A Bad Week For Pirates, But Online Piracy Still Rampant

From Somalia to Sweden, things didn’t go well for pirates–seafaring and otherwise–this week. Earlier today, a Swedish court convicted four men for running The Pirate Bay, a site that aided in the distribution of thousands of copyrighted songs, movies, and other materials. Each was sentenced to a year in prison and ordered to pay roughly $3.6 million in fines, pending appeals. But what will this accomplish? As Mark Mulligan, a Forrester analyst in the New York Times article states, this will have little meaningful impact on curbing the illegal downloading of copyrighted materials. In the United States, there are roughly 40 illegally downloaded songs for every legitimate download, according to a recent NPR story. And that pales in comparison to the rate in China, where virtually everything is illegally downloaded. But rather than go after individual file-sharers, a tactic that the RIAA has employed in the U.S., the record labels are pursuing a different strategy in China. Partnering with Google (who else?), they’re creating a site where Chinese can download songs for free. The site will be ad-sponsored, so the record companies (and Google) hope to see at least some revenue from all these songs. It’s a great idea, treating people as consumers, not criminals. But, as Bob Garfield points out in the NPR story, online ad revenue hasn’t proven sustainable yet. For example, look at Hulu. Despite it having surging traffic numbers–34.7 million viewers in February, according to comScore–the site is expected to generate about $120 million in revenue this year. That’s not exactly chump change, but when you consider that David Letterman gets $40 million a year, you’re going to run out of money pretty quick. So what’s the magic formula? Assuming that as long as there’s digital content, people are going to download it illegally. If ad-supported models are the only means of recouping revenue, how should it be tweaked so that media companies can actually stay afloat?