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Piracy In Developing Countries Driven By High Prices

langelgjm writes "The Social Science Research Council, an independent, non-profit organization, today released a major report on music, film and software piracy in developing economies. It's a product of three years of work, and the authors conclude that piracy is primarily driven by excessively high prices and that anti-piracy education and enforcement efforts have failed. Still, chief editor Joe Karaganis believes that businesses can survive in these high piracy environments. The report is free to readers in low-income countries, but behind a paywall for certain high-income countries, although the SSRC notes, 'For those who must have it for free anyway, you probably know where to look.'"

24 of 235 comments (clear)

  1. Well no shit by Anonymous Coward · · Score: 5, Informative

    The average person in Cambodia earns one dollar a day. Some kids collect scrape metal and if they collect $0.25 worth of them, they can go to school the next day (they are not only happy about it, but work to get to school!). Do you really think they're going to spend it on entertainment than costs more than they make in a month?

    I was visiting there last year and unsurprisingly they did have stores with pirated goods. The largest mall in Phnom Penh has full floor of tv shows, movies, games, applications, everything you can think of. Games and movies cost $1-2 while all seasons of The Simpsons cost $10, all neatly packed and everything. The other series with less dvd's cost even less of course, and this was inside a big mall and they probably added some extra to the price since I was foreigner (they didn't list prices but you had to ask). Maybe you can get them even cheaper from street vendors.

    And while speaking of Cambodia, it's quite nice place to visit, not your usual holiday place. Even in the cities some of the streets are just sand and when you go out all the tuk tuk drivers come asking you where you want to go. If you want to go for a few beers and a pizza, the driver takes you there and waits for you while you do your stuff and drink beer, even if it takes long time. Then you just give them like $5 for being your driver the whole night, and they're happy since they're still getting a lot more than people usually. That's why there isn't any shortage of tuk tuk drivers either. And yeah, girl bars (or ladyboy bars if you prefer that) are open 24/7 and there's happy pizzas with special ingredient ;-)

    1. Re:Well no shit by WrongSizeGlass · · Score: 3, Insightful

      So it isn't necessarily 'high prices' but prices that prices aren't adjusted to the developing country's standard of living?

    2. Re:Well no shit by hjf · · Score: 4, Informative

      DVD region codes were meant to keep you from watching a movie that was unreleased in your territory (OH NOES!), not to charge poor people less.

      Back in the 90s, I bought my CDs online from Amazon,CD Universe, CDNOW because it was (much) cheaper for me to pay the $6 shipping than walk to the store 5 blocks away and buy it there.

    3. Re:Well no shit by Idbar · · Score: 2

      In addition to it, these developing countries try to protect their local market and charge additional taxes for imports at their customs.

      This list shows United States nearly at the high end of the minimum wages list, consequently its citizens have higher acquisition capacity than any other in developing countries, yet prices come not only the same but sometimes higher to those countries. A simple wii game for example (although not first need) comes at US$100 (or higher) in certain countries where minimum wages are almost a third of the US minimum wages due to customs, taxes, etc. Yes, normally people will find better to pay higher for their Internet speed and just try to download as much as they can, or go around to your favorite corner vendor to get the burned copy on CD/DVD for 1/5th of the original price.

    4. Re:Well no shit by tlhIngan · · Score: 2

      DVD region codes were meant to keep you from watching a movie that was unreleased in your territory (OH NOES!), not to charge poor people less.

      Heck, it was one of the nails in the HD-DVD coffin during the HD-DVD/Blu-Ray battle. Theatres in other countries were suddenly finding less customers because it was cheaper and better to just import the HD-DVD that go to the theatre, OR the movie wasn't out in theatres yet!

      So yes, there was that effect. Sony came out ablazing with "We haz region codes!" and thus ended one of the least DRM'd media around. (They also had "We haz multilayer DRM!" and the like, too. HD-DVD only had AACS to "protect", which was strictly optional so you could have DRM-free/encryption-free HD-DVDs as well).

    5. Re:Well no shit by sirlark · · Score: 2

      I'm not arguing that prices don't differ from region to region. My point here is that the REASON behind region codes was not to reduce costs. Rather, any reduction in costs observed elsewhere is likely a side effect of whatever the real reason was. If the purpose of region codes was actually to reduce costs, then the regions would have been distributed differently geographically, e.g. South Africa is in the Europe zone not the 'Africa' zone [http://en.wikipedia.org/wiki/DVD_region_code]. 60% (and that's conservative) of the country live in what can only be described as abject poverty, and the 'wealthy' middle class still do not earn salaries comparable to European ones in going by exchange rate which is what counts because they pay European prices (+import tax). Of course it makes perfect sense to lump a country in this situation in with Europe who probably have the most expensive DVD's around going by exchange rate again, but certainly not in terms of earning power within the region. If anything, DVD region codes were used to increase costs, by not allowing someone to buy cheaper DVD's online from outside their own region, unless they just ignored the region code.

  2. Re:Means-tested pricing by SirBitBucket · · Score: 2

    Like Region codes for DVDs... Everybody loved those! It doesn't seem fair to pay more "because you can."

