-reviewed study saying the other way, either. This is such a weird thing to say. Do you only believe information that comes from peer-reviewed studies?

Many indie developers who might be sympathetic to the anti-DRM cause still choose DRM platforms, because they perceive it makes money for them. Or maybe they choose to make webapp type software, which conveniently avoids the issue while being the most unfree method of all.

Since they are closest to the market, they posses what economists call 'local knowledge'. Some have released numbers to back up their claims, which is more than you've done. (Also, how many people do you think had a VHS copier when Blade Runner came out? 0% of people I knew growing up could copy VHS tapes.) Anyway, I think it is correct to look at market behavior if you want to talk about market behavior, not what bloggers say when they aim to maximize pageviews.

This present a sort of problem in that there is still a need for computers which can run software that wasn't bought through some particular channel such as an app store, therefor there are still computers that can run pirate content.

I have a bunch of games on Steam, I have no idea which ones use DRM but I'd wager strongly that every single one of them is available DRM-free on a torrent website.

Speaking personally the main incentive not to pirate games is the Steam sales and humble bundles which give me games so cheap that I'd really feel like a bit of an idiot jumping through whatever hoops in order to get the games for free.

DRM costs money (dev time, QA, etc.) and may hurt legit customers when done wrong (all too frequent). Rightfully, the onus should be on proving it to be worth the costs, but people add it without even testing the effects.

Why should the onus be on the party making the DRM? It is their product and their copyright, why should they have to prove it is effective?

I don't really think you want them to fail, so I can't see why you would argue that they should continue wasting money?

When people give out best practices, or gives out necessities of the market based on nothing but opinion and theory, it become pure myth and superstition. Sysadmin work which is my line of work, has a bunch of myths. Some people still making firewall rules against win95 ping of deaths, even if everyone in the company is running around with this years gadgets.

But you did ask if I have any evidence of my own, and here I relied on common sense and observations. DRM cost money, in both time, effort and support. Additional, I looked at the indy crowd of movie makes which has only has weak/no DRM, and the indy crowd of games which has all from strong to no DRM. What I can see, there are no major difference what so ever, and both groups often suffer from low revenues in products that later get critical acclaimed as a master piece.

But Im sorry, no, I do not have any research paper to support that observation. That would be the second step, through one can glimpse some truth by checking if anyone are disagreeing with it. Also, since DRM cost money, it should naturally require a higher burden of evidence to become best practice or necessity in the industry.

Minor note about Blade runner: It took several years before the movie reached a cult status. By the time it did, people started to have dual VHS players at home or could call some dude in the campus to do a copy.

Each three of those are what I call common sense, ie, we know them all to be true. Those are also the only assumptions I included in my "I relied on common sense and observations". The rest is observations, which is the first step in a honest and scientific discussion about the effect of DRM. First you do observations, second you collect evidence, third you do analysis and last you create theory. Only once you done each step and reached theory should economic decision be made in the case of including DRM to increase revenue. Before that, only the cost of DRM is know and everything else is speculations. Those speculations has both those that say its great and those that say its crap and there is nothing in the world that will convince them beyond a scientific approach.

The same game released with and without DRM? Different games with and without DRM?

Then I would collect data on piracy rate vs initial buy rate vs long tail and find product types that share those. Then, with all that data, one can start looking into DRM and individual products from groups with shared economic traits but which differ primarily on the DRM question. With a decent sample size, some kind of answer should pop out.

That would be my guess of a simplified study. Statisticians and economics has surely more to say on this and where the corner cases are. There might also be smaller studies to do if one accept some early assumptions.

How do you tell whether the sales delta is driven by DRM or a much, much higher quality artist?

If someone is out there on HN with some ideas, I'd love to hear them, not for this problem (I don't really care), but for other problems that may be difficult to solve later on.

>How do you tell whether the sales delta is driven by DRM or a much, much higher quality artist?

I'm not going to weigh in on DRM vs. non DRM, but you'd get around that problem by explicit randomization. If you have enough observations then differences in quality, etc., literally average out. If you have more information up front you can randomize conditional on the observed characteristics, which reduces the number of observations you need.

Although I'm no statistician either, so whatever.

I agree that the existing data aren't much like the random experiment I was talking about.

There are really just massive statistical hurdles to overcome with this type of analysis.

You could prove that indie games with strict DRM will perform differently than indie games without strict DRM, but extrapolating that to feature, blockbuster games is problematic.

One year later I bought two licenses in Steam.

I also have heard lots of similar anecdotes, I would be very interested in an study about this phenomena.

With music, discovery is a major problem, and pirating allows for music to be heard by a larger audience. Some of those people become fans and ultimately buy tickets to concerts (artists accrete more money this way, incidentally)

If you have 200 game developers slaving away to push out a to push out a 50-EUR game, pirating and then a year later buying it at a 10-EUR sale will not do them as much good.

