Yesterday I explained that, under traditional doctrines, an author whose book has been put on the internet, unauthorized, and then downloaded, may have suits against three distinct types of entities: the user who uploads it and the user who downloads it (end users); the server who hosts the material, and the intervening network hubs that pass traffic.

Traditional doctrines, however, have been supplanted by immunity provisions found in the Digital Millenium Copyright Act, codified at 17 USC § 512. (The DMCA also implemented several sections that criminalize, among other things, the removal of DRM; those portions of the DMCA have nothing to do with our discussion today.)

So let’s go through our three types of groups, one by one, and see what the DMCA says.

1. The network hubs.

Under § 512(a), you cannot sue these people, ever. I would go into the language of the statute, but it’s boring, and all you need to know is that you can’t sue them. (As I said yesterday, this is a very good thing: otherwise, nobody would ever get internet access.)

2. The service providers.

Under § 512(c), service providers are immune from suit if all of the following conditions hold true:

(a) They do not have actual knowledge that the material is infringing (or if they do have actual knowledge, they act quickly to remove it). You might think “but they have actual knowledge that my book is on their website!” The answer is… probably, they do not. Most service providers have no idea what people put on their site. Furthermore, they often don’t want to know, and so never go looking. And even if they did actually know, you, the author, would often be hard-pressed to prove it–unless the site owner actually posted something like, “Thanks, Ruth, for posting that totally illegal copy of that book! I’ve been looking for it!”

(b) They are not aware of facts that would make it apparent that infringement had occurred. This is also very, very hard to prove. How can a website owner tell that someone’s copyright has been violated? The website owner doesn’t have a list of all the books that are out there. Even if someone puts up a notice saying, “Read the next Harry Potter book!” it may be that the person has an authorized license to distribute it (even though we believe no such thing exists, why would a service provider know that, and why would we want them to police it?), or that the book posted is not, in fact, a Harry Potter book, but a self-published book that someone wants people to read instead.

(c) They cannot receive a financial benefit directly from the infringement. Most service providers profit, at best, indirectly, by charging the user fees to store material.

(d) They must respond to DMCA takedown notifications promptly. This is the part I hear authors complaining about the most–the darned DMCA takedown notifications. Some authors spend hours and hours sending takedown notifications, and then complain that the DMCA takedown notification is the “only” thing they can do. Well, yes, and not even that. And, no. The answer is “yes, and not even that,” because filing a DMCA takedown notification only helps you to the extent the service provider takes down the material. And the service provider is only doing that because if they do, you can’t sue them. If a service provider says, “no, thank you, I will not take down the material,” your only response as an author is to say, “fine, I’ll sue you.” Not worth all that much. We’ll get to the “and no” later.

The last few requirements are often missed by people who skim statute subheadings. These actually aren’t contained in § 512(c); they’re in § 512(i).

(e) The service provider must have a policy in place for terminating repeat offenders, and must implement it. Hard to know, as an author, whether someone has actually complied with this.

and

(f) The service provider must accommodate, and not interfere with, standard technical measures for detecting infringement. There aren’t many ways that a service provider can fail to comply with this, but one of them might work like this: If you needed to have a user account in order to search a particular site, and if user accounts were free, and if you used your user account to identify piracy, they could not ban your user account to prevent you from detecting piracy. If they do, they probably lose their immunity.

If you’re getting the drift of this, it works like this: So long as  a service provider complies with your takedown notifications, you probably cannot sue the service provider. This is the point where some authors say, “That’s not fair! It leaves me with no way to protect myself!”

And that is wrong. Because of the people who acted in this case, two of them–the user who uploaded the material, and the user who downloaded the material–have no immunity at all under the law. Under § 512(h), authors have the right to get a subpoena from a service provider (once you’ve sent the takedown notification) asking the service provider to give up information identifying the alleged infringer. And once you have that information, you can sue them.

