For years, we've pointed out that many claims of "losses due to piracy" are incredibly misleading, but there are different levels of misleading. The first is the claim that every download is a lost sale. While that was popular in the early days, most researchers (finally) avoid this sort of claim, though a few will still try to sneak it in as something along the lines of "value of pirated goods," and then the press will run with that number without making the distinction. A second order of misleading is the claim that whatever "losses" are calculated are "losses to the economy." We see this all the time, with various maximalists insisting that without stronger protections that somehow this money goes away from the economy entirely.

Matt Schruers, over at Project DisCo has a good post discussing this exact point, noting that infringement leads to a redistribution of income. We can argue over whether or not that redistribution is good or bad (or societally beneficial or not), but to claim it's an overall loss to the economy is clearly wrong. He notes how rarely this even comes up in the discussion, which is unfortunate. However, he also points us to this hilarious Adult Swim ad, that I'd not seen before, which explains how piracy feeds babies (except, of course, TV piracy): Youtube link

Matt makes it clear that this is, in no way, a defense of infringement, but rather just a reality. If we're going to be talking about copyright reform, the discussion should be honest, and that means not pretending that the money just disappears from the economy entirely. Like any redistributive economic system, it creates some winners and some losers, and a thorough economic analysis would study carefully who those winners and losers are, and whether having those winners and losers matches up with what the law is supposed to do. Similarly, recognizing that there are always some losers whenever you shift around a redistributive system, it can be worthwhile to look at whether or not it's necessary to do something to help out those who end up with the short end of the stick.