Buzz is important, and products like games are heavily buzz-dependent. Piracy exposes more people to your product and generates that buzz.

However, while hardware manufacturers give out latest hardware to reviewers in order to generate buzz, they don't just hand out alienware laptops in the local mall. I think piracy needs to be tedious, unreliable and a compromise to the genuine game for it to be effective.

Indie game devs have an advantage here. Indies can release honest demos of their games because they're not necessarily concerned with polishing the turd for E3 or a console release - they're much more interested in polishing the final result and having people buy their game because it is good. Indie game devs can also go back to the shareware model (not that they have to, but they can) which no modern game studio would touch. Indies have that flexibility because they're indie.

I would gladly pay for my favorite shows, but I'm not allowed to. And when they finally do make it to my artificially enforced zone of the world, it'll be 1 or 2 years later, and chances are I'll be forced to watch them with the atrocious dubbing that is mandatory in my corner of the world, and the only option would be to stream the files packed to the max full of DRM.

So, yeah, I'm looking forward to the day when torrenting becomes obsolete but as long as the content industry has their heads in their asses that won't happen. They simply prefer to lose money. I have my wallet right here, waving bank notes around, but they won't take them. From this one can only deduce that they're either pathologically stupid or that power is much more important to them than money.

For the owners and shareholders of TV networks, solutions tend to fall in one of two mutally exclusive groups:

Option #1: Take advantage of all these people who say they'll pay. In the short term, you'll probably lose a lot of money as you cannibalise your existing business model. But it does give you a moderate chance of long term survival.

Option #2: Keep the status quo. In the short term, you'll continue to be mildly profitable, though your long term survival is unlikely.

Since markets reward short-term behaviour, the first option is career suicide for any CEO. While the second won't mark them out as a visionary, it will guarantee them a large salary. What would you choose?

Currently, TV Company X makes a bunch of shows and airs them in the US. Some of them make huge amounts of money, some fail miserably, most are somewhere inbetween. You make money in the US either by selling your content to networks, or putting it on your own network. The networks make money out of selling subscriptions (B2C) and advertising (B2B).

Internationally, you sell your content to networks in other countries. These will be whole bundles of content - let's say 5 shows, each with 3 series. This is a purely B2B business model, with guaranteed future income. Once the local networks have licensed the content from the producer, they promote it and sell their own advertising and subscriptions.

It seems that you're suggesting they replace that international model with one where they sell content online direct to consumers. The producer now has to take over all the marketing of the show, and sell its own advertising. They will also come up against local competition who are now making their own shows. And they've got to build websites with payment systems, and offer customer service. Oh, and deal with local regulators.

It will take a very long time to set up that new business model, and while they're doing it, they've lost all the guaranteed income of just licensing it to local networks. Their share price tanks as a result, and they have to deal with Carl Icahn launching a takeover bid.

Then there's the evidence that the number of people who will pay to consume large amounts of content online, while still accepting advertising, is still relatively small internationally, because not everyone has the technical capability or inclination to do it.

That is why it loses a huge amount of money in the short term. TV producers can't say 'iTunes or whatever'. They have to hire departments of people to build cashflow forecasts and business models that they can justify to shareholders. And if the CEO of TV Company X turns out to be wrong, they've lost their job with the $10M per year salary.

In the long run, it probably will be the case that TV will be distributed like you say - aired through the internet, pay-to-play. But if it's not happening quickly enough for you, then just download the torrents. It's more profitable for TV Network X to ignore the money you're offering than to change their entire business model so they can accept them.

That model has been a disaster (for music companies) as they take all the risk for the failures, while Apple gets a relatively large proportion of revenue from the winners.

I was merely trying to show how the market landscape is not the rosy "piracy is always good" situation TorrentFreak tends to suggest it is.

I don't get where this personal attack is coming from or why what I said prompts passive aggression, but I'll concede the point that I'm frustrated with an industry that prefers to whine about piracy instead of just selling stuff to people. And for what it's worth they don't make those shows, they just market them. Or, you know, fail to market them.

Now we've crossed into fantasyland, of stuff you've just made up because it flatters your viewpoint.

Film studios provide enormous amounts of resources for the making of movies. Furthermore, it's common for movies to be part-owned or whole-owned by people involved in their production. It's not like the music industry. Top producers, backed by lots of monetary and social capital, make these shows happen. Often writers and directors are also producers. Sometimes people get screwed (famously Peter Jackson) but this seems to happen to few makers with critical jobs, and you'll note he didn't get fooled again.