“But Courtney!” you are saying. “I don’t want to sue them! That would mean I have to hire an attorney and it would take time and everyone would hate me for suing readers and I would never be able to write anything! It would mean, if my suit were meritless, that I would have to shell out not only for my attorney, but for the other party’s, as well. It would mean discovery, and a lot of negative publicity. I don’t want to have to file a lawsuit to protect my rights. I want to press a single magic button once a year, and I want that to fix everything. How come there isn’t a magic button for piracy?”

To which I say: I hear you. I don’t want to sue anyone, either, ever. Suing people is lame and time consuming. (Heck, I don’t even bother sending take down notifications–I don’t see that it’s a productive way to spend my time. I have to admit I’m pretty utilitarian about these things, and studies show that piracy helps midlist authors in the long run, and I don’t actually believe that copyright is a natural right and so don’t feel like it’s theft anyway. This remark is parenthetical because I’m cabining off my own personal likes and dislikes away from the question of what the law says. Most people will disagree with this statement.)

But we don’t get a magic button, and there’s a reason for it: because magic anti-piracy buttons would be misused, and that would totally suck.

Tomorrow I’ll talk about a romance topic that’s near and dear to all our hearts: Why there is no magic button (to prevent piracy).

One of the things I’ve noticed when talking to authors about piracy is that a surprisingly small number of them understand how the law of copyright online pertains to them. They know what they think should be the law, but very rarely have much of an understanding as to how it actually works out in practice. This is an explanation I have given out individually to several people, but I’m getting tired of repeating myself, and thought that it might be useful to actually write something out so I can just give someone a link.

In order to understand how copyright liability functions on the internet, you need to understand the threat that copyright liability poses to the internet, and the solutions that Congress has come up with to make it possible for the internet to function. This is going to be a three-part blog post, spread out over three days, and it will cover:

• Why copyright law, without limitations, would destroy the internet (this is today’s post)
• How federal law immunizes various service providers from lawsuit, and who you can hold liable
• Why the law we ended up with is actually fairly good (and if anything, not protective enough of users)

The first two will be informational in nature only; the last one, opinion.

So, after the jump: Why copyright law pre-internet days would destroy the internet

Let’s take a look at what copyright law gives you as an author. Under 17 USC § 106, an author has (among other things) the exclusive right to make and distribute, and to authorize others to make and distribute, copies of her work. And if you understand how the internet works, you will understand very quickly how this could lead to bad behavior. One thing I often see happening when authors talk amongst themselves is that they use the words “pirate site” to refer to a specific website. This is an unfortunate tendency, as it tends to conflate the provider of a service (who may be blameless–or at least innocent for purposes of the law) with the person who has engaged in copyright infringement in the first place.

Suppose that Fred has put a copy of your work up online without your permission, and Betty downloads it. There’s the obvious thing that has happened: Fred has engaged in an unauthorized act of distribution, and Betty it has engaged in an unauthorized act of reproduction. But what has really happened?

In most cases, it actually looks more like this:

Fred puts a book up on a website. Betty clicks the “download” button on her computer. Her computer then sends a message to Comcast, her internet provider, saying, “please send this file from that website.” Comcast sends this message to its hub in Atlanta, 500 miles from Betty’s home: “please send this file from that website.” The Atlanta-based hub sends the message on to a neighboring hub in Nashville, which sends it on to Chicago, and from there to San Francisco, where it’s passed through three other computers before it arrives at the server that hosts the book Fred put up.

The server then makes a copy of the book (a reproduction!) and passes it off to its service provider (a distribution!). That service provider makes a complete copy, and passes the file on to its hub (another copy and reproduction!). Every server between sharethisfile.com and Betty’s computer makes a copy of the data, and then proceeds to distribute it.

There are a lot of computers between Betty’s computer and Fred’s server. For instance, between my computer now and my website, there are 13 hops. Between my computer and eharlequin.com are 11 hops. And so forth.

The following two things are true about those intervening computers:

1. They all make a copy of the data involved, without examining it, and then pass those copies on.
2. The vast majority of them are owned by large corporations, with relatively deep pockets.
3. Therefore, under traditional doctrines of copyright, all these corporations are liable for copyright infringement.

