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Source link: http://archive.mises.org/16042/media-piracy-better-described-as-a-global-pricing-problem/

Media Piracy: “better described as a global pricing problem”

March 15, 2011 by

Suprise! You can’t stop the flow of media piracy with every-more-draconian measures. This stunning conclusion was recently published last week by the Social Science Research Council, as a report called “Media Piracy in Emerging Economies”. The study focused on emerging economies, where media piracy is rampant, like Brazil, India, Russia, South Africa, Mexico and Bolivia. The report argues that efforts to enforce copyright law have largely failed, and that the problem of piracy is better conceived as a failure of affordable access to media in legal markets. Of course, without the state-granted monopoly on copyright, the media commodities being traded on the black market would quickly find the price the market is willing to pay.

What did 35 researchers discover after 3 years of studying the problem? Their answers could have been lifted from an Austrian Scholars Conference (maybe they pirated them…)

The major findings in the report:

  • Prices are too high. High prices for media goods, low incomes, and cheap digital technologies are the main ingredients of global media piracy. Relative to local incomes in Brazil, Russia, or South Africa, the retail price of a CD, DVD, or copy of MS Office is five to ten times higher than in the US or Europe. Legal media markets are correspondingly tiny and underdeveloped.
  • Competition is good. The chief predictor of low prices in legal media markets is the presence of strong domestic companies that compete for local audiences and consumers. In the developing world, where global film, music, and software companies dominate the market, such conditions are largely absent.
  • Antipiracy education has failed. The authors find no significant stigma attached to piracy in any of the countries examined. Rather, piracy is part of the daily media practices of large and growing portions of the population.
  • Changing the law is easy. Changing the practice is hard. Industry lobbies have been very successful at changing laws to criminalize these practices, but largely unsuccessful at getting governments to apply them. There is, the authors argue, no realistic way to reconcile mass enforcement and due process, especially in countries with severely overburdened legal systems.
  • Criminals can’t compete with free. The study finds no systematic links between media piracy and organized crime or terrorism in any of the countries examined. Today, commercial pirates and transnational smugglers face the same dilemma as the legal industry: how to compete with free.
  • Enforcement hasn’t worked. After a decade of ramped up enforcement, the authors can find no impact on the overall supply of pirated goods.

Ironically, the report itself is distributed under a Consumer’s Dilemma license, which “shifts the developing-world consumer’s dilemma onto other geographies and income brackets.” So if you live in a rich country, you pay more, and if you are unfortunate enough to be in the business of enforcing copyrights on media, your price is a cool $2,000. The warning at the bottom of the page reads:

Non-compliance with this license (or with appropriate fair use/fair dealing exceptions and limitations) is an act of piracy, subject to prosecution under applicable national law. For US residents, this includes criminal prosecution under the No Electronic Theft (NET) Act, punishable by up to three years in prison (for a first offense) and $250,000 in fines per act of infringement.

For those who must have it for free anyway, you probably know where to look.


Today CNET published this timely gem, White House wants new copyright law crackdown. It seems the Feds are concerned about falling behind, and they want to get in on this new-fangled “streaming” thingy:

The White House today proposed sweeping revisions to U.S. copyright law, including making “illegal streaming” of audio or video a federal felony and allowing FBI agents to wiretap suspected infringers.In a 20-page white paper (PDF), the Obama administration called on the U.S. Congress to fix “deficiencies that could hinder enforcement” of intellectual property laws.


Bogart March 15, 2011 at 8:03 pm

And the worst part of this unreal and unscarce property is that the entire cost of protecting the property is falling on third parties instead of the owners. If the owners don’t want their property stolen then protect it.

Stranger March 15, 2011 at 9:42 pm

The pirates are protected by governments, hence the only way for the owners to defend their property is through government.

The problem of piracy is in fact a problem of the economics of producing security. At what point does it make sense to produce more security instead of less? Since, as you point out, security is a collective good, the media owners want unlimited increases in the security of their property. Because it is a collective good, it is impossible to apply any economic calculation to the problem.

