Report suggests taking a new approach to understanding offline copyright infringement

Today sees the publication of the first comprehensive review of currently available national and international research into consumers’ attitudes and behaviours to obtaining and sharing digital content offline. Much of this activity infringes current copyright law in the UK.

The report, Changing Attitudes & Behaviours in the 'Non-Internet' Digital World and their Implications for Intellectual Property (1.06Mb) - which was commissioned by SABIP and produced independently by BOP Consulting - concludes that:

• Policy makers urgently need a better understanding of how consumers behave in both the online and offline digital environment in order to provide an enabling environment for business and consumers.
• When consumers obtain digital content they are more interested in factors such as price, quality, and availability of material, rather than its legal status.
• Most of the analysis that has been conducted, which relies heavily on criminology, is unlikely to provide a sound basis for balanced policy. Consumer behaviour online and offline in the digital world needs to be looked at from a new perspective - one that encompasses consumer choice rather than just from the viewpoint of criminal behaviour.
• Major national longitudinal research studies need to be carried out to inform this analysis.

In producing the report BOP Consulting assessed the methodologies used in the existing research and evidence on the subject of offline copyright infringement. The report finds that in terms of content that infringes UK copyright law, copying offline digital content - eg. via the swapping of optical discs (DVDs and CDs) - is as significant as online file-sharing and downloading.

As both online and offline copying is becoming much easier with developments in hardware and mobile technology, the growth of legal and illegal copying has mushroomed. While much of the academic literature looks at this behaviour from the point of view of criminology, research shows that legality is just one of many factors that people may take into account when deciding to consume copyrighted products.

A comprehensive new framework for looking at copyright infringement online and offline is suggested, based on evidence that such infringement is often a consequence of rational decision-making by consumers. Consumers weigh up many of the same factors when infringing copyright content as they do when simply purchasing digital content.

The reasons consumers give for infringing copyright are consistently about the price and availability of the material, rather than its legal status - threats of legal and informal social sanctions, or technology solutions (eg. encryption), do not seem to influence behaviour. Consumers seek content that is competitively priced, quickly available and gives them a great deal of choice, including access to material that may not yet be officially available. Consumers who actively do not want illegal content most often say that it is because they believe that ‘pirate’ copies are of poorer quality, lack ‘authenticity’, and are linked to organised crime.

Dame Lynne Brindley, SABIP Board member, said:

"BOP’s comprehensive framework should allow us to build a better understanding of how people consume creative content today, allow us to test ideas with industry, and help develop our subsequent research strategy and policy advice to Government."

For further information, copies of the research, or interview requests, contact David Humphries, 0207 034 2831

Notes to editors

1. Detailed summary of findings from Changing Attitudes and Behaviour in the ‘Non-Internet’ Digital World and their Implications for Intellectual Property:

The report assesses the methodologies used in the existing research and evidence on the subject of offline copyright infringement, before concluding, from a variety of empirical studies, that:

• Estimates indicate that between 7-16% of the UK population buy discs (DVDs, CDs, & video games) which infringe copyright. Very little is known about other forms of physical peer-to-peer file sharing (e.g. hard drive swapping) and the few estimates that exist vary greatly.
• Demographics for consumers who acquire offline/hard copies which infringe copyright appear to be different from those that engage in online copyright infringement: they are often older, with dependent(s), and are more likely to belong to lower socio-economic groups - ie. they are more ‘ordinary’ than the predominantly younger, well educated, technologically-savvy group who infringe copyright online.
• The evidence is mixed as to whether consuming content through infringement substitutes or complements legal consumption. For example, while the music industry points to falling sales, some evidence suggests that consuming music illegally does not substitute legal consumption but that both types of consumption may sit alongside each other.
• Initial evidence indicates that online downloading and file sharing is substituting offline counterfeit sales. Anecdotally some suppliers suggest that the market for counterfeit content is declining - this is corroborated by falling seizures of counterfeit discs.
• Survey comparisons lead to an interesting conclusion: consumers' attitudes appear to remain more consistent while behaviours seem more likely to change. But this remains speculative as it is unclear whether apparent changes in behaviour are real, or are simply the product of the different methodologies used in the surveys or because they were carried out at different times.

An analysis of the academic research suggests that:

• The sharing of digital content offline needs to be looked at through a new lens. It has been predominantly studied using criminology or social psychology. But these perspectives tend to carry value judgements about what is considered right or wrong which implicitly shape the research. This means that other factors, eg, economic criteria, have rarely been considered. Industry and government surveys suggest that these additional factors are very important to any consideration of copyright infringement.
• There is little research that looks at the effect of ignorance of IP law. Copyright law is complex, and difficult for the average consumer to fully understand (where consumers are aware it exists at all). The default position in previous criminology-based research is that people know that they are breaking the law and make a choice to do so, but this is not empirically proven.

Conclusion - a new framework recommended

In summing up current knowledge, the report proposes a new framework which specifies a number of factors that are likely to impact on whether an individual is more or less pre-disposed to consume certain copyright products, and more or less pre-disposed to obtain these legally or illegally:

Demand factors: a range of personal resources and capacities: disposable income, education, available time, prior consumption, demographic factors and sunk investments in hardware and software

Supply factors: a number of characteristics that legal and illegal channels compete on eg. price, size and variety of inventory, quality, access.

Additional market regulating factors that influence consumption choice: reviews, advertising, peer consumption, the presence of a ‘capable guardian’ e.g. social (group norms), technological (DRMs), or legal enforcement.

The report advocates the use of other theories to understand offline and online illegal consumer behaviour eg. that individuals make rational consumption choices according to an assessment of - and emotional reaction to - the costs and benefits of all options, whether illegal or illegal (Rational Choice Theory). And the theory that suggests that individuals search for fairness and reciprocity (Equity Theory) may usefully help to explain physical peer-to-peer file-sharing, though this has yet to be investigated empirically. Finally, advances in Behavioural Economics (e.g. Nudge Theory), could help explain online and offline consumption decisions by looking at a wider range of individuals’ characteristics (social, cognitive, emotional factors) than have been applied to copyright infringement to date.

2. The report, Changing Attitudes and Behaviour in the 'Non-Internet' Digital World and their Implications for Intellectual Property, was commissioned by the Strategic Advisory Board for Intellectual Property (SABIP) and carried out independently by BOP Consulting.

3. It is worth noting that consumers and consumer studies do not tend to discriminate between breaches of civil and criminal law; in their eyes either an activity is legal or it is illegal. This report therefore also uses the term "illegal" to cover both civil infringements and criminal offences, unless otherwise indicated.

4. SABIP's mission is to provide strategic, independent and evidence-based advice to Government on intellectual property policy, covering all types of intellectual property rights.

5. Dame Lynne Brindley is Chief Executive of the British Library and a member of the SABIP Board. In her work for SABIP, Lynne leads the workstream looking at Attitudes and Behaviours in the Digital Age. She is currently a member of the EC i2010 High Level Group which looks at the development of policy on IP and copyright and public/private sector partnerships for digital activity. Her substantial IP/ copyright experience spans public, private and academic sectors. Lynne has advised DCMS Ministers on the relationship between culture and the creative industries and the implications of IP.

6. BOP Consulting is a leading UK consultancy on the creative economy. BOP works with government departments, economic development agencies, sector development agencies and universities to increase understanding of the creative economy and to devise strategies for exploiting its potential.