If Fred’s distribution to Betty was not authorized, all the intervening corporate computers are now in violation of copyright law, and you, the author of the piece that was downloaded, could sue them for a minimum of $750 per book downloaded. Multiply that by the amount of traffic that passes through their computers, and you can see the problem: no sane company would ever agree to carry traffic, if it came with that potential price tag. They carry too much traffic, and cannot possibly monitor it all.

You might argue that those servers should have a duty to make sure they’re not carrying copyrighted data, but there’s almost no way they can tell that without scanning the data and comparing it with a set of copyrighted information–not an easy task, and one that would make downloads impossibly slow–and internet access impossibly expensive.

There’s a second problem: Fred’s internet provider is quite often someone like blogspot or my own webhost, dreamhost.com. They have thousands and thousands of customers, who each host hundreds of files. If my web provider had to verify that I had the copyright to every piece that I posted on the internet, (1) I would pay about 20 times more to have a website, and (2), they would probably not let me post anything right away–not even so much as a blog post–since someone could always sue them instead of me. So they would have to filter everything I wrote for copyright infringement. Needless to say, that would make it very difficult to interact in real time on the internet–and things like twitter or facebook simply could not exist.

Copyright law has responded to this by reapportioning copyright liability from its traditional boundaries. It has given absolute immunity to transitory service providers–all the computers that lie between Betty’s home computer and Fred’s computer–no questions asked. It has given limited immunity to the person who hosts the files in question, so long as they follow certain rules. As for Betty and Fred? They’re out on their own, wandering in the dark. They get no immunity–nor should they, since they’re the ones who are really acting with intent here.

What does this mean for you as an author? It means that users of a service violate copyright when they post unauthorized materials. Owners of a service, however, do not violate copyright until you either send them a legally recognizable takedown notification, and they fail to respond, or you can prove that they have otherwise engaged in some form of indirect infringement.

And in tomorrow’s post, I’ll talk about exactly how that works.

Now, Vicki has posted the whole thing, in all its trembling, cowering glory on her blog, for you to read. Ever wonder how many boas a romance author has, or what laundry gremlins do? Now you can find out.

Plus, the first of my local versions of courtneymilan.com is now live. Check out my tiny website, just for Australians and New Zealanders! There will be more of these–for people who live in places other than Australia and New Zealand.

What do you think of the modified cover? What do you think of the Australia site? And how should I start placing the “local” sites within courtneymilan.com? It’s a daunting task–there will need to be several languages, and I’m trying to place flags without it looking terribly busy….

What they didn’t do was post slides with the negative reviews. I don’t know if they even mentioned them. [ETA: Angela James tells me that they did mention them.] But those negative reviews were very valuable for me as an author. Here; go read the full spectrum of reviews. They range from one extreme of hyperbole (“This is one of the best debut romance novels I’ve ever come across”) to the other (“This is the single most trashy novel I have ever subjected myself to”).

This is not going to be an “I am a delicate flower” post. It’s not going to be about my feelings at all. No matter what my feelings were about these reviews (and yes I read them all, because even though I am not a delicate flower, I am an antsy debut author who is searching for meaningful data in a world composed entirely of anecdote; and no, I did not ever respond to any of these, nor am I going to now), I realized something halfway through.

Many of the people they were offering my book to were not romance readers. They said so outright in their reviews. This was initially a source of consternation for me. But the non-romance readers split into two crowds. Half of them said, “I do not read romance, and this book did nothing to change my mind about that stance.” The other half said, “I do not read romance, but maybe I should reconsider, because this was a fun read.”

The number of those people who would have read my book had they not had it forcibly shoved down their throats? Zero. The negative reviews were a sign that my book was getting into the hands of a diverse population, not just the regular romance readers who were most likely to purchase my book. The only way for me to forgo those negative reviews would have been to make sure that my book just landed in the hands of the easy readers who already adore this particular type of historical romance. And while that would have been great for my authorial ego, in the long run, it probably wouldn’t have been great for growing my readership.

