Canadian-backed report says piracy is a market failure, not a legal one

http://www.thestar.com/business/article/956637--geist-canadian-backed-report-says-music-movie-and-software-piracy-is-a-market-failure-not-a-legal-one

by pwg • 15 years ago

135 44 15 years ago

thestar.com

jat850• 15 years ago

I would highly recommend Michael Geist's blog and writing to anyone who follows piracy issues.

http://www.michaelgeist.ca/

zackattack3• 15 years ago

Thanks. Why are you interested in the issues?

FreeKill3• 15 years ago

It makes sense to me. I have a friend of mine that doesn't live in the US, and she says some movies and tv shows are 6 months to a year late coming to her country, even though they are advertised and hyped up all over the internet. Before the internet, it wasn't as bad because if a movie was coming out in the US, people in other countries didn't really hear about it much due to a sandboxing of each market. Now, it's extremely difficult to avoid, and it generates hype for content that may not be satisfied for months.

While obviously, that doesn't excuse piracy, it definitely plays havoc with the marketplace. The rights holder desires to bring a product to that market on their own timetable. Unfortunately, advances in technology and globalization of the marketplace make it increasingly difficult for someone who desires that product to wait for these arbitrary deadlines and legally obtain it, especially when convenient, simple options to get it immediately exist.

While it may not be the most profitable solution for a content creator to focus on legally making their content as available as possible, it would seem it is definitely the best way to combat piracy as many users would consume the content "as intended" if only the option was available to them and affordable.

electromagnetic• 15 years ago

I know Fox has a big habit of using the European (specifically the UK) market as a test ground for products.

Futurama, Simpsons, Family Guy, American Dad, Firefly; I bought them all on release. If they'd have come out 6 months late, rather than (usually) a few months early, then I'd have likely pirated them as I wouldn't have waited that long for DVD quality as the UK was atrocious at that time for decent reruns and no DVRs.

alextp• 15 years ago

Indeed. Friends of mine report downloading and watching dvdrips of movies that still have to arrive to the cinemas here in brazil. Sometimes the distribution channels go crazy for some odd reason, and you find things like sunshine cleaning (from 2008) premiering in brazil in 2011.

zzygan• 15 years ago

This is definitely the case here in Australia.

Apparently Australia has one of the highest TV piracy rates in the world due to the fact that TV networks here would wait a very long time (6 months or even more) between a show airing in the US and when they would show it here. Its slowly getting better here in that networks are doing "fast-tracked" shows that air a couple of days after the initial airing in the US, but this still only tends to happen for shows that are new and anticipated, and doesnt happen for older shows. I honestly cant understand the slowness, but there must be some reason.

FreeKill3• 15 years ago

Yeah, Australia is actually where the friend of mine I mentioned is at. It's good to hear some of the times are improving, maybe the companies are finally catching on that the delays just drive people to download...

I think traditionally, the delays are due to contracts with local providers. So for example, a local Australian television station might negotiate for the rights to say, the tv show House, but they get a cheaper rate by waiting 6 months or more likely, Fox doesn't even give them the option of showing it sooner...

ntownsend• 15 years ago

The case is similar in Canada. I think this recent article by Jesse Brown reflects the reality for a lot of broadband-connected Canadians with similar viewing habits to broadband-connected Americans: http://www.torontolife.com/daily/informer/from-print-edition...

TheAmazingIdiot• 15 years ago

One of the old ideas of globalization was that it makes things cheaper for the US and Europe by doing jobs that we see as "beneath us" economically. Its also a way to skirt laws and minimum requirements of safety by repositioning that 'dangerous' manufacturing in India or Bangladesh.

Now, these companies have been doing this stuff for quite a while now. The people in the US would grumble about children workers and unsafe conditions. Yet those very goods would still be bought. This was the whole idea behind globalization: make more money by exploiting the difference of economy of foreign nations. (Note)

Yet, when the masses finally have access to what the large corporations have had for quite some time, they throw a fit. This battle now is only over music and videos. Just you wait and see the world war of a battle over devices like RepRap.

(Note) After thinking of this, I have a great analogy: Globalisation is a Stirling engine for economics.

tomjen32• 15 years ago

That's the case for almost all countries outside the United States.

Heck, where I live iTunes doesn't have a single movie, tv episode or video on offer. It's easy to loose to piracy when you don't even try...

