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Is Piracy In the Consumers' Best Interests?
moviemodel writes "Warner Home Video in China are beginning trials of 'simple pack' DVD releases at $1.50. They state they are doing this as a test to see if they can recover a market lost to pirate DVD's at 75c each. They also sell higher priced and more complete DVD sets as 'silver' and 'gold' packs. Maybe this marks the beginning of movie industry realism and long hoped for shift in business models, forced by piracy. Perhaps they can take it on as a better model for movie downloads worldwide, facing the same problem of competition from pirated movies. Is such a model viable in the long term?"
They have less of my money at $1.50, which is good. When they get what they're currently charging there's a risk they'll make more crap films starring clueless overpaid actors, and that's not a risk I'm prepared to take. I only watch a film once, so why pay more for a DVD than it costs to watch in the theater?
At least they can make some money now selling cheap DVDs instead of nothing selling overpriced ones.
1.50? You don't even have to go that low. Make them 5 bucks and you already have a deal. 5 bucks, no DRM and, hell, why should anyone DL movies anymore? Wait for a day to DL stuff, only to find out that instead of Ice Age 2 you get a cheap copy of Sally does Houston. AND you find out when li'l Jimmy starts the film.
... well, there is DRM, but so far nobody noticed it yet 'cause the IPods didn't break down yet.
Why is the IPod so popular? Affordable tracks and
But for some reason I expect this to be some PR stunt, showing that in China you can't even get the market back when you go down to 1.50 bucks. One reason COULD be that the average Chinese doesn't have those 1.5 bucks to spend on DVDs. Why do you try it in China, why not in the US? Or Europe? Or some other country where people actually (still) have the money to actually buy content?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
http://davidlita.googlepages.com/copyrights
Geeks installing Windows 3.1 and 3.11 on their work computers on top of DOS, is the flagship operating system/GUI made its initial foothold. Wordperfect was originally the dominant tool for word processing and when people started pirating MS Word in the same offices, it gave MS an addition line into each office. Finally...look at the MP3 device industry. There wouldn't be a demand for Ipods and other MP3 players if it weren't for piracy. Piracy helps more than it hurts. But copyright holders issue these exaggerated claims about how much piracy hurts them and how much money it costs them. The truth is those claims are exaggerated because many of the installations of pirated software or music are things that most would never buy anyway. So piracy does have its plusses. It's just that intellectual property rights holders know that if they do not actively protect their intellectual assets, US law will not be on their side.
Is it 5:30 yet?
There is NO way they will lower the prices in the rest of the world. If they did then all video rental stores would go out of business - or start moving a lot more merchandise. Likewise, direct-to-DVD releases cannot be priced very low; DVD sales are their only form of revenue.
As much as I would like to see movies for $1.50. It will never happen.
Proof by very large bribes. QED.
"DVD's should basically be 1.50 every where else in the world too then." ... said without even thinking.
Thinking about how 1.50 dollars could be a days wage in some parts of the world, and just 3 minutes in other parts.
Do you think that such a trinket of entertainment should cost a full days work for one, and just 3 minutes of work for the other ? Or do you think that both should spend roughly the same ammount ?
And no, i'm no advocate of region-locking that DVD's are currently subject to. But paying everywhere the same ? Yeah, right.
This article http://www.business-in-asia.com/china_wages.html states: "To give an example of the spread in salaries in a foreign firm in China, a professional employee could earn an annual salary of approximately 100,000 RMB (approx. US$12,000) while a factory worker or an ordinary employee could expect about 36,000 RMB (approx US$4,340).
So, one "cheap" DVD costs 12RMB, or 1/362nd of their yearly salary. In our terms, say with a salary of $30,000, that would be $82.95.
I come here for the love
Then everyone else in the world should be making $40,000 a year, too.
This guy's the limit!
Content is interesting, as a commodity. It has HUGE fixed costs and almost ZERO variable costs. I.e., studios have to pay a LOT to create some song, but the cost per CD to make is very close to zero.