  3. LOL by hjf · · Score: 4, Insightful

    NO SHIT? Someone has been reading my posts on slashdot? THIS is what I've been saying for YEARS, good God! Just look at my rant posts, I must have said that about 5 times at least.

    I'm NOT paying half my monthly salary for a PS3 or XBOX game. Same way as I'm not paying $10-$20 for a movie ticket. That's why movie tickets in my country cost $3-$5 and people go to the movies, while very few don't pirate games. Charge me something I can pay, and I gladly will. Be a jerk and try to charge me twice or 4x as much as the US price and I won't buy it (PS3/XBOX 360 cost USD 800 here. Taxes are not the reason). For me a $100 game is like expecting the average american to pay $500 for a PS3 game. Ain't gonna happen.

  4. "High income countries?" by OhHellWithIt · · Score: 2

    US$8 for non-commercial use in high-income countries—a list that for the present purposes includes the USA, Western Europe, Japan, Australia, Israel, Singapore, and several of the Persian Gulf States (Kuwait, Qatar, the United Arab Emirates, Brunei, and Bahrain), but not Canada.

    I don't understand why Canada merits special favor, when her per-capita income is higher than most of Western Europe, Japan, Israel, and Japan.

    --
    "Who controls the past controls the future. Who controls the present controls the past." -- George Orwell
  5. Easy choice by aBaldrich · · Score: 2

    In developing countries the average cost of life is lower, but the average income is much lower. Where I live, Windows plus Office costs 2-3 average salaries. How can they seriously expect anyone to pay?
    Even those who can afford it find it morally unacceptable to waste so much money on software. You can get it for free and donate the money.

    --
    In soviet russia the government regulates the companies.
  6. Canada by rwv · · Score: 2

    I like how the report is available for free to "Low Income Countries" like Canada.

  7. Re:Obvious much? by $RANDOMLUSER · · Score: 4, Insightful

    Why call it a con? We need MORE studies like this to refute the baldfaced lies of the BSA, RIAA and MPAA. Those clowns pull numbers out of their ass and everyone treats it like gospel. Some actual facts are a useful counter.

    --
    No folly is more costly than the folly of intolerant idealism. - Winston Churchill
  8. Valve by The+MAZZTer · · Score: 2

    Valve discovered that if they release more translations of a game on the day of release instead of delaying for a few months, piracy drops and legit purchases go up. Turns out game crackers translate the games too.

  9. missed the point by bugi · · Score: 4, Insightful

    The point is to generate high piracy rates, in order to generate the PR necessary to give pet legislators an excuse to do their "friends" a favor by passing yet more draconian legislation, allowing heavier and heavier locks, they hope defeating fair-use activities such as time shifting, format shifting and unlicensed commentary.

    The organizations crying over the exploding piracy figures know full well the real score.

  10. That isn't "piracy". by Seumas · · Score: 5, Interesting

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

    Piracy doesn't get you something for free. Piracy is when someone makes unauthorized duplicates of something which they don't own the copyright for with the intention of selling it for a profit. Piracy is the guy on the street in New York who is trying to sell you a movie that is still in the theaters for $20 on DVD or is trying to sell you a copy of some software for $5.

    Stop perpetuating the misuse of these words. Piracy, copyright infringement, plagiarism, and forgery are all different things. Playing a scene-ripped copy of a game or movie is not piracy. That doesn't justify it if you do it, but it's not piracy.

    1. Re:That isn't "piracy". by blair1q · · Score: 2

      That isn't piracy.

      Piracy is when a syphilitic sailor plunders legitimate commerce in a region of the sea, terrorizing and looting ships, murdering their captains, and taking wenches and boys prisoner.

      This stuff is white-collar IP infringement, and calling it piracy is just demonizing it to make political inroads into putting more public resources towards stopping what is, in most cases, barely a misdemeanor.

  11. Re:I'm Shocked!! by langelgjm · · Score: 2

    To be fair, the report has much more than just the info about prices... I just had to condense something down for the summary. There's also a lot of information about the effectiveness (or lack thereof) of the various IP and anti-piracy "education" (propaganda) attempts, empirical data on the failure of enforcement activities to make any dent in piracy, and findings about what does in fact drive prices down to more affordable levels (competition from domestic creative industries). There are six detailed country studies involving local researchers, etc.

    --
    "Anyone who [rips a CD] is probably engaging in copyright infringement." - David O. Carson
  12. Why charge for music, film, books, software ? by unity100 · · Score: 2

    because some people need to make money on what they built on things created from accumulated knowledge of mankind.

    see, you take freely from public - anything - then put something on top of it, and then demand stuff from the public for your addition.

    and suddenly, because you just added a small piece of crap COMPARED TO what you have built that on (start from fire and end it with electricity), you end up fulfilled your obligation to the public, and just and fair in your demands.

    that is despite if, you had to actually pay for what you were taking back from public, you would have to work for hundreds of lifetimes to even come close.

    but its ok to take freely and not give freely. ironically, you will see that same thing in the right-wing mindset of the fiscal conservatives ; they make use of ANYthing in public domain exceedingly freely, but, they start demanding a lot of things in return while trying to hold everything off from the public.