If nobody hates your book, that means your book hasn’t found its way into the hands of enough new people. And, from an author’s point of view, that is never a good thing.

ms bookjunkie
Julie
Fedora

Send me your snailmail addresses and I will get your books in the mail!

While we are at it, All About Romance is giving away a massive basket of books by debut authors, gift cards, chocolate, and a pink Snuggie. One of the books you can win is mine! Enter a comment to win over on their website. So that is pretty awesome.

And while we are at it, I recently found out that my book will be released in Australia/New Zealand on March of 2010. This means I must escalate my plans to have an international version of my site so that it predates the actual release. You will see a contest relating to that shortly….

Also for the record: Nothing that I say in this post about a price point higher than $9.99 is applicable to what I think of as general-interest fiction: mainstream romance, science fiction, probably even vast swathes of literary fiction, non-fiction like biographies of famous stars… you get the drift.

Also also for the record: It’s obvious hyperbole to say publishing can’t survive at a $9.99 price point. Harlequin Enterprises (my publisher) has been very profitable in these down times. In a given month, they release hundreds of books. One or two of those–maybe–will be a hardcover or a trade paperback. So threats that publishing will disappear if prices are lowered are to my mind demonstrably, provably wrong. Publishing will survive. It is obviously possible to make a price point much lower than $9.99 profitable, and to run a publishing company on that basis.

But this is not to say that publishing won’t change as a result of a $9.99 price, and while some of those changes would be welcome, some of them sound pretty awful to me. In order for a publisher to decide to print a book, they create a profit/loss sheet. I have never seen one. I don’t know what it looks like. I have no idea what goes into it. But in limited form, it goes something like this:

Expected fixed costs: Editing: $W. Cover: $X. Copy-editing: $Y. Author’s advance: $Z. Marketing: $0 (ha ha, just a little joke, I’m kidding)

Expected variable costs: Printing: $A. Shipping: $B. Author royalties (once the author has earned out). (and so forth)

Expected gross income=(# of copies sold) * price * percentage that publisher takes.

The “expected gross income” will vary substantially from book to book. The publisher understands that increasing price decreases number of copies sold. The publisher (ideally) wants to set the price such that it maximizes the expected profit. If there is no price where the publisher can make a profit, the publisher will choose not to publish the book. (Incidentally, the author is making a similar calculus: she’s adding up profits and losses and figuring out if it’s worth her time to write a book. Some of the author’s profits will not be strictly monetary, but that shouldn’t stop you.)

Now, as I said earlier, I firmly believe that anything written for a general-purpose audience is such that the expected profit will be maximized at or below a price of $9.99. This is because I think general-purpose audiences read primarily for entertainment and enjoyment. When you price things within their budget, they will choose to read more; if you price things out of their budget, they’ll choose to either read other things, priced at $9.99, or will engage in some of reading’s economic substitutes, like seeing movies or going miniature golfing. Most general fiction, and certain kinds of non-fiction, have somewhat elastic demand curves: lowering price easily increases demand, and so when you’re looking at your “expected income” line above, twiggling the price down a bit gives you a corresponding twiggle up in the number of sales. You can see this effect in action:  paperback versions of most books sell way more copies than the hardcovers of the same book

But there are some books where demand is not so elastic in response to price. Take, for instance, this book: The Parkinson’s Disease Treatment Book: Partnering with Your Doctor to Get the Most from Your Medications. This is not something that I would go out and purchase, ever, whether it was priced at $9.99, $49.99, or $1.99. If I had Parkinson’s Disease, or a loved one had Parkinson’s Disease, my guess is I would not say “screw this book and its $37.95 price! I am going to go play miniature golf instead.” The number of copies the publisher can expect to sell of this book is probably small, relative to, say, Palin’s Going Rogue. If the maximum price they can choose to put on it is $9.99, do you think they’re going to publish it? My guess is no.

And even if you think that publisher would make money on that particular book about Parkinson’s above, are you sure you can say the same for books like Living with Haemophilia or Amyotrophic Lateral Sclerosis: A Guide for Patients and Families?