Of course it is not the case that assorted writers and actors and artists can get together and make a hit show with no expert knowledge. TV shows are very, very hard to make. We're not talking about an exploited proletariat of TV show makers here.

Film director here. I'd recommend spending some time Googling "Hollywood accounting".

It's EXTREMELY common for directors to get screwed out of profit deals on films - so much so that the default advice to new film directors is "assume that you'll never see any money from your points on the deal, no matter how profitable the film is."

Peter Jackson's case is not unusual because he was screwed, it's unusual because he fought so hard and so loudly.

I also dislike the implicit assumption that the category of "people who make movies and TV" is "directors". Some directors take a major role in production. Others are tools in a chain, albiet important and highly paid ones. There are lot of people who bring about movies and TV that aren't directors. Vince Gilligan rarely directs, for example.

It's also discrimination by discrimination. I'm not in the US, even with ethics and wealth I do not have the option of buying HBO to watch Game of Thrones. My "legal" options are to 1. wait a year for the DVD box sets or 2. wait two years for a shitty dub

For some reason I can't quite put my finger on, all of these options not only suck hefty amount of balls but do so even more when the communities I interact with and share an interest in watch the episodes at or around release (also note, TV series communities don't maintain "spoiler alerts" for 2+ years after episode diffusion).

that takes the cost of HBO and quadruples it if not more. I just received my legal copies of season two, it was 34.99 from Amazon. HBO could have had that money many months earlier if they would simply sell the show via iTunes or similar.

I would really quite gladly pay to get it at the same time as the US. They've lost a customer, but apparently they don't care.

Second, Steam is an example of a DRM-capable platform that gets things right. Steam reduces piracy because Valve made it so easy to part with your money. They also release their games internationally ASAP. People who object to the treatment of potential customers by media companies praise Steam.

Finally, your use of the WoG piracy rate is disingenuous; as I recall, the developers released those numbers along with the sentiment that it was nothing to worry about.

Sure? I actually did buy the books and am going to buy the DVD-collections, just because I have seen it/read it, thanks to piracy. Somehow win-win situation.

PS: sorry for the naive style, haven' t mastered the sharky way of saying things (yet)

This delay actually impacts on the UK broadcaster as they pay for the rights to show a programme but by the time it is shown many of their target audience will have downloaded the episodes. Same thing applies to movies. Works in reverse too with things like Doctor Who.

There really doesnt appear to be a good reason for these delays between national markets other than "that is how it has always been done".

If you're allowed to. Being non-US my money isn't good enough, apparently.

In Rainbows.

From a U.S. perspective (mine): Increasingly (well, it's a long-standing practice, now), film and television production companies move production abroad to take advantage of lower production costs (labor, et al.).

At the same time, they insist that I not source my viewing material from abroad -- that I not take advantage of lower foreign costs for the distributed media.

Well, this is a loud and clear fail, from my perspective. What gives them the right to access such advantages while denying the same to me? And... by moving their production abroad, they reduce the work and -- supply and demand -- wage levels available in this country.

If they want to "import" cheaper labor, etc. into their production costs, I should be able to "import" the cheaper foreign distribution product.

Otherwise... I'm in the position of an increasing number in the U.S. who have simply decided, "fuck them".

It's amazing how "free traders" suddenly find all sorts of arguments to the contrary, when free trade threatens to cut into their bottom line. Mostly, they're just another set of hypocrites. Dangerous ones, from my U.S. perspective, because of the way they are increasingly screwing us over, economically.

I don't begrudge the rest of the world advancement. I begrudge the self-serving in my own society who sell out a portion of their own population for their own personal benefit. I -- and I think we all, here in the U.S. -- could do with a few less knicknacks in return for a more healthy level of social equity including particularly e.g. access to healthcare, good schools, and livable wages at reasonable quantities of work hours.

And maybe other societies could do with a bit less brain drain and a bit more balanced social development. Less of us propping up foreign dictators past their and their regimes' natural lifespans.

I guess I've gone and gotten all non-technical on HN, here. But... our technical decisions, such as production sourcing, are directly involved in this.

When companies can move their production around, but people stay stuck in place (and as often as not, under repressive regimes), you do not have "free trade".

The labor portion of the equation is not free.

P.S. Sorry, that may have ended up a bit (or more) far afield from the original discussion.

(Continuing with the perspective) Even at the "inflated" U.S. prices I see, I tend to purchase materials I find good and where I am not overly offended at the funding model (as one example, I've been a long-time supporter of O'Reilly press and have not gone out pirating books). But I'm damned well not going to be preached at by these hypocrites, any longer, nor by their hired guns who now think (I hope, still not entirely correctly) that they run this country.

I think the U.S. could do with an overall rousing, depression-lifting round of "fuck them".