    1. Re:Why charge for music, film, books, software ? by brit74 · · Score: 2

      because some people need to make money on what they built on things created from accumulated knowledge of mankind.

      see, you take freely from public - anything - then put something on top of it, and then demand stuff from the public for your addition.

      and suddenly, because you just added a small piece of crap COMPARED TO what you have built that on (start from fire and end it with electricity), you end up fulfilled your obligation to the public, and just and fair in your demands.

      that is despite if, you had to actually pay for what you were taking back from public, you would have to work for hundreds of lifetimes to even come close.

      but its ok to take freely and not give freely. ironically, you will see that same thing in the right-wing mindset of the fiscal conservatives ; they make use of ANYthing in public domain exceedingly freely, but, they start demanding a lot of things in return while trying to hold everything off from the public.

      Dumb rant.
      "and then demand stuff from the public for your addition"
      We aren't "demanding" anything, it's being offered in the free market. This isn't some TAX situation where you're forced to pay money, regardless of whether you like it. It's a situation where you pay if you want it, don't pay if you don't want it.

      More importantly, if you're going to be logically consistent in your argument, then:
      * Open-Source has no right to demand anything from users (demanding that they roll their changes back into the code, attaching source-code, etc) - is just unwarranted demands. Who are they to build on human knowledge, but then make demands on us for adding this or that little tidbit?
      * Doctors have no right to charge money for their services since their profession is based on centuries of accumulated knowledge that they could never have acquired on their own.
      * Farmers have no right to charge money for their food since it's built on millenia of plant and animal breeding. If you've ever seen some of the natural versions of these plants, you'd know that most of our crops and animals are close to being completely inedible. Thus, they're benefiting from millenia of human work, but they charge us - the human beings, from which they draw their knowledge - money!
      * There are lots and lots of other examples - from construction to metallurgy to writing to literally *everything* human beings do - here we are benefiting from centuries or millenia of accumulated human knowledge where we get paid.

  13. Wrong DVD Region Codes Are A Problem Too by cpghost · · Score: 3, Interesting

    The artificial division of the world in DVD regions is also one major reason for piracy. Take for example North Africa: officially, it is in DVD region 5, but culturally AND economically, with all their ties to Europe, they get all their DVDs from Europe, a.k.a. region 2; legally or pirated, if need be. If the players you have there are all region 2 (and almost all of them are, because they're getting them from Europe), there's no point in buying a region 5 DVD there.

    --
    cpghost at Cordula's Web.
  14. Companies with "perfect" DRM going under? by swb · · Score: 2

    One of the truisms of the software industry I've always heard is that publishers promote and tolerate a certain baseline amount of software piracy to win mindshare and gain experienced users.

    Is there any history of companies that manage to implement a very difficult to crack DRM (eg, dongles, etc) going under or fairing poorly? In other words, once the software becomes too difficult to pirate, the vendor ultimately loses legitimate sales -- hard to evaluate the product, difficult to find experienced users, etc?

    I'm sure it's difficult to say "for sure, DRM made them go under" but it would be interesting to see if that kind of thing has happened.

  15. Totally Unavailable by ProfessionalCookie · · Score: 3, Interesting
    I live in Pemba, Mozambique where there is no place to buy legitimate DVDs. It doesn't exist.

    The DVDs you can buy are cheap chinese rips on a disc in shrinkwrap with cardboard that advertises 24 MOVIES DVD9 BLURAY MPEG4 XVID H264. Really they're just highly compressed low resolution MPEG2 streams. There's typically 4 movies on a disk divided into 6 or so parts labeled a, b, c, d, etc.

    I Don't buy movies here because there's no supply chain. I do buy on iTunes which permits me because I have a US credit card.

  16. Nothing new by Stonan · · Score: 2

    In the early 80s the Commie 64 was targeted for kids. After you convinced your parents to spend $300-$400 on what they considered a toy, you then had to convince them to spend another $50-$60 for a piece of software.The best way to describe the result was 'fat chance'.

    Hacking/copying was the only way most kids could get ANYTHING for the 64. I admit I was heavily into this. Not so much the hacking as the copying and distributing. This was the time when hackers were seen as the Robin Hoods of the early home computer age. Of course this has changed and hackers are seen in a different light now but where they came from hasn't: corporations want way too much money for the product they produce.

    In the late 90s I worked a contract for Electronic Arts. During that time I could buy software that was going for $90 in the stores for $10 from the internal EA store. I know some of the $90 price is retail markup but not all.

    At least EA puts out software that works unlike the MS business model of double-gouging: pay thru the nose for crap software then do it again when the 'upgrade' (corrections & fixes) are released.

    --
    The GEEK shall inherit the earth...
  17. Re:Well no shit [Double Standards] by Tablizer · · Score: 3, Insightful

    Having discount prices for 3rd-world countries can create a double standard when it comes to labor outsourcing. We have to compete with 3rd-world labor at their labor rates, not ours, yet they want discounts on software. You can't have it both ways, otherwise we are giving our jobs away as a charity.

    If they have local adjustments for prices, then we should get local adjustments on wages because our housing and medical costs are far higher than theirs.