The Social Science Research Council recently released a report entitled “Media Piracy in Emerging Economies”. This three year study focused on music, movie, and software privacy in countries like Russia, South Africa, and Brazil. You can get the report here, depending on which part of the Consumer’s Dilemma you qualify for in terms of price. The major findings of the report are as follows (I’ve summed up their bullet points):
- Prices are too high. [Prices are 5-10 times higher relative to income.]
- Competition is good. [No competition means no lower prices.]
- Antipiracy education has failed. [Self-explanatory.]
- Changing the law is easy. Changing the practice is hard. [Same.]
- Criminals can’t compete with free. [Same issue as legit companies.]
- Enforcement hasn’t worked.
I wouldn’t immediately move to lump eBooks into this pile, but as it is a digital file, it can’t be far off from these findings. Especially the point about “criminals can’t compete with free”, which feels like a remote overture towards libraries; why would people buy the book if they can just borrow it for free?
For starters, Mike Masnick is absolutely right that the report debunks the entire foundation of US foreign IP policy. That policy has essentially been written by the owners of US intellectual property, who jealously protect it and think that the best thing they can possibly do is be as aggressive as possible towards any sign of international IP piracy. As the report shows, this makes a tiny amount of profit-maximizing sense for the companies concerned. But it actually encourages, rather than reduces, piracy in the aggregate. (Emphasis in original)
And (as quoted by Andrew Sullivan in part, attributed at the bottom of this post):
The big forces driving media piracy in developing countries are real and powerful and will not be changed, no matter how many western politicians get on their moral high horses and insist that countries like India and China build a “culture of intellectual property.” But the irony is that if governments and corporations really wanted to build such a culture, then they would encourage companies to set their prices low enough that the populations of those countries could actually afford to buy music, movies, and software at the full legal retail price. It turns out that domestic companies are quite good at distributing media at low prices, and can build profitable businesses by doing that. But foreign companies have different incentives in the short term, and don’t do that.
It’s worth reading his whole take on the report. The quotes he pulls out are stunning. For as much puffery that is placed on the ills of piracy and how much it costs those three industries, the documentation to this claim is either suspect or non-existent. Considering the robustness of these industries, it’s hard to see where the financial suffering begins.
Reihan Salam at the National Review Online has his take:
High prices for media goods create what the report’s authors call “the consumer’s dilemma”: you can pay the high legal price, you can find a pirated copy, or you can skip consuming the good in question. Technology has been diffusing faster than incomes have been converging. That is, there are now millions of people living around the world who have the devices and the broadband they need to consume media goods produced in the rich world, but without the incomes they’d need to pay the prices to which people in the rich world have grown accustomed.
In viewing these reports and reactions through the librarian kaleidoscope, the steps taken to prevent piracy in the third world make for a difficult product and limiting conditions in the first world. As the people who can afford eBooks under their current pricing structures, we (both libraries and consumers in the first world) are seen as the best way to recover expenses and generate revenues. We pay the DRM and monetary price for the actions of others well beyond the long reach of intellectual property law.
Now I’m off to wonder where libraries fall into this picture. As an entity that lends content at no additional cost to the community member, I can see why libraries are held as suspect in the publisher eBook lending idea. You can’t compete with free; but you also can’t compete if the obstacles to content make the pirate alternative a viable (albeit illegal) option. It’s something to consider as we move forward with eBook collections.