Now, to make a CD costs, say, 10 cents. That's the difference between pressing this single CD and not pressing it. Material cost, if you want. Because the artist played, whether the CD exists or not, the hype runs, the pressing machine is standing there with the master ready to press, the workers are there, all of that independent of whether or not this one CD is being pressed or not.
Now, selling this CD at anything more than 10 cents is better than NOT selling it at all. And in China, the market is saturated with bootlegs. So you usually DON'T sell at all.
Now, you can't sell all your CDs at 20 cents. Yes, sure, you'd cover the cost of the CD. But you would never be able to cover the fixed costs.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
If they sell discs where the main feature (i.e. the movie itself) is crippled, for example by lower bitrate than on premium edition, by having no English language track, or by having forced subtitles to go with, this won't beat pirates.
If they sell discs with high-bitrate main feature (DVD-9 filled to the brink please), original-language soundtrack available and no UOP gimmicks, they win. Hell, if they do it consistently, they could sell such discs for a whopping $4.30 in Russia and I would gladly buy them over pirated ones. Besides I throw the box away, anyway, and pack the discs into a wallet to save space right away. Just give me the properly mastered stuff, no frills.
To bad I suspect the cheap licensed edition would be crippled. Then pirates, who care about customers more, get my business.
17779 eligible voters in a district, 17779 'vote' as one. This is Russia.
when you abuse your monopoly position by price gauging, piracy becomes your competition.
Shame humanity has to enact change through illegal acts. Next up we change the US government via sniper rifle.
/= Immoral.. Yet, if something is illegal long enough, people seem to think it is immoral.
Aren't pretty much all changes enacted through 'illegal' acts? civil disobedience, revolutions, founding of the United States of America..
Illegal
--- We need more Ron Paul!
People who steal are very good at talking people into thinking that what they did is OK
Ya mean like constantly expanding the range of copyright laws so that nothing ever actually goes into the the public domain, so the free money cow never dries up?
KFG
And face it, the software and entertainment industry have been gouging the public for so long, they think that the situation is normal.
Does anyone else remember $85 movies on VHS? In 1985!
All piracy is doing is forcing the software and entertainment industry to price their products into the affordable range.
$200+ dollars for an operating system? Why? There is something seriously wrong when a peice of easily replicated digital information (ie. ludicrously cheap) costs as much or more than full system hardware.
I've been seeing these $1 DVDs at 7-11 here in Utah. I've actually bought a couple (for my parents, as most of the stuff is old classics that they would probably like to see again.)
Everything above $1 better have a very serious justification for why it is so expensive.
Other than "to make the studios/developers really rich."
No! It's a *SIG*. Keep the Special Interest Groups away! (Con joke!)
I've seen several people refer to pirating as "stealing". Keep in mind, it's only stealing when you would have gone out to purchase it in the first place! At least that's how most justify it.
If I clone something (like a nice stereo, for instance - impossible, but for the sake of our conversation), it's not really stealing it. If I make it available to other people (i.e. like sharing my stuff on P2P), that's almost worse than stealing... but if I clone something that I wouldn't have purchased to begin with, that's incredibly easy to justify, because there's no money lost. Again, I wouldn't have gone out to purchase a $25 DVD, whether it could be had for free or not, just like I wouldn't have gone out and purchased a $1200 stereo when my $150 Aiwa that I already bought works great. There's no physical product missing somewhere... I cloned it. Now if I could only clone a Viper...
The ultimate question in my mind is, what is the actual cost of manufacturing and distributing? It's like a $0.03 piece of plastic, the disc that is. Generic packaging like they talk of here can't cost very much. If it gets 15x the people to start buying movies again IN ADDITION to the people who currently pirate them, well... for $3 or $4 per release like some have suggested, I bet they stand to make their money back.
Certainly the music industry won't be far behind in this little "experiment".
then probably yes. In reality, piracy is the cartels' best freind. It acquires and maintains mindshare of the product being pushed at the moment. And I do mean 'pushed'. Piracy is free advertisement. And also, the gov't gets to look like law enforcement heroes when they bust the pirates. So it's win-win-win for the gov't, the cartels, and the sheep.
