By what measure is second is miles better than torrents for the rights holder? It's been shown, at least in some cases, that having a free download of something increases the sales of that thing. It can be good publicity. The myth that free distribution is always harmful to sells is one of the things we need to kill if we want to have a reasonable argument of what's the best way to get content from creators to consumers.

Well my argument was based more on the basis of an individual transaction. For example, I want this game should I buy it new , used or pirate it? In such a situation it is clear the order in which they will directly benefit the rights owner.

Of course there may be other indirect benefits, like pirating a game and then recommending it to a friend who buys it at full price and alternative business models.

When you say free distribution it is not quite clear whether you mean piracy or the IP owner providing some free content as a kind of "loss leader".

I have always had a feeling that piracy benefits certain types of goods more than others. For example an obscure indie band with fans exchanging mixtapes or torrents reducing their obscuring somewhat.

OTOH something huge and mainstream being pirated by people who just didn't want to pay for it is probably more harmful.

I see, I misunderstood what you meant then. Obviously if you are going to get the product by some means, it's best for the producer if you pay for it.

However, it's important to note that a lot of the content that is consumed for free wouldn't be consumed otherwise. Just because you are not going to pirate something, it doesn't mean you are going to pay for it. And from the producer's side, it's better if his product is consumed than if it isn't, if the distribution and duplication is free.

As far as free distribution goes, I don't think it makes a large difference whether or not it's through official or illegal means (though it certainly merits studying and testing). Having your product for free on your website and having it on a torrent site probably both make you a sort of "loss leader" in a very similar way. You may have different costs and the visibility to some demographics may vary, but I doubt it matters much.

I just think the benefits of free distribution need to be better weighted. We just have no idea how much companies are losing or winning by having their content pirated.

It is certainly true that some content that has been pirated would not have been bought anyway.

Although I do feel that this might insentivise draconian DRM. If you are going to buy $50 worth of content per month and then pirate everything else you are probably going to pirate the stuff that is most easy to pirate.

For example I know people who pirate just about every PC game because it is as simple as downloading the torrent, installing and sometimes cracking. OTOH they don't pirate iOS games because they don't want to jailbreak their iPhones.

The result is that iOS game developers get more money from them not because they like iOS games more but because iOS is the more locked down platform.