The people who need these books really need them, and the people who don’t won’t buy them at any price. Publishers will only publish books that they believe (however rightly or wrongly) will make money. Authors will want to get some minimum compensation for their time–and will at least hope that their advance covers their fixed costs. If there is a book that holds a tremendous appeal for a small demographic, a set $9.99 price tag might not cover costs (either author costs or publisher costs). Books that are needed (or wanted) by a small segment of the population will cease to be profitable, and a $9.99 price tag means we’ll stop seeing some of these books altogether.

Likewise, there are some kinds of fiction that do not usually appeal to the general population. The audience for these books is small, but their demand is insatiable. They would rather pay $14.99, or $19.99, or even $29.99 for these books, than not have them appear at all. The general population usually won’t pick up these books for any number of reasons. Today, these books get published because publishers can charge $29.99 for them and recoup the editing investment–hoping that the small group of insatiable fans of these sorts of work will buy enough copies to make their money back. In a world where books cost $9.99, I’m not sure that will be true.

And maybe you’re thinking–well, so what, Courtney? If most people don’t want to buy those books, why should we care about them?

Well. That’s because those are going to be books written overwhelmingly by minorities: gays and lesbians, african americans, latinos and latinas, certain religious groups. Walk through the African American Studies section sometime, and count how many mass market paperbacks there are–and then compare that to the number of mass market paperbacks there are in the general “romance” or “mystery” sections. Count the number of hardcovers and trade paperbacks. (It’s the hardcover releases that are the true bellwether here: if a book has a planned release that is hardcover only, it is because the publisher doesn’t think a trade/mass market release will be profitable.)

It breaks my heart that books written by and about black people (and by and about other minority groups) are not usually purchased by the general population. But it’s true. And so when people start saying that categorically, no books should ever cost more than $9.99, and state with certainty that all purchases would increase if the price point were just low enough, to the point where it would make up the difference in sales… I just have to wonder if those people are considering the sort of books where you aren’t going to get those extra numbers, anywhere, no matter where you set the price.

A $9.99 price wouldn’t kill publishing. But it would change it. In some ways–in many ways–it would be a good thing. But I think that a hard price ceiling would kill diversity in publishing. It would mean that the only market rational business people could go after was a general purpose market. And I think that would leave us, as a society, impoverished.

I’m not saying that Macmillan is right–far from it. I’m not saying that Amazon is wrong–far from it. I am saying that we need to avoid categorical statements. Some books really do need to be priced over $9.99, or it simply won’t be profitable to produce them. And if we drive those books out, publishing will adapt by not selling them.

(Before you say the solution is then to self-publish, do keep in mind that the author is making the same calculus as the publisher. This is especially true for nonfiction. If the maximum price is one where it’s not worth the author’s time and effort, there is no point publishing whether as a self-publisher or otherwise. Self-publishing may be the answer for some of this, but it’s not the answer for many of these books. If we relied on self-publishing, I suspect that investigative nonfiction would disappear–nobody is going to spend 8 years figuring things out if they can’t get compensation. Self-help books based on useful facts and studies will disappear, for a similar reason. But even authors of fiction written for small demographics will find themselves writing fewer books, as they have to work more to compensate for the reduced income. Self-publishing might save some of the books that would otherwise get priced out of the market, but it won’t save all of them.)

Before I end, I want to repeat what I said at the beginning: This isn’t about Macmillan/Amazon. My goal is not to defend either Macmillan’s or Amazon’s current pricing practices. I have no financial dog in this race: my books (in North America[1]) are already priced below $9.99, and my publisher already prices the e-book version of my book below the print version of the book. I do not imagine a future when a book I write will be released in hardcover. But I do think that it’s naive to think that all hardcover releases are like Stephen King hardcover releases: books set at a price point designed to gouge the public into price discrimination. Some of them are priced at that point because it is the only profitable price at which that book can be produced, and removing the price point means the book won’t be published.