What?
With Digital Products it is very cheap to re-produce tons
Fixed. There is a large distinction. The cost of a digital product is the initial costs, which could be quite large + the reproduction costs. While pressing a DVD may cost $0.50, the material you are pressing on that DVD might have cost $100+ million to produce. So, even if you do sell 100 million copies at $1, you still have yet to break even.
DVDs are a discretionary purchase. Consumers in every country have an individual price point where they will buy a DVD because the price is reasonable for the limited entertainment value it provides. I believe, in the US, that the optimum price point is about $5. Look at how many DVDs Wal-Mart sells at that price point.
The question, of course, is where is the optimum price point for DVDs to sell in China, given its consumers' standard of living. I believe WHV is on the right track here.
A quick personal note: I bought 6 old John Wayne films earlier this week for $5 each. How many would I have purchased if they were $10 each? None...
As an example, consider the cost of cigarettes in Canada in the late 1980s. Tax rates were so amazingly high that ordinary people were willing to buy cigarettes smuggled in from the U.S. -- exact duplicates of the "legal" product, sold at a fraction of the price. The black market became ubiquitous and socially accepted. It undercut the legitimate market so badly that the government had to lower taxes so there would be a legal product left to tax.
Now consider a product like a movie, where the cost of reproduction is absurdly low -- zero, in fact, if you just download the movie from the Internet. DVDs in the U.S. are priced to compete with that, and I do in fact buy DVDs of films I could easily download. In China, movies are burned to DVD then sold for $0.5. Studios, trying to compete with that, hope that a price point of three times the black market rate will attract buyers to their legitimate product, thereby making the production of ripoffs unprofitable.
This is not my sandwich.
...that every bit of packaging beyond a printed cardboard sleeve and a waterproof plastic wrapper exists solely to convince you on a subliminal level that you're buying something more substantial than data.
Same goes double and triple for software. One DVD's worth of data, in a fat 6 by 4 by 2 inch box with a half-inch thick printed manual (how quaint!) and some packing peanuts. As unsubtle as a puffer-fish!
You make a joke at what I say, but you're quite wrong with what you're implying ...
The graph you describe tells you the equalibrium point between a given supply and demand graph; thus giving you the price of the product. The graphy that you'd want to draw is {(Unit Price)-(Unit Cost)}X(quantity demanded) [knowing that quantity demanded is a function of unit price] if you assume that supply is flexable (which it mostly is with all electronic distribution) then you simply look for the maximum of the curve.
The interesting thing is with a product like an MP3 the unit cost (to distribute) is minimal; thus the unit cost is the (total cost to develpo the product)/(quantity demanded) meaning the Unit Cost is {(small constant) + (Function of price) ).
If I haven't written it down incorrectly, what you should find is that you maximize your profits in this type of envoronment when you minimize the price of your product.
...gives you a unique perspective and brings home reality over their BS they spew. I'm in a similar half a century + change personally screwed by those bozos. A couple of my pet peeves are them continuuing to muck about with gun rights after they promised the 68 act would be "it", no more after that, and later on with the huge illegals amnesty during the reagan years (I think, don't remember, 84??), then they said they would "crack down" and "enforce the laws on the books".
Oh ya, my all time *favorite* "random courtesy roadblocks". WTF is up with that?? Remember back in school we were taught only supremely evil and totalitarian bad places like east germany and whatnot had those sorts of roadblocks (Your papers please!) and how wrong and illegal it would be here?
Man, there's a bunch. You are right, people of a younger age don't have any frame of reference on some of these subjects outside of an academic one.
Now here's one I keep trying to maintain a frame of reference on, the great depression. It's hard, but I try, I keep it in the back of my mind when I look at economic news andd geopolitical events. I wasn't around then, but my parents and aunts and uncles, etc, were, and I distinctly remember the stories they told me about it and how amazingly fast things can change and how utterly bogus the stock market/government currency manipulators are when it comes to hosing the population with their congames. Keep promising them just this huge something for nothing deal until they are all sucked in, then WHAMO, drop the hammer and walk off with all the REAL wealth leaving the peons holding the bag with worthless paper. Seems they pull this stunt on a big scale every other generation or something, because it takes that long for people to "forget" those "leaders" main skill set is *lying*. They are professional grifters.
