Inside The Mind Of A Book Pirate - Digimarc

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Inside the Mindof a Book PirateWinter/Spring 2017

TABLE OF CONTENTSBackground, Objectives, Methodology 3Executive Summary . .4State of Illegal E-Book Downloading . . . 5Deep Dive into Obtaining E-Books via Public/OpenTorrent Sites . . 9Estimating the Size of the Illicit E-Book Market . . 13

The objectives of thisstudy are to understandwho is downloading illicitmaterial, how and wherethey are doing it, andwhat this mightrepresent to the industryin terms of lost sales.METHODOLOGYThe growing adoption ofdigital formats byconsumers, students,and professionals hasenabled the growth ofillicit downloading andaccessing of copyrightedmaterial produced bypublishers. This is costingU.S. publisherssignificant amounts oflost income.OBJECTIVESBACKGROUNDABOUT THIS STUDYThe survey wasconducted online usingNielsen’s sample of ebook purchases over thepast six months. Fromthere, purchasers wereasked about theirmethods of downloadinge-books and a sample of595* were identified ashaving pirated material.*Sample was weighted based on a profile of illegaldownloaders identified in the Books & Consumers surveyNOTE: The survey research, findings, and analysis provided in this report were conducted and provided by Nielsen.Unless otherwise noted, Nielsen is the source of the data.

EXECUTIVE SUMMARYWho are illegaldownloaders?How and wheredo they download?What are theimplications inlost sales?The majority of illegal downloaders are 18 to 34 years old, educatedand wealthy.à More than 70 % of illegal downloaders have either graduated from college orhave a post college graduate degree.à Illegal downloaders are also slightly more likely to be 30—44 years old and tohave a yearly household income of 60k— 99k.Roughly 30% of illegal downloaders either obtain their content from friendsvia IM, email, or flash drive or from downloading from public/open torrentsites.à Of the 13—16 e-books these illegal downloaders acquire per year, 3—7 areacquired illegally.à 4Shared.com is the most popular torrent site to download e-books, and fiction isthe most popular genre to download.Illegal downloads account for approximately 315 million in lost salesto the U.S. e-book market per year.à This estimate is based on a number of assumptions and are outlined in the study.However, this number is ultimately based on self-reported data, which couldunderestimate the total lost sales to the book industry.

STATE OFILLEGAL E-BOOKDOWNLOADING

WHO ARE THE ILLEGAL DOWNLOADERS?GENDEREDUCATIONGrade School / SomeHigh School34%66%MaleGraduated High SchoolSome CollegeFemaleGraduated CollegePost-College GraduateNielsen, 2017INCOMEAGE1%18 - 2910%41%30 - 44Under 30k47% 30k - 59k17%45 - 5440%32%55 - 6465 13%19%6%4%3% 60k - 99k 100k 36%29%

ILLEGAL METHODS FOR ACQUIRING E-BOOKSWhere Book Pirates Go for E-Books31%Downloaded freefrom a public/opentorrent site(e.g., Pirate Bay)Nielsen, 201731%Downloaded freefrom a public/opencyberlocker(e.g., Uploaded.net,4Shared.com)30%Obtained from afriend via IM,email, or flash driveOn average, downloaders use 1.5methods to acquire e-books illegally27%Acquired from anonline auction orresale site(e.g., eBay)27%Obtained from afriend via a closedinternal network(e.g., Dropbox)

BOOK PIRATES ALSO BUY E-BOOKS LEGALLYObtained from a friend via IM,email or flash driveDownloaded free from a public/opencyberlocker (e.g., Uploaded.net, 4Shared.com)Downloaded free from a public/opentorrent site (e.g., Pirate Bay)Purchased directly froma publisher’s own websiteBorrowed from a friend via Kindle, Nook,or other e-book device-enabled lendingPurchased from an onlineretailer (e.g., Amazon, Barnes& Noble, iTunes/Apple)Nielsen, 201730%29%Accessed from a book subscription service with amonthly fee (e.g., Scribd, Amazon’s Kindle Unlimited)31%29%27%31%32%33%42%Borrowed from a commercial e-booklending service (e.g., Google Play,Amazon Kindle Owners’ Lending Library)Which of the followingmethods have you usedto acquire e-booksduring the last 12months?Acquired from an online auction orresale site (e.g., eBay)27%Obtained from a friend via a closedinternal network (e.g., Dropbox)25%Borrowed free from the e-bookcollection of a public library, schoollibrary, or a library to which yourcompany subscribes23%Downloaded from a site dedicated toout-of-copyright works (e.g.,Gutenberg.org)

DEEP DIVEINTO OBTAININGE-BOOKSVIA PUBLIC/OPENTORRENT SITES

PIRACY IS DRIVEN BY CONVENIENCE AND EASEWhy Pirates Download Illegal E-Books from Torrent Sites58%Convenient / easy51%Free / cheap38%E-Book(s) are not available from online retailers33%This is how I prefer to acquire e-booksI do not think I should have to pay for contentNielsen, 201717%

UNSATISFIED PIRATES HAPPILY TURN TO LEGAL METHODSAlternative Methods for Downloading E-Books if UnavailableRespondents said, “I would have ”33%Bought the e-book(s)Downloaded the e-book/s for free fromsomewhere else24%19%Bought new or used print book(s)Borrowed the book(s) (either in print or digitalform) from a library or a friend15%8%Not acquired the e-book(s) at allTaken another actionNielsen, 20171%

HOW TO DETER PIRACY?CONVINCE CONSUMERS THEIR COMPUTER IS AT RISKNegative Drivers for Downloading Illegal E-Books from Torrent SitesMuch Less LikelySomewhat Less LikelyNo ChangeIf I thought it was putting my equipment at risk by downloading49%If I believed I would be caught doing it47%30%23%44%32%24%If I believed it harmed the author34%18%If it became too technically difficult37%39%24%If I knew the site was making the e-book available illegally36%40%25%Nielsen, 2017If the e-book I wanted was available to buy33%35%32%If e-books were cheaper32%35%34%

ESTIMATING THE SIZEOF THE ILLICIT E-BOOKMARKET

METHODOLOGY FOR ARRIVING AT ESTIMATESourceTotal E-Book Purchasing Population% of Illegal E-Book DownloadersBooks & ConsumersPiracy StudyNumber of Illegal E-Book Downloaders% of Illegal E-Book Downloaders Who Would HavePurchased the E-Book LegallyPiracy StudyPopulation Who Would Have Purchased E-Books Legally% of Illegal E-Book Downloaders Via MethodsPiracy Study# of E-Books Downloaded per Method Per DownloaderPiracy StudyTotal Number of E-Books Illegally DownloadedAverage Price of E-BooksTotal Legal E-Book Sales LostBooks & Consumers

ILLICIT E-BOOK MARKET ESTIMATE

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E-BOOKS VIA PUBLIC/OPEN TORRENT SITES. Why Pirates Download Illegal E-Books from Torrent Sites 58% 51% 38% 33% 17% Convenient / easy Free / cheap E-Book(s) are not available from online retailers This is how I prefer to acquire e-books I do not think I should have to pay for content PIRACY IS DRIVEN BY CONVENIENCE AND EASE Nielsen, 2017. 33% 24% 19% 15% 8% 1% Bought the e