Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Piracy Is a Market Failure — Not a Legal One

Soulskill posted more than 3 years ago | from the dollars-and-sense dept.

Piracy 591

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.'"

cancel ×

591 comments

Sorry! There are no comments related to the filter you selected.

Maximize profit (0)

betterunixthanunix (980855) | more than 3 years ago | (#35712030)

Let me see if I understand...they are claiming that a strategy which maximizes profit globally is a failure? Are these people serious?

Re:Maximize profit (5, Insightful)

Anonymous Coward | more than 3 years ago | (#35712060)

Are they sure the current strategy actually maximises profit?

Re:Maximize profit (2, Insightful)

Anonymous Coward | more than 3 years ago | (#35712174)

They are claiming that a strategy which maximizes profit globally creates underserved markets which turn to illegal channels to recieve content they cannot purchase legally. In short - either sell it to people at a reasonable price or they'll pirate it from someone who can.

Re:Maximize profit (1)

icebike (68054) | more than 3 years ago | (#35712590)

They are claiming that a strategy which maximizes profit globally creates underserved markets which turn to illegal channels to recieve content they cannot purchase legally. In short - either sell it to people at a reasonable price or they'll pirate it from someone who can.

In which case piracy is a bed the rights holders made, and now they should just sleep in it and stop using governments as their attack dogs.

Look, It might be reasonable for a Music CD to cost $12 to $17 bucks in the US, but even in developed countries like Argentina or Brazil that is a lot of money. It would seem to me that no real studies have been done to prove that profitability requires high prices. The people who set the prices on music and video do not live in Chile or Uganda, and worry only that lower prices there would lead to smuggling into higher priced markets.

Re:Maximize profit (3, Insightful)

DdJ (10790) | more than 3 years ago | (#35712180)

Nope! They are saying that they're trying to maximize profit globally, but are instead leaving money on the table in markets which differ too much from the main ones in which they make most of their money today.

Re:Maximize profit (1)

ByOhTek (1181381) | more than 3 years ago | (#35712486)

But, when those markets are close, then they may not be able to segregate them, and the profit maximization come with losing one market.

ex.
Two markets are in effectively the same geographical location (i.e. same city). One group will pay a max of $20 for a DVD, and the other a max of $5, and lets say that the media co's profit scales exactly with the price (so 4x profit on the $20 DVD). Now, lets say that the reduction to $5 will only double the number of consumers. The company will have a lower profit margin selling at $5, so it is not in their best interest, because the people who will pay $20, would still rather pay $5, and would do so, if it were an available option.

Re:Maximize profit (1)

Attila Dimedici (1036002) | more than 3 years ago | (#35712250)

No, they are claiming that a strategy which may maximize profits results in the creation of pirate markets. Basically, they are saying that if piracy of your intellectual property* is damaging your profits, it is your because your pricing strategy has failed. Or to state it another way, if a significant number of people are pirating your intellectual property* who would otherwise buy it, you are charging too much for your product.


*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".

Re:Maximize profit (1)

PitaBred (632671) | more than 3 years ago | (#35712346)

"copyright or patent infringement", or since we're talking about "content" here, copyright infringement is all you need.

Re:Maximize profit (5, Informative)

Anonymous Coward | more than 3 years ago | (#35712418)

*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.

Re:Maximize profit (1)

slackergod (37906) | more than 3 years ago | (#35712270)

That's what they said, and they are serious.

The article contends that a strategy to maximize profits in developed countries has two effects: maximizes profits globally, and fosters piracy in undeveloped countries. You seem to have focused on the first effect, and are wondered at how that could be bad thing for business... but you missed the second effect.

Their idea is that If the strategy fosters a thriving pirate market, then in the long run that market will grow large enough to hurt the legitimate market (even in developed countries)... which in the long run will cause the strategy to actual undermine profits, both locally and globally. So even though it will seem like a "success" during the short run, it will have to be abandoned at some point.

If the study is correct, I'd say the optimal path would in fact be a hybrid - start out targeting the developed market, but watch the pirate market, and do drastic price drops in that market before it gets established. That way, the company maximizes short-term profit in developed countries, but retains control of the world-wide market in the long run. And long-term market control is definitely more important, else competitors and piracy will drive your price below a sustainable level.

Re:Maximize profit (1)

ByOhTek (1181381) | more than 3 years ago | (#35712274)

It's a failure if you consider the goal to have the media available to everyone who wants it.

ex:

(A) A DVD at $20 will be purchased by 1 million users, with the publisher taking $10 in profit per sale ($10 million profit), with 4 million pirates.
(B) Now, lets say at $5 it would be purchased by 4 million users, with the publisher taking $1 in profit per sale ($4 million profit), with 1 million pirates.