I think there is a perfectly legal and legitimate marketplace that is thriving in the digital age: the second-hand market. Secondhand media prices tend to reflect the true market value of the product, rather than the over-optimistic price demanded by retailers.
The problem is, this has morphed into a black market...not because laws have failed...but because the market has performed as predictably as ever. Thanks to the ease of replication of digital media, the supply of entertainment has been raised to nearly infinity, and so the laws of supply and demand have accordingly lowered the street value of entertainment to zero.
Imagine what will happen when the majority of material goods achieve this same ease of distribution and duplication. Don't laugh...you can use a 3-D printer to manufacture real objects now. What happens when you can buy one of THOSE at Costco?
DRM is the unwanted band aid of desperate fat cats stalling for time. Our culture is facing a much more far-reaching problem: the market economy just hit the ground harder than Humpty Dumpty.
The next refinement is to look at the area between those lines. It's lost revenue. If supply and demand converge at 50 quatloos for an isolinear chip, then all the people who would have been willing to pay 100 quatloos get a free ride.
Look around and you'll see zillions of clever ways to charge both 50 quatloos and 100 quatloos for the same isolinear chip. One is the "early adopter tax", in which the 100-quatloo folks get the first samples of the chip. Another example is air fares, where expense-account people get on-demand anytime travel but 50-quatloo people have to stay over Saruday.
Price discrimination feels unfair but economists say it's efficient and beneficial. More planes fly, more isolinear chips get built.
Piracy happens when there's no price discrimination. There are people willing to pay $15 for a CD, or at least there used to be. If you insist on selling all your CDs for $15 you miss out on the $7.50 narket and on the people who'd be happy to pay $3 to avoid the hassles of P2P. If you're not blinded by greed and scrambled by drugs you segment the market and put products at all of those price points.
Warner is rewarding a country for having a legion of pirates. As a consequence, Warner is punishing us for being legitimate buyers. That really annoys me.
Okay, all right, so "stealing" isn't the right term. Just because the common terminology doesn't accurately describe the practice, that does nothing to wash the practice clean of any wrongdoing. Similarily, just because (you may feel) infringement is often committed against "bad" people, this still does not say anything to the legitimacy or "correctness" of the actual act of infringment. You're arguing about peripheral subjects and haven't said a thing about the actual matter at hand.
To those with the means and ability to create content, a right is granted: to control the distribution of that content by utilizing legal systems. It is an artificial right, but it is given to counteract the fact that it is unfairly easy, given the simple physical requirements of copying, for a copier to profit from someone else's much more laborous act of actually creating content. The creator, without copy control rights, would be a fool to create anything at all, as the inventive work would be worthless after the first knock-off artist came along and did the simple task of pumping out bootlegs.
Do you have the means and motivation to create a couple hours of movie entertainment? If not, than pony up to the people who do, or go without. It's called "specialization" and "trade", and it's been a part of civilized society for quite a while.
Considering that "content" is not a right or a basic sustainance need, and that publishing is not an esoteric or vastly expensive art only available to a select few, then it's a perfect playing field to "let the market decide". So Sony, EMI, BMG, Warner, etc. are all raging bastards? Don't buy... and don't give me lip service about "boycotting" and taking the high road if you'd just go and grab it bootleg. It's not a need, and there are alternatives out there, so a "boycott" without the rather mild sacrifice involved in not actually seeing or hearing the latest blockbuster hit is just hypocritical.
I'd be right with anyone saying that the DMCA is a travesty and that things like legal enforcement for region-encoding and against modchipping is downright wrong, but to "fight" them with piracy has no real weight at all.
Information wants to be free.
Entertainment wants to be paid.
You just want to be cheap.