The impact of the Internet and file sharing on sales of licensed content has been a hot topic of discussion in recent decades. Intuitively, it seems that sales of licensed content, including music, movies, books and games, should decrease, because users have the opportunity to download the same content for free. But the Internet at the same time works as an advertising platform. Users get the opportunity to learn about the works with which they would never have met if it were not for their free distribution through the Internet. Which of these trends is stronger?

Quite a lot of research has been done on the effect of piracy on music and film sales, see the results of numerous studies in the cumulative reviews of Leibowitz (2006) , Oberholzer and Strumf (2010) , Danaher, Smith and Telang (2013) . But the impact on book sales is poorly understood. Especially on the sale of comic manga.

Digital books are now widespread. In the US, they bring publishers more than 40% of the profits, and in Japan - more than 10%. People are gradually getting used to reading books on various electronic devices, including ordinary computers, laptops and smartphones - so publishers may well fear that piracy will affect sales.
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The Japanese researcher Tatsuo Tanaka from the Faculty of Economics at Keio University contributed to the study of this interesting topic. On December 29, 2016, he published a scientific paper on the effect of piracy on comic sales in Japan.

Japan is the world's largest comic book market. There, sales are three times higher than sales in the United States, and the comics themselves account for 36.1% of the book market.



In both countries, the comic book market is oligopoly; in the US, Marvel Comics and DC Comics control 100% of the market in the top 20 category and 96% in the top 50 most popular book category. In Japan, Shuei-sha, Kodan-sha, Shougakkan and KADOKAWA share the market (98% in the top 20 category).


Sales of paper and electronic comics in Japan

The author chose the theme of the Japanese comic market in connection with loud statements by the Japanese anti-piracy organization CODA (Content Overseas Distribution Association). She insists that losses from foreign piracy in 2014 are twice as high as the profits from legal sales. Naturally, such loud statements need to be checked.

Manga Defenders Project

CODA, on its own initiative, conducted an extensive experiment called Manga Anime Guardian Project from July 2015 to March 2016 - it provided the factual basis for this study. Each publisher has selected some of his classic comics as targets in this project. CODA massively deleted unlicensed copies of specifically these comics from all possible file sharing sites. Accordingly, they remained only on a small number of sites that were difficult to find. The author of the scientific work made the assumption that it is possible to compare sales of comics, which have become the goal of massive removal from the Internet within the framework of the CODA project, and other comics.

An analysis of past research on the effects of piracy on sales of books and music shows that there is an endogeneity effect. When content becomes popular, its sales and illegal distribution increase simultaneously , which leads to a serious positive correlation between sales and the level of pirated distribution. Thus, exogenous shock is most appropriate for a qualitative analysis of the sequence of events and cause-effect relationships - external events, such as the forced removal of copies from the Internet, as in the CODA experiment. In this case, we can compare the sample that has been affected by exogenous shock with the control sample that has not been subjected to it. Experiments with endogenous shock have often shown that sales of legal music and films increase after the successful prosecution of pirates by law enforcement agencies, be it the closure of MegaUpload, the introduction of a system of three strikes in France or anti-piracy legislation in Sweden. However, no books based on a real experiment, such as the Manga Defenders Project, were conducted with the books.

The study revealed a dual effect, depending on whether the comic book series is completed or not completed. It turned out that for unfinished series (the release of which continues), piracy does in fact have a substitute effect, reducing sales in the first time after the release of the next comic. On the other hand, for completed episodes, piracy, on the contrary, slightly stimulates sales .

The table shows the correlation between the number of sites on the Internet, where a pirated version of the comic is available, and sales of the comic.



Thus, the Internet works as an advertisement for old manga series that are no longer advertised by the publisher. This “advertising effect” is clearly visible on how sales elasticity correlates with the removal of comics from the Internet, depending on the number of months that have passed since publication.



In other words, when after publication 6-8 months pass, it becomes unprofitable for the publisher to fight the distribution of illegal copies on the Internet, because they actually perform the function of advertising, remind people of the old comic book series - and stimulate sales.