Each case is a success and a failure. From a pure capitalistic perspective, (A) is a success, maximizing the profit, but a failure at getting the media into the hands of all that want it. Conversely, (B) is a failure in the capitalistic perspective (does not maximize profit), but it is a success at minimizing piracy and getting the media into the hands of those who want it.

So, in the end, success and failure are determined by goals. Of course the media giants are motivated by profit - they don't do it out of the goodness of their black oozing hearts.

Re:Maximize profit (1, Insightful)

GooberToo (74388) | more than 3 years ago | (#35712532)

I agree with your over all point in generic economics but it also glosses over some very serious issues. Larger sales can also mean higher overhead in support and distribution as well as liability. So while the raw numbers may make sense, once the final numbers are tabulated, lower market penetration at high market price can frequently yield best profit potential (more profit for less work; thusly allow for more expansion and growth and higher paid jobs). Furthermore, this in turn typically has the effect of creating multi-tiered markets whereby they will come in at a lower price point; thusly expanding the market and encouraging yet additional competition.

In this case, pirates very successfully erode the primary markets and all but destroyed the second and especially third tier markets. Which further underscores, this absolutely is not an economic failure. This is a societal failure, which BTW, many studies have long, long shown, in that lots of people now believe crime is not criminal so long as they can convince themselves, true or otherwise, no one is hurt. And that if they want something, regardless of the cost and the size of their blinders, they'll steal it because, while they've done nothing to earn it, they deserve it. Literally, we now have the self-entitled generation.

This is, of course, why you see so many pirates constantly parroting the same completely false propaganda over and over again. Its because they continue to reassure themselves and attempt to recruit others, which in turn acts as a form of self re-assurance, they are not criminals. This is very important to sustain the delusion else it means admitting that yes, in fact you are a criminal. And most people simply don't want to admit they are, in fact, criminals. Which brings us back around again - its a societal failure - not an economic failure.

Re:Maximize profit (1)

Antisyzygy (1495469) | more than 3 years ago | (#35712540)

Either way, the argument that piracy is damaging companies is a bunch of hooey. This theory (if you believe it) shows that you can either get everyone to buy media by reducing prices and this have less to no piracy, or you can make the same amount of money selling it to less people and have pirate markets. This basically means that the piracy litigation frenzy happening now is not to protect potential profits being lost, its to make additional profits from people that would never have bought it in the first place unless you changed your strategy. As far as I knew, courts were not meant to be a way to make money or open new markets based solely on lawsuits, its a way to have your rights protected, have justice, and maintain order.

Re:Maximize profit (1)

Kjella (173770) | more than 3 years ago | (#35712520)

A market optimal model collects exactly as much from each person as he is willing to pay. So if there's an American willing to pay 10$, a Greek willing to pay 5$ and a Chinese willing to pay 1$, you find a way to collect all 16$. Obviously a single global price is a restriction on that, either you lose some customers or you lose some profit. What this study shows that not only do you lose customers, you turn them into pirates. No real surprise there.

What I don't like is the idea where it's going, this is where region codes comes from. Split the market, tailor the price and maximize the profit. It's the one way globalism again, they can shop anywhere for cheap labor but I can't do the same for their products. I have to get the expensive European version, now with the added excuse that it's to combat piracy. And maximize their profits, but they don't like to mention that loud.

Duh? (0)

Anonymous Coward | more than 3 years ago | (#35712036)

Duh?

Amen to that (2, Informative)

Tigger's Pet (130655) | more than 3 years ago | (#35712040)

Let's hope that somebody who can actually achieve something in the marketplace actually listens to what Michael Geist has got to say.

Re:Amen to that (0)

Anonymous Coward | more than 3 years ago | (#35712066)

Who is John Gault?

Re:Amen to that (1)

GreyLurk (35139) | more than 3 years ago | (#35712134)

A fictional character from Ayn Rand's novel "Atlas Shrugged"?

Re:Amen to that (2)

archen (447353) | more than 3 years ago | (#35712178)

I'll take "Other stuff that isn't related to Canada" for $500 Alex.

You know, in the olden days... (0)

Anonymous Coward | more than 3 years ago | (#35712282)

You know, that kind of talk in the olden days would've gotten you branded as an heretic and burnt at the stake if you don't recant. Today the MAFIAA would only work to discredit you and strip you of your cushy job, leaving you with the prospect of facing life on the street...