Ryan Vann March 16, 2011 at 8:30 pm

Your post made abundantly more sense than your link.

Gil March 15, 2011 at 9:43 pm


Havvy March 15, 2011 at 8:17 pm

I now sort of want to write code for countries like these so I can get my product used by more people…even for a smaller wage.

Braden Talbot March 15, 2011 at 8:24 pm
Israel Curtis March 15, 2011 at 8:39 pm

I just found that after I posted this! Going to add an update ;-)

Ohhh Henry March 16, 2011 at 12:01 am

Notice that the authors use the term “piracy” rather than more neutral terms such as “unauthorized copying” or “copyright infringment”. Go ahead, compare your subjects to bloodthirsty brigands right off that bat, in your title, before introducing a single fact or hypothesis.

I have just one question for the authors – have you stopped beating your wives?

The real murderers and thieves are of course the people who advocate, write and enforce copyright law.

Consider the case of a guy who downloaded music worth maybe $10 and burned a CD. This person is a “pirate” according to the SSRC. Yet nobody lost their house or their savings, or their job, no company went bankrupt, nobody was put behind bars or killed. If the downloader is caught however he will be subjected to ruinous litigation and fines, loss of his job and property, and imprisonment in a cage where he will be subject to beatings and rape. And if he defends himself from these assaults then he will be gassed, knocked down with concussion grenades, tortured with electric shocks and if he’s still standing after that he will be pumped full of bullets.

But the “social scientists” assure me (in the title of their report) that the person who downloaded music is a “pirate”. If a downloader is a “pirate” then how would they describe those who confiscate his property, assault, enslave and kill him?

Government is the inversion of common sense and morality.

J. Murray March 16, 2011 at 5:53 am

But those pirates threw an Internet over me and stole my downloads!

Hordst Muhlmann March 16, 2011 at 9:18 am

Of course, actual pirates off the coast of Somalia, the state can’t be expected to do anything about that. But God help you if you download a Justin Beiber song.

The Fringe Economist March 16, 2011 at 12:54 pm

Can you contract Beiber Fever while at sea?

Inquisitor March 16, 2011 at 1:38 pm

It’s “quantitative easing”, not flooding the market with cheap credit. But it’s “DEM EBUL PIRATES”, not “copyright infringers”. Funny how the state changes terms to suit its purposes by either neutering or injecting them with vitriol.

El Tonno March 16, 2011 at 6:39 am

Wiretap suspected infringers? The Department of Homland Security shall deal with it? At least they just want to add a few years to the sentences and not gas people outright.

That whitepaper is not below anything that Reinhard Heydrich could have come up with.

And this gem:

“Create a right of public performance for copyright owners for sound recordings transmitted by
over-the-air broadcast stations which, in part, will allow copyright owners to obtain overseas
royalties that are now denied to them.”


nate-m March 16, 2011 at 8:12 am

Basically what it allows is that if your streaming media from your house that gives the government the ability to wiretap your communications in order to determine if that stream violates copyrights in some what.

Fun stuff.

Horst Muhlmann March 16, 2011 at 9:07 am

Not surprising that the only kind of property Obama is interested in defending is Imaginary Property – actual property be damned.

Michael A. Clem March 16, 2011 at 10:01 am

re Obama: not the kind of change I was hoping for…

Shay March 16, 2011 at 11:46 am

Antipiracy education has failed.

Correction: antipiracy indoctrination has failed.

Vanmind April 9, 2011 at 4:44 pm
SOMATIDS - CONYMAN November 16, 2011 at 4:40 pm

LOUISIANA MANN…I heard that that’s quite a Summer.
And apparently she had no qualms about RICKY LOCKLEAR’S PHOTOS.
Not only that, she had an ANGIE LIST and APPZ2…oh yeah..this doll was ” reconnected”…and she took her storm NEWFOUNDLAND..and that’s how she ended up on HORDST…with DASSAUT- REDPATH- JEN.

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