——

[1] A footnote: I started thinking about this question because I discovered my debut novel will be out from Mira in Australia/New Zealand in March of this year. Which is great! And they’ve featured the Anna Campbell quote, which is doubly great. The price tag, however, absolutely shocked me. A friend of mine from Down Under assured me that this was normal: the market there is 7% of the size of the North American market, and so the fixed costs for the books get averaged out over fewer books, resulting in what looks to my US-trained eye like fairly hefty prices. I’m very curious to see how AU/NZ pricing will hold up under increased pressure from global bookstores.

• Inserting citrus fruit into opportune portions of our manuscript
• Made cut-out goats and browbeaten complete strangers into delivering them to friends of ours
• Performed various and sundry forms of voodoo, with surprising effect
• Employed pots of chocolate, and feathers, with aplomb

In all these things, I have to admit that Sara Lindsey–as a general rule–has completely and utterly surpassed all unreasonable expectations. It should not surprise you that Sara Lindsey and I have our debut novels out within scarcely a month of each other. It also should not surprise you that her debut novel, like everything else she has ever done in her life, is a fabulously awesome tour de force. It’s fun. It’s wonderful. It’s exciting. There are explosions, even!

But even better than the fun parts of this book–and Promise Me Tonight will have you giggling like a little girl at various parts–are the parts where you’ll feel all the emotional connection with characters that you want from a romance.

That’s why today is “Buy a Book Written by Sara Lindsey Day” over at courtneymilan.com. It’s also why I’m giving away three copies of Promise Me Tonight on this post to random commenters. And, for yet another chance to win, I’m giving away Sara’s debut novel along with my own for this month’s website contest.

Or, you can buy Promise Me Tonight from: Indiebound | Borders | Amazon | Powell’s | B & N.

Just remember: there’s one thing that authors can and should do in circumstances like this (and, um, always). That thing is: link to lots of different bookstores. If your book is unavailable at Amazon, you can get it at Barnes and Noble or Borders or Powell’s or the Tattered Cover or any of a number of other bookstores. It’s important to link to all those places, not just Amazon. When you link to Amazon you’re sending the implicit message that Amazon is the only place to buy books, and in my opinion, the most important thing to me as an author is that readers can buy my books everywhere possible, not just in one place. If the power is distributed among many, many people, you’ll have more experimentation (please, somebody, with DRM-free formats), more attempts to try some price variation (I would pay more $ for a DRM-free format), different books being highlighted at different stores, resulting in a more diverse environment with more choice for everyone.

I know it’s a pain to set up all those links.

That’s why I created my free (both in price and in distribution rights) ebook linking script, which you can run on any PHP website.

That’s why I also created my free (in price, although see fine print disclaimer) link generator, so that those who cannot run PHP can copy and paste links to multiple bookstores directly into their website.

The real fight here isn’t just over the $9.99 price tag. It’s about whether there ends up being only one place where people go to buy books. I love Amazon. I buy from Amazon. I’m happy that they’re selling my books. But I don’t want Amazon to be alone.

If you care about consumer choice as an author, make sure you give readers choice, too.

Fine print disclaimer, rendered in regular type: my link generator defaults to using my Amazon and indiebound IDs, although it allows you to use your own or use none at all. I set this up this way because sometimes I copy and paste links myself, and I am too lazy to keep adding my Amazon affiliate data by hand. So it is possible for you to use the link generator and for me to get a kickback. If you don’t like that behavior, though, you can turn it off.

There’s a conversation I’ve had before. In terms of authors I fall on the weak end of the “Boo, Piracy!” side, and I especially fall on the extremely strong end of “Boo, DRM!” The basic gist of the conversation was something like this: “Well, you might not think it’s a big deal now, but wait until you see your book on the piracy sites, with all those downloads listed.” Well. Okay. I’ve waited. Now here I am. I am officially a published author. I officially have to worry about whether my sales numbers will be good enough, and whether they’ll justify another contract. I have, in fact, lost sleep over this.

