Not too long ago, piracy was a huge issue in Sweden.  Home to The Pirate Bay, it had extremely high piracy rates across the board.  Then Spotify, a Swedish-licensed music company, launched in its home country, and there was a rapid, clear and sustained decline in music piracy.  However, the rates of other kinds of piracy -- such as for TV and movies -- remained quite high.  Sweden then passed a strict anti-piracy law.  A very short term decline in piracy followed, but within a few months, piracy rates had gone right back up to where they had been before.  That was until Netflix launched in Sweden, and a similar decline to the one seen in music piracy was seen in those other areas.  

For many years now, politicians have tried to frame the issue of “piracy” as a war between two camps: Hollywood v. Silicon Valley.  In the ongoing effort to reform copyright laws, most of the discussion sets it up as a battle between these two parties, and people discuss which side will “win out” over the other.  But what if that narrative is completely wrong?  The story of what happened in Sweden is a good example of what is actually happening around the world, where much of the policy focus is on ineffective anti-piracy laws, while the only thing that’s working is innovation. 

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What if the answer to Hollywood’s concerns about piracy actually come from Silicon Valley?  What if the best way to reduce piracy is to let innovation flow, and to provide better services that reasonably respond to consumers and their entertainment needs?  That’s the pretty clear conclusion that we reached in our new study, The Carrot or the Stick, which analyzed the impact of anti-piracy regulatory changes in six countries around the globe, and compared it to the impact of new, authorized and licensed innovative services. 

Everywhere we looked, the conclusion was clear: attempts to reduce piracy by passing strict anti-piracy laws (“the stick”) had little long-term impact on piracy rates.  They were expensive for taxpayers, with little to show for the money spent.  However, introducing successful services into these markets had a clear and profound impact on piracy rates. 

Sweden was just one example. France spent millions on its anti-piracy effort called HADOPI, only to admit defeat when its culture minister, Aurélie Filippetti, confessed that it was too expensive and had “failed in its mission to develop legal alternatives.” 

Focusing on the stick of enforcement caused France to miss the real opportunity to provide a carrot for innovation. 

Japan put in place some of the strictest anti-piracy laws around, including severe criminal penalties.  And that did nothing to halt the drop in music sales or encourage new streaming services.  Instead, the growth in streaming only caught on much later, after those services were given the opportunity to actually improve their convenience and catalog selection. 

Time and time again, policymakers and entertainment industry lobbyists insist that the focus needs to be on passing stricter anti-piracy laws that ratchet up enforcement powers and penalties.  Yet there was no evidence we could find that the impact of such laws lasted beyond just a few months in terms of reducing piracy. 

New and innovative services that serve the needs of the public, however, seem to show a clear path to decreasing piracy.  By providing the public a convenient way to experience creative content, while also enabling ways to share, communicate and interact with artists, other fans and more, the “challenge” of piracy seems to decline rapidly.

As we look for ways to change our policies or our copyright enforcement focus, isn’t it time that we paid more attention to providing a bigger carrot, rather than a bigger stick?

Masnick is CEO of the Copia Institute.