Presentation slides for a talk at Novelists Inc.'s 2010 conference in St. Petersburg, FL. Presentation scheduled for October 8.

1. NOVELISTS INC. OCTOBER 8, 2010 Quantifying the impact of piracy on paid content sales

4. “ Perhaps on the rare occasion that pursuing the right course demands an act of piracy, piracy itself can be the right course?” Governor Swann, in “ Pirates of the Caribbean” (itself pirated) Image courtesy of Wikipedia entry on Governor Weatherby Swann

6. Why look at this topic now?

7. An evolving file-sharing landscape Centralized servers Decentralized Multiple sources Source: Magellan research; “Impact of piracy” research paper (2009)

8. BitTorrent terms and tools Source: Magellan research; “Impact of piracy” research paper (2009) Term Explanation Content files The original document (e.g., a movie, an e-book) Torrent files A collection of fragments (hashes) made from a content file Indexes A directory of the fragments (hashes) Trackers Services that point to users with one or more fragments Client software A web interface that uses the BitTorrent protocol Creates, searches, downloads or streams .torrent files Seeds Sources of .torrent fragments Leeches Recipients of .torrent fragments; can become seeds when they receive a complete file

9. How BitTorrent file sharing works Seeds Tracker Leeches Create a .torrent file Host an index Direct leeches to content Search for content Receive files from seeds Provide hashed content Done, leeches can seed uTorrent BitComet Azureus Client software Client software; search engines Source: Magellan research; “Impact of piracy” research paper (2009)

11. The current sample set Source: Magellan research; “Impact of piracy” research paper (2009) O’Reilly Media Measuring the impact on front-list sales since fall 2008 Monitored BitTorrent sites Only PirateBay had more than a few of O’Reilly titles posted Tracked activity of seeds (uploads) and leeches (downloads) Thomas Nelson Began working with Thomas Nelson’s August 2009 To date, no fall 2009 titles have appeared on monitored sites Lag time for Thomas Nelson titles longer than for O’Reilly

13. The number of seeds peaks quickly Source: Magellan research

14. Leeches peak quickly and then decline Source: Magellan research

15. Lag time before seeding varies Average = 19 weeks Source: Magellan research

17. Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets

18. Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets

19. Average sales (weeks after pub date) Average week at which seeded content first seen Unreliably small sample sets +108%

20. Four-week rolling averages Average week at which seeded content first seen Unreliably small sample sets

26. A pirate-site example Source: www.evanglibrary.org.uk

27. Legitimate alternatives exist Source: Evangelical Library web site

28. Source: quantcast.com