Re:Amen to that (5, Insightful)

Hatta (162192) | more than 3 years ago | (#35712356)

Don't bet on it. All the science we have has told us that Cannabis is at least as safe as any drug in our medicine cabinets. Yet we have been fighting a war against it for decades.

You can't use facts to win a debate the government isn't even willing to have.

Re:Amen to that (3, Insightful)

mini me (132455) | more than 3 years ago | (#35712376)

I'm somewhat skeptical. I sell an iOS app at the usual App Store rock bottom prices. 90+% of my downloads are still attributed to pirates. I can't really drop the price any lower without giving it away for free. Pirates are going to pirate no matter what the cost is.

Mmmm... (1)

Frosty Piss (770223) | more than 3 years ago | (#35712048)

"Who knew!"

Blah blah. (2)

SatanicPuppy (611928) | more than 3 years ago | (#35712064)

If demand is below the price set by the seller, the buyer will acquire the item through alternate channels where available.

Piracy dropped like a stone when cheap downloads became available. If you want to kill it off entirely, stop charging the same price for media that are new and media that are 20 years old.

Re:Blah blah. (1)

panda cakes (1333537) | more than 3 years ago | (#35712252)

Check out how much iPhone/Android $0.99 games are pirated.

Re:Blah blah. (0)

Anonymous Coward | more than 3 years ago | (#35712518)

How many of them are worth $0.99?

Re:Blah blah. (1)

khr (708262) | more than 3 years ago | (#35712278)

If demand is below the price set by the seller, the buyer will acquire the item through alternate channels where available.

Or not bother acquiring the item at all...

Re:Blah blah. (1)

SatanicPuppy (611928) | more than 3 years ago | (#35712582)

True. But in this case, it's quite easy to get them unofficially, so the price burden needs to be pretty low.

Re:Blah blah. (1)

Anonymous Coward | more than 3 years ago | (#35712362)

Indeed. When I was younger, I routinely pirated things like video games, mostly due to me being unable to afford them. (Posted AC for obvious reasons.) Also, I disliked having to deal with the physical fragility and bulk of CD/DVD media. Some games also had hugely annoying DRM, like Splinter Cell: Chaos Theory. I had legally purchased the game, but the DRM was so screwy that it caused trouble with my then-current Windows Vista computer. Simply using the crack to avoid the DRM issues was faster and easier to get working than the actual game installer.

As an adult, my amount of piracy has decreased to essentially nothing. I think this has a lot to do with better pricing, my increased income, less annoying DRM, and better distribution channels. Buying a game like Mass Effect for $20 on Steam (or Star Wars: Knights of the Old Republic for $2.50 on sale a month or two ago) is well within my budget, I don't have to deal with physical media, can re-download the game at any time (often faster than on P2P networks), and so on. Steam, while using some degree of DRM, lacks the hugely obnoxious methods that were previously used. From what I was reading, the developers are able to bring in a greater amount of profit on games sold on Steam than they would get through physical retail channels -- I pay less, they get more, and things are more convenient for all involved.

Steal it all. (0)

Anonymous Coward | more than 3 years ago | (#35712068)

I download all the music and warez I can. It doesn't hurt anyone, it's not stuff I would have bought anyway.

Re:Steal it all. (4, Insightful)

camperdave (969942) | more than 3 years ago | (#35712268)

Exactly! Piracy is a victimless crime, like punching someone in the dark.

Re:Steal it all. (1)

GooberToo (74388) | more than 3 years ago | (#35712318)

Exactly! Piracy is a victimless crime, like punching someone in the dark.

That is deeply profound...and funny...and true!

Re:Steal it all. (2)

CrispyZorro (1809948) | more than 3 years ago | (#35712322)

I download all the music and warez I can. It doesn't hurt anyone, it's not stuff I would have bought anyway.

So, you only buy stuff that you can't download? Is any of it stuff that you would have bought? How do you differentiate? My guess is that once you get yourself a good download habit it's hard to justify buying anything.

Re:Steal it all. (2)

gregor-e (136142) | more than 3 years ago | (#35712594)

Not so. Glancing up at my games shelf, I count five titles that I bought after having downloaded the pirate version. In some cases, I continue to run the pirate version, since it isn't burdened with cumbersome DRM that requires you to dig up the CD and insert it in your computer before you can play.

