A deeper look at piracy

The Singapore government has implicitly taken the position that piracy undermines the creative industries. According to a news report from Channel News Asia, Law Minister K Shanmugam is working towards creating a legal framework that would clamp down on online piracy and protect intellectual property rights. This position seems morally right and just. But it’s overly simplistic.

Shanmugam indirectly argues that piracy stifles the creative industry, by linking a strong legal framework to helping creative industries. This is not true. On the contrary, piracy helps the creative industries by publicising innovation and pressuring the big companies to respond to the marketplace. As described in The Pirate’s Dilemma, a large number of music genres – acid house, dubstep, hard-core – took off after being broadcast by pirate radio stations in the United Kingdom. These music brands began life as too unconventional for mainstream taste, but the pirate radio stations gave artistes a platform to reach out to large audiences, given the artistes the critical mass necessary to achieve mainstream popularity.

The same can be said for Japanese manga, through the scanlation community. Whenever a new manga volume is released in Japan, people scan the entire issue and post the raw images online. These raws are downloaded by translators, who translate the works into different languages, and publish the translated issues online. Both the scanners and the translators are, for the most part, ordinary people who happen to possess the right equipment and know-how to hold up their end of the scanlation process. This allows Japanese manga to reach audiences far outside Japan – especially for manga that are released only in Japan. With some creativity, these audiences can be turned into paying customers.

It is true that online piracy leads to the loss of revenue. The music and motion picture industries (among others) routinely report losses in the hundreds of millions, if not billions, of dollars. In Singaporean movie theatres, advertisements extolling audiences to respect IP rights and cease pirating are regular screened before the feature film. These advertisements claim that failure to respect IP rights will lead to filmmakers choosing to cease making films, and movie theatres to close down. But this advertisement does not ring true in a world where the global movie industries continue to rake billion-dollar revenue in ticket sales alone. While it is true that there will be some people who will consume pirated content without giving IP owners any compensation, piracy can help boost sales, as in the case of Japanese anime, music, and books. The big picture is, quite clearly, more complicated than what the big corporations are saying.

Governments and corporations need to stop blaming pirates and start understanding why people pirate IP. Speaking as an IP owner, I can think of three reasons why people do it.

1. Cost

Let’s face it: when forced to choose between paying $50-plus for the latest blockbuster video game, or waiting patiently for a few hours/days/weeks to download that same game off a torrent website, there will be people who will gladly choose the latter option. Especially if, for a few more hours of waiting, they can have any additional downloadable content or extra features that have already been released. Even more so if these people live in places with low income, and high prices for IP. The same holds true for other kinds of IP: books, music, movies, television dramas.

2. Availability

There is a large amount of IP that is simply not readily available in some parts of the world. Anime and manga, music, and more. Pirates create and meet demand for this IP by publishing and distributing this IP on places where users can readily access this IP. Sometimes this is done using legal means like YouTube. Sometimes this is done using more questionable means, like pirate radio stations. The platform pirates use are engineered to reach a large number of people at low cost, giving them a distribution network that could potentially rival the ones used by existing companies.

3. Convenience

Digital Rights Management tools are complicated. Many games, such as Operation Flashpoint: Dragon Rising, Splinter Cell: Conviction, Assassin’s Creed 2 and beyond, have DRM measures that prevent people from (easily) pirating software. The same goes for music, ebooks, and other digital IP. But these measures punish legitimate consumers. Coding a program to prevent multiple installations of the same game from the same DVD (such as SecuROM) may sound like a good idea, but this prevents legitimate consumers from re-installing their games. This can happen when the computer is reformatted, when the user gets a new computer, or when the user simply wants to play the game again after having deleted it. These are perfectly legitimate uses, but DRM software like the one I’ve described punish users for doing any of these by preventing consumption of software. Other tools, like the one used by Arkham City, are fairly complex to navigate and spoil consumer enjoyment. Pirates make consumption of IP convenient by scrapping DRM tools  from the original content and posting the now-DRM-free content.

Legislation is not the answer to these questions. These are legitimate consumer needs not being met by the companies that insist on DRM regulation and strict anti-piracy policies. Strict legislation may make piracy more inconvenient, but it will not address these concerns. If anything, they will exacerbate them, because consumers will have fewer places to address these needs, and they will take out their frustrations on the corporations by refusing to buy their IP and spreading the word to boycott their products. This creates additional market pressure on the pirates, who will at some point team up with hackers and crackers to circumvent any new anti-piracy means to publish pirated content.

What is needed is a new business model. Pirates shouldn’t be seen as evil money-sucking parasites. Pirates should instead be considered as friendly competitors. IP owners should strive instead to compete with pirates on their terms – on the terms of cost, availability and convenience, and any other reason why consumers will choose pirates over legitimate purchases. In this sense, piracy can be thought of as simply an additional cost of business.

If possible, IP owners should also factor piracy into their business models and understand how to use their distribution models to the IP owners’ advantage. Underground music artistes in the UK went mainstream after the mainstream record companies started collaborating with the pirate stations. The pirates gained prestige, the artistes made more money, and so did the record companies. It could be possible to do something similar for other IP. Author JA Konrath reported an explosion of sales after he started giving away one of his ebooks. Shortly after the creation of the Baen Free Library, in which Baen’s published books are posted online in their entirety for free reading, Baen reported increased sales of those published books. In those two cases, online pirates could easily reproduce the text of those books and distribute them for all to see. The result was increased publicity, increased consumer awareness, and therefore increased sales.

Piracy is a problem that has been around since the articulation of intellectual property rights. Legislation has done little to curb it. What is needed is a different approach. Instead of trying to stamp out piracy, companies should instead seek to meet the consumers real needs and wants, and compete with pirates on their turf. Companies should also seek to co-operate with the pirates to create win-win situations, or at least situations that are advantageous to the IP owner. IP is produced for consumption – it’s time to understand understand what the consumer wants and meet it, instead of blindly focusing on profit.

2 thoughts on “A deeper look at piracy

  1. What is frustrating is when corporations block you from being able to legitimately access their product which basically forces you to either pirate it or not watch their stuff if it isnt already on free to air or cable. I recently moved to Japan and don’t have a TV (or Cable), but I love watching US tv shows, they are on parallel broadcast in Australia. So, I thought, ok, maybe I can still get them from the internet via Amazon.com (/.co.jp), or Hulu or direct via CBS/HBo, etc. No. Hulu Japan offers a range of shows that have already aired, so I can watch past seasons, but not new episodes. Amazon.com has episodes for a small fee but you need an American credit card and IP address.. Ok, so I can do the IP with a proxy but I dont have a US credit card.
    So, my options, to wait for the DVD of the season to come out and buy it, ship it to Japan (if i cant get the english version here) which could be months. In the meantime, what do I watch on TV.

    Combined with the attacks on the file hosting websites in the US, piracy isnt even an option because people are going further underground or using multiple services to keep from getting caught.

    The bottom line, I have the money, I have the morality to want to buy the episodes of TV shows I like and yet I am denied. Its stupid.

    • I know the feeling. Over here in Singapore, there’s very limited access to the kind of stuff I want to watch or buy. There’s no Kindle store here, for example, and no way to watch certain television programs apart from expensive satellite television subscription programs or buying DVDs. Or piracy. Small wonder that many people here take the third option.

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