FreeKill3• 15 years ago

wow, where do you live, if you don't mind me asking :)

yason• 15 years ago

While obviously, that doesn't excuse piracy, it definitely plays havoc with the marketplace.

What's there to excuse in piracy? Piracy isn't theft: theft implies somebody being deprived of a copy¹. Piracy is making a copy against someone's wishes. Often greedy wishes.

This is especially true when downloading content that has been released overseas but not in your country. The production company can't possibly lose any money because they haven't released it yet in your country: you possibly couldn't buy it and shove those shiny euros down their throats if you wanted to.

There might be laws in effect that kind of try to incriminate and impose penalties for pirating but a law doesn't equal ethics.

The copyright proponents want copying a movie to be illegal because it might constitute a lost sale to someone who might try to sell that movie in the future. However, if everything worked the way they propose, nobody could ever do anything legally because it just might constitute a lost sale for someone else who might try to sell the same thing in the future.

¹) It has also been established recently that depriving of a potential sale doesn't have a correlation in reality: in one particular case the potential lost sales were estimated to be more than there's money on the planet...

sfk• 15 years ago

The intellectual contortions used to justify piracy continue to amuse. Unbelievable that this gibberish is at 10 points.

DanielStraight2• 15 years ago

"Piracy isn't theft" is not an argument for or against piracy. No one is arguing that piracy is problematic because and only because it is theft.

Piracy is problematic because it is parasitic. Pirates derive value from a system to which they contribute nothing.

Lost sales are not the point. Lost compensation for distribution is the point. Piracy is not a lost sale, it's a forced sale at the forced price of $0.00.

The point about piracy not being theft deals only with the marginal cost of copies, which is entirely irrelevant to the discussion. Somehow or another, artists expect to be paid for what they do by those who derive value from their art, whether that payment is based on distribution (like the music industry) or prepayment (like Kickstarter).

If it's right for artists to expect, even demand, payment for the value they provide, then piracy is wrong.

If it's alright to extract value from people's work without compensating them as long as they aren't directly impacted, piracy is OK.

That is the debate in a nutshell.

lux• 15 years ago

It's nice to see what's probably seen as a bit obvious by a lot of us who are more intimate with technology being pushed into the general public discourse. Much needed in order to move forward, and good on Canada to publish this!

beloch• 15 years ago

"Groups such as the Business Software Alliance have acknowledged that Canada is a low-piracy country"

This statement is in stark contrast to the story the U.S. government tells. They claim Canada is one of the five worst countries for piracy along with China, Mexico, Russia, and Spain.

http://www.financialpost.com/story.html?id=3047997

Interestingly enough, Canada's status as a pirate country is usually upgraded whenever copyright lobby groups are trying to get draconian updates to Canada's copyright laws shoved through parliament. They were getting close this year, but the election has thankfully nixed that. Again.

sp332• 15 years ago

That's mainly because Canada never ratified some of the relevant WIPO treaties. So even though there's not a lot of illegal infringing in Canada, content makers don't have as much control as they would like, so it gets put at the top of the "Special 301" survey every year. http://arstechnica.com/tech-policy/news/2010/05/canada-again...

pyre• 15 years ago

Those lists are sourced from industry, they are not independently compiled by government employees. If Canada isn't playing ball with the MPAA/RIAA, they can get them on that list. It's essentially meaningless.

danilocampos• 15 years ago

It's interesting — this study establishes what Apple guessed ten years ago: the only way to win against piracy is to compete with it in ease of acquisition.

I don't believe in the media industry enough to think this will have any impact but I'm glad to see the details laid out.

Meanwhile, the world moves on. I watch Starcraft casts by two Canadian guys recording in their bedrooms. I can watch their stuff instantly on my iPad when they upload it, anywhere in the world. I'd happily pay for more. Let's hope this leads the way to the future.

citricsquid• 15 years ago

> the only way to win against piracy is to compete with it in ease of acquisition.

I purchase music and tv on itunes because it's even easier that torrenting. I think they were bang on with that. Although it doesn't consider the people who are against paying for things, but they're always a lost cause.

patio11• 15 years ago

the only way to win against piracy is to compete with it in ease of acquisition.