Theft is depriving someone of something they would otherwise have had. So piracy can be a form of contingent theft, when you would otherwise have bought the pirated item. Warez I try and like, I buy. There are some cases where I do commit theft, simply because the software is much too expensive for the three or four times a year that I use it. I feel that in those cases I am stealing the value delivered, rather than the full price of the package. If there were a pay-per-use model for these expensive programs, I would gladly pay for the value I actually receive.

We are all cultivators of the economic garden. The things we fertilize with our money are the things that flourish. I like to think most people realize that.

No price beats free (0)

Anonymous Coward | more than 3 years ago | (#35712072)

EOM

Re:No price beats free (1)

MobileTatsu-NJG (946591) | more than 3 years ago | (#35712316)

No price beats free

Wrong. See iTunes.

Re:No price beats free (0)

Anonymous Coward | more than 3 years ago | (#35712506)

Negative price beats free.

monkeys; bred out flap 'cause poking started there (0)

Anonymous Coward | more than 3 years ago | (#35712076)

how did we know they were going to eat us anyway? creeps. we'd of grown poison privates. privacy? creeps.

so that explains illegal file-sharing (1)

Anonymous Coward | more than 3 years ago | (#35712098)

... where affluent college kids spent many hours keeping their collections loaded with music, video games, movies, and books. Because they couldn't afford it? But they can usually afford to upgrade to the latest and greatest smart phones and gaming consoles. Funny how that works.

Re:so that explains illegal file-sharing (2)

N0Man74 (1620447) | more than 3 years ago | (#35712236)

Alternatively, they could buy the content and not afford the system to run it on?

Certainly people do pirate things they could actually afford, but those college kids also frequently pirate more than they could afford. I've known people that pirated movies, games, and music that would have exceeded their annual income if they actually bought them.

Re:so that explains illegal file-sharing (1)

mikael_j (106439) | more than 3 years ago | (#35712596)

Well consider this:

If a person spends $2,000 on a computer and a large TV hooked up to the TV and this person then goes on to pirate a large number of movies and TV shows (let's say 80 movies and 30 full seasons of TV shows), with an estimated retail value of $25 per movie and say $20 per season of a TV show that comes to $2,600 worth of movies and TV shows. Horrible horrible piracy, right? Except of course that it's highly likely that this person would not have spent the money on movies and TV shows anyway.

To use your comment about college students, this may not be an "affluent" college student (nice use of a weasel word there) but merely a college student who's living off student loans and barely making ends meet, someone who has barely been able to save something like $80 per month over the last two years and is now able to afford the luxury of a TV that isn't his older brother's old barely functioning 14" CRT TV. He is also able to get his own computer rather than use the school computer labs. Now, do you really think this is the kind of person who would've been paying for 2-3 DVDs or Bluray movies at $25 each every month as well as a season or two of a TV show at $20 every month (with the previous numbers it comes to $108 per month in media purchases, not really likely for someone who can barely afford to pay the bills and food)?

It's easy to be a high-ranking corporate executive with a $250k+ yearly income (with enough left over every month to buy a couple of hundred movies) and bash those who can't decide to just buy four DVDs rather than three because that means they starve. Really, there are plenty of people like that and I'm sure some troll will come swooping in now to rant about "niggers" and "white trash" on welfare with 50" TVs, that's not really an accurate view of the lifestyles of most poor people though. Sure, there are plenty of poor people who own one or two relatively expensive luxury items, but they often have to make the choice between giving up good food (not expensive dinners-good, just plain "not shitty"-good), new clothes and other fairly basic things for extended periods of time or not having that little luxury in their otherwise miserable lives (I've known a few people who basically spent their entire lives up to the age of 25 or so below the poverty line, it's not a fun lifestyle even if you do manage to scrounge up enough money to buy a decent gaming PC or a nice bicycle).

What about... (1)

kevinNCSU (1531307) | more than 3 years ago | (#35712106)

What about Penny Arcade's Indie fundraiser where you could name your own price right down to a penny, with proceeds going to children's charity that was still rampantly pirated? I don't doubt there's a lot of things people pirate because they simply can't afford it otherwise (the necessity of them getting it non-withstanding), but I think there's also a vast number of people that will pirate because they simply don't want to be bothered to pay anything no matter what the price-point.

Re:What about... (1)

RichMan (8097) | more than 3 years ago | (#35712200)

I would argue that the payment mechanism can also form a significant barrier. Having to create a paypal or other account or enter a credit card number is a barrier. The entering of the information is a barrier, trust of the system accepting the information is also a barrier.

