Slashdot Mirror
Piracy Is a Market Failure — Not a Legal One
Mr.Fork writes "Michael Geist, Canada's copyright law guru and law prof at the University of Ottawa, posted an interesting observation about the copyright issue of piracy. Canada's International Development Research Centre came to a conclusion that 'piracy is chiefly a product of a market failure, not a legal one' after a multi-year study of six relevant economies. 'Even in those jurisdictions where there are legal distribution channels, pricing renders many products unaffordable for the vast majority of the population. Foreign rights holders are often more concerned with preserving high prices in developed countries, rather than actively trying to engage the local population with reasonably-priced access. These strategies may maximize profits globally, but they also serve to facilitate pirate markets in many developed countries.'"
This story is based on a Social Science Research Council report.
The said report has already been extensively debated on Slashdot here and here.
In soviet russia the government regulates the companies.
The flow my girlfriend went through recently when trying to watch a season of a TV show:
1. Checked to see if it was available digitally on standard channels like Netflix and Hulu (it wasn't).
2. Checked Amazon, where it was available digitally, but only per-episode, at a ridiculous price like $3/ep (making it over $100 for the season, more expensive than on DVD).
3. Downloaded torrent.
She was more than willing to buy it, but it has to be easy and reasonable or "other" methods of distribution win.
That is exactly my case. Let me use ebooks as an example. I always payed for my ebooks. From Amazon, Fictionwise and Ebooks.com. Then, one not-so-beautiful day, "export" restrictions started applying to ebooks. Most publishers would simply not allow those shops to sell me ebooks, because I was on a different country. I even talked to 2 of the authors, and both were aware of this, not happy, and trying to fight these measures, to no avail. As a corroborating note, these specific books were not available in my country, through any channels. Be it physical books, translated or not, or ebooks. Harper Collins is the leader of this "geographic restrictions", as far as I can tell. Well Mr. Publisher, I went out of my way to try getting these books legally. I contacted the shops, contact you and contacted the authors. For reference, everyone but YOU responded. Everyone pointed fingers at you.
*I know there are a lot of people who do not like this term, but I am not currently aware of any other term which brings together all of the various products that can be lumped together under "intellectual property".
That's because they're disparate constructs with completely different purposes that should not be lumped together.
Trademarks exist to protect the public so they know what they're buying.
Copyrights exist to provide incentive for creators to share their works through a guarantee of a monopoly on copies.
Patents exist to convince businesses to share valuable processes from which everyone can benefit.
The problem is that "extremely affordable and reasonably priced" is very subjective. When I was in college with basically no income a $10 cd was not affordable at all. Now that I have a job it is. Reasonably priced is also subjective. To some people $0.99 for one song is not reasonable at all.
Actually, there's a theory in economics that, while it mostly talks about tax rate vs. revenue, can be applied to price versus profit. The short version is that Price v. Profit follows an inverted parabolic line. There's a sweet spot where revenues are maximized, and it most emphatically is not at the highest possible rate in the graph. The same applies to sales (and in fact, it was in that context that my HS Economics teacher presented it): as you raise the price beyond a butter zone, your profits actually drop because fewer people can afford to buy your product, and either buy the products from the competition or steal it.
https://secure.wikimedia.org/wikipedia/en/wiki/Laffer_curve is a good starting point, though that's the theory as it applies specifically to taxation.