Apple makes money selling high-margin complements to piracy, not competing with it. iTunes is a low-margin (to Apple) strategic incentive to convince labels not to look so closely at how many billions of dollars Apple makes drizzling the magic margin-increasing white paint on top of commodity hard drives sold, primarily, to pirates.

euroclydon• 15 years ago

I think it's fair to say that Apple's renaissance is built on the back of music piracy.

zackattack3• 15 years ago

"Apple makes money selling high-margin complements to piracy, not competing with it."

I read that iTunes was originally launched as a ploy to move hardware and then it turned into a major profit center for Apple, albeit not one they are eager to advertise.

"iTunes is a low-margin (to Apple) strategic incentive to convince labels not to look so closely at how many billions of dollars Apple makes drizzling the magic margin-increasing white paint on top of commodity hard drives sold, primarily, to pirates."

I don't think that most iPod and iPhone purchasers and consumers are pirates. Did I misread you?

ohyes• 15 years ago

This isn't about easy of acquisition; TFA has little to do with Apple in particular.

This is about the market having 'failed' with regard to proper pricing of certain goods.

Piracy is therefore an indicator of a failure in the market, not a legal problem or something that can be solved by superior content distribution.

(Although it can be solved by superior content pricing, which Apple may have done by allowing the purchase of songs piecemeal, which is actually a big deal considering how many albums only have 1 or 2 songs that are worth buying).

JonLim• 15 years ago

I would say ease of acquisition is part of the market failure - if your market can't easily get your products, then why would they buy it? Of course, that's also partially legal failure as well.

I think "market failure" covers a huge swath of reasons and problems with digital media. Including pricing and acquisition.

zackattack3• 15 years ago

I think we're wildly extrapolating in this report -- it's a Canadian-backed report, sure, but it's about emerging markets "at the low end of the socioeconomic ladder". I think a more interesting discussion might be about how the marginal costs of digital goods pushed towards consumers is going to be pushed closer to the cost of production for certain market segments. I don't know how to guide the discussion but I can offer some questions. Can we resegment the market and make apps for the wealthy? What is the elasticity curve, exactly, and what various strategies can we take to maximize revenue under it in this global economy?

I also don't see how you are jumping to the conclusion that ease of acquisition is the only way to compete with piracy, based on that report, or how it's particularly germane. Not to say that I disagree with it -- it's been my intuition as well, simply because people love convenience...

cicada• 15 years ago

The report is Media Piracy in Emerging Economies, website at http://piracy.ssrc.org/ where the pdf is available under a "Consumer’s Dilemma" license.

sudonim2• 15 years ago

Users take the path of least resistance. Piracy is appealing because it gives users what they want, when they want it, at a low enough cost (both in time and money) that they don't think about the transaction.

The content owners have taken a strategy of trying to make piracy less appealing, rather than trying to make their offering more appealing. Unfortunately for them, that's an uphill battle that funnels money to lawyers and lobbyists that could otherwise be used for innovation. Dinosaurs will die.

rosenjon2• 15 years ago

I agree with this perspective. For example, I was interested in watching the movie E-Dreams the other day. I would have been more than willing to rent it on Amazon On-Demand, or iTunes, if it was available. However, it wasn't. And then I realized that it was on YouTube. So I just watched it there.

I don't mind paying $5 to rent a movie that I want to see. The fact is I don't have enough time in my life to watch all the stuff I want to watch, so when it comes down to it, I simply want the most convenient method of watching something. I'd prefer it not be shot with an unsteady handycam in a movie theater in Brazil with subtitles; I will pay to make sure the version I watch is of decent quality.

The fact is that the media industry is so busy trying to put out what it sees as fires (and these piracy fires are endless, by the way), instead of giving the consumer what they want. If they even had the smallest inkling of a brain, they would have already put their entire catalog online for direct purchase. No retarded DRM, or anything like that. Simply let people download the songs, at high quality, and then go after the most egregious forms of piracy. This would lead to higher margins (sales costs effectively go to 0), and they would be able to chill out a bit as well. Instead, they seem to think that living in their bunker somewhere is the way out of the situation, and are passing on probably the greatest revenue opportunity of all time.

sudonim2• 15 years ago

Cool! I checked it out after your mention and found this playlist on youtube. http://www.youtube.com/user/DizzMoll#grid/user/D0E4471D25CD4...

rosenjon2• 15 years ago

It's worth watching. A good lesson that growth for its own sake is not necessarily a good thing. Getting really big really fast is pointless unless you have a revenue model that works.

Canadian-backed report says piracy is a market failure, not a legal one

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