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Piracy Is A "Pricing Problem", Can't Be Solved Via Three-Strikes, Censorship

Posted by: , 17:09 AEDT, Tue March 15, 2011

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A new report says that the piracy problem, particularly in less developed nations, can only be solved via pricing changes

The Social Science Research Council has released the results of a new study that shows media piracy cannot be solved by law enforcement, three-strikes, censorship, or any of the methods currently being tried by the entertainment and software industries.

Instead, the report shows that media piracy is a "global pricing problem".

The study largely looked at piracy in developing economies and found that piracy rates were as high as 90% in some of the regions. The study argues that this is not because people in these regions are somehow less moral, and more inclined to commit crimes, but because of local pricing issues, where the cost of a single movie purchase might be a huge percentage of a typical worker's weekly salary.

The report also founds that the pricing problem is exacerbated by multinational media corporations desperate to protect old pricing models in developed countries, where most of their revenue comes from. They do so by keeping prices in developing regions at the same rate as elsewhere, without considering local salary levels, and this translates to people in Russian, for example, having to spend 5 times as much per movie as compared to a person in the US, based on their average salary. 

Writing the report's opening chapter, Joe Karaganis writes, "Our studies raise concerns that it may be a long time before such accommodations to reality reach the international policy arena. Hardline enforcement positions may be futile at stemming the tide of piracy, but the United States bears few of the costs of such efforts, and US companies reap most of the modest benefits. This is a recipe for continued US pressure on developing countries, very possibly long after media business models in the United States and other high-income countries have changed."

Karaganis also believes that piracy may very well be a sign of "unmet consumer demand", a demand that, if met, would actually benefit both producer and consumer and deal a much more serious blow to piracy than any enforcement efforts.

And perhaps the same could just be true for developed markets as well.

Do you think that piracy, even in developed countries, is a sign of "unmet consumer demand", that if media companies do more to provide content in ways to meet the demands of the modern consumer, that this would help to reduce piracy? Post your opinion in this article's comments section, or in this forum thread: 


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