Wonky math

From time to time I write about wonky piracy math, particularly when I read claims of extremely high substitution rates. Such was the case with "eBooks rise in Russia, but piracy reigns", a recent report on Time's web site.

According to Time, sales of eBooks in Russia "almost doubled in 2012 to $8 million, up from $4.1 million." Within Russia, book sales are thought to total about $2 billion annually, meaning that 2012 eBook sales represented about 0.4% of the market.

Although eBook sales to date remain quite small, various parties estimate that somewhere between 92% and 95% of those who read eBooks have obtained one or more files through infringing sources. Take a midpoint between the two estimates (93.5%), divide the remainder that into the $8 million in legitimate sales and voila! You have an estimate of the impact of piracy: $120 million.

There are at least two problems here. Even if you believe the estimates that 92% to 95% of those who read eBooks have obtained one or more files through infringing sources, that's not the same as "I get 95% of the books I read from an unauthorized source."

The American Assembly has conducted surveys like this, and in reporting the results they take care to differentiate between "have you ever?" and "how much of the content that you possess came from this source?" Their research has generally uncovered that those who source content through unauthorized channels also buy as much or more content through official, paid distribution options.

The second problem becomes evident when you dig under the surface. An estimated 60,000 titles are said to be available for purchase in Russia, barely half of the 100,000 to 110,000 titles offered on the unauthorized sites. As Eugene Gerden reported on Quartz, "Lack of content leads to piracy".

I've argued (strongly) that publishers should clear international rights and offer digital content much more quickly. That said, it's hard for me to see how a book that has yet to be made available in a market is a "lost sale", unless you want to count it as a sale lost because we didn't move fast enough.

As ever, I'm not dismissing piracy in Russia, and I'm not saying it doesn't have an adverse impact in a challenged market. But the math as reported at Time and elsewhere doesn't shed much light on the problem.

Brian O'Leary

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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