You know what makes my head hurt when I worry about sales numbers and contract renewals? The fact that one of my local Borders didn’t get their shipment of my books in for two weeks, and worrying that this might be more than just a local error. You know what will make people buy my books, faster and with greater likelihood, than if I spent 20 hours a week filing takedown notices? Their finding my book in Target where they stopped by to get lightbulbs.

My guess is that maybe, maybe, 1% of the people who download my book will actually read it, and maybe, maybe, 1% of the ones who actually read it would have purchased it. I absolutely despise these “estimates” of the cost of piracy that just take the number of downloads and multiply it by the cost of the book, because that has no basis in reality.

The most recent such estimate has hit the twitter/authorosphere by means of Publisher’s Weekly, in which Attributor estimates that piracy costs the industry “as much as” $3 billion in lost sales. Already, this has been turned into “pirates cost the industry $3 billion!” Sugar plums dance in heads, as people imagine what their sales would be like with another 6 zeroes attached to the end.

But the study (you can read the whole thing here) isn’t worth the paper it isn’t printed on, and its findings have been lied about by the very people who ran the study. It is so egregious, that I am angry just thinking about it.

So let’s start with first things first: Note the source. Attributor is not a scientific outfit. They are not economists who have been trained to determine this sort of thing. What “Attributor” is, is a fee-charging service that tries to stamp out piracy for you. This means that Attributor has an incentive–a financial one–to convince authors and publishers that there is money to be made in stamping out piracy. Beware anyone with murky motivations.

Now let’s move on to the methodology.

Attributor estimated the cost of piracy at $3 billion dollars using the following methodology:

1. It used the titles that it was tracking–that is, the titles where people had paid it money to hunt down and remove illegal copies. These titles are not listed in its methodology, but Publisher’s Weekly listed them as titles like, “Girl with the Dragon Tattoo” and “Angels and Demons.” Not precisely representative of book downloads in general.
2. Somehow, it figured out what “market share” each potential hosting site represented. The methodology does not explain how it figured that.
3. Four of those sites show how many “downloads” a title has. Using the estimated market share in part 2, Attributor stated that these sites represented 36.4% of all downloads. So it figured out the number of downloads by taking the number of downloads from those four sites, and dividing that number by 0.364. This gave them 9 million copies of books sold.
4. Attributor looked up prices for these books, and multiplied price by downloads. This gave them a figure of $380 million.
5. It then estimated that the 913 titles it was tracking represented 13.5% of the book publishing market. Again, no explanation is given as to how they measured this. By number of titles? (not possible; there are more than 10,000 books available for purchase). By percentage of books sold, per BookScan? I don’t really know where they get this number, but it’s pretty clear that the titles listed by Publisher’s Weekly represent very, very popular titles, and I’m not sure it’s fair to extrapolate from one set of books to the other, especially since their own findings demonstrated that there was variability in download rate for different types of books. In any event, they took $380 million and divided it by 0.135, which gave them $2.8 billion.
6. They added $200,000,000 to the number to make it nice and round. No, I’m not joking. That gives you an idea about precisely how scientifically accurate this study is.

These numbers are useless. In the study’s methodology, it acknowledges that these numbers cannot even attempt to estimate financial loss:

(study here; page 5).

Which, of course, is why, Attributor, in announcing its findings, announced it thusly:

You know what I call that?

I call that dishonesty. The numbers themselves are drawn from nowhere, are unexplained, and use estimates that the survey methodology itself acknowledges render it useless for the determination of loss. But Attributor–who makes its money from publishers scared of piracy–has itself used those numbers to claim something that they can’t actually claim, and those numbers are now being disseminated around the web by people who call this fact.

Piracy is bad. But you know what? So is a dishonest representation of those findings, especially when those findings then become part of the debate about what should be done about piracy.

I am firmly opposed to piracy. But I am also firmly opposed to lies about piracy, and this is a lie, both in the “damned statistics” meaning of the word, and in the “knowing misstatement of the truth” sense of the word.

Shame on you, Attributor, for your misleading press release, and for your blog post stating in certain terms what you, yourself, internally said you hadn’t even attempted to estimate.