Re:What about... (1)

hjf (703092) | more than 3 years ago | (#35712326)

A lot of online game servers and download sites (like Rapidshare or Megaupload) also accept payments through local resellers. Credit cards are not that common outside US so a lot of people can't pay with them. It's not about security or privacy, it's about accessibility.

nailed that one. (2)

mevets (322601) | more than 3 years ago | (#35712364)

Long lineups at the checkout are a barrier; so I just stuff the things in my pockets and head for the door.

Re:What about... (1)

cobrausn (1915176) | more than 3 years ago | (#35712408)

I would argue that there is a significant number of people to whom 'payment' is a barrier. As in they don't want to pay for it, and there are plenty of ways to do so that are pretty easy to do and avoid any legal repurcussions, so they don't. Considering what we know about how some people tend to behave when they can do things anonymously, is this really surprising?

Re:What about... (0)

Anonymous Coward | more than 3 years ago | (#35712354)

It was not Penny Arcade's fundraiser. It was done by Wolfire Games. And it really worked - it made me pay for software for the first time in quite a long time. Give people a good deal, make it convenient, make it safe (and by safe I mean NO GODDAMN DRM)... and they will pay.

Re:What about... (1)

MickyTheIdiot (1032226) | more than 3 years ago | (#35712400)

I think there are always going to be a lot of people that steal because they can.

Winnona Rider? Lindsay Lohan? Did either one HAVE to steal anything?

The problem is that RIAA logic counts these people as "lost revenue" when they were never going to get their money to begin with. Where they are ACTUALLY losing money is with the people that are willing to pay but where it out prices what they are willing to pay. That is supply/demand economics.

There are people that will NEVER pay and there are people will ALWAYS pay.

Re:What about... (3, Insightful)

PitaBred (632671) | more than 3 years ago | (#35712404)

So they're not worth worrying about, because they're not and never will be your customers. Look at how much money the indie devs made as compared to what they were on track for without that promotion. Look at all the charity that was helped because of it.

Yes, there are douchebags out there. But the majority of people are decent folk that understand value exchanges. Give them value for their money, and they'll gladly part with it at appropriate price points. Especially if you make it easy like Steam does.

Hold on... (0)

Alworx (885008) | more than 3 years ago | (#35712122)

So it's right to steal a Ferrari?

Re:Hold on... (1)

FrankPoole (1736680) | more than 3 years ago | (#35712184)

Don't you know that taking a copy of something isn't stealing? Serious point: I've always wondered why more people simply don't walk right out of restaurants without paying. Food at a lot of big chain restaurants and trendy, expensive spots are way overpriced -- so why do people pay? It's not like there are doormen or video cameras. Why not just walk out the front the front door?

Re:Hold on... (1)

vlm (69642) | more than 3 years ago | (#35712284)

Serious point: I've always wondered why more people simply don't walk right out of restaurants without paying. Food at a lot of big chain restaurants and trendy, expensive spots are way overpriced -- so why do people pay? It's not like there are doormen or video cameras. Why not just walk out the front the front door?

Almost all the money comes from someone trying to impress someone else with how much they spent... Not being seen paying the bill would kind of defeat that purpose. Much like "why tip if you'll never see that waiter again?" So you can be seen tipping by your date, of course.

Places that actually focus on food filling a stomach, poor quality though it might be, know this, so McDonalds, Taco Bell, etc, require you to pay at the counter.

Re:Hold on... (1)

kevinNCSU (1531307) | more than 3 years ago | (#35712468)

Almost all the money comes from someone trying to impress someone else with how much they spent... Not being seen paying the bill would kind of defeat that purpose. Much like "why tip if you'll never see that waiter again?" So you can be seen tipping by your date, of course.

Places that actually focus on food filling a stomach, poor quality though it might be, know this, so McDonalds, Taco Bell, etc, require you to pay at the counter

Or....it could be that people interested in spending the time to go and sit down at a nice restaurant with excellent food are willing to pay for said excellent food because they respect the time and effort put into it by the chefs, restaurant owner, and wait staff. Plus you have to interact with your waiter who you would essentially be stealing from which makes it even more psychologically difficult then shoplifting.

On the other hand fast food restaurants aren't respected, their workers aren't respected, and you have very little interaction with them so it's much less psychological barrier to ripping them off.

Re:Hold on... (1)

khr (708262) | more than 3 years ago | (#35712330)

Don't you know that taking a copy of something isn't stealing?

That's something about my father I never understood. He taught me about not stealing and got pretty angry one time, as a teenager, that I stole a candy bar from a store (hanging around with other teens who were regular shop lifters).

But when it came to software he'd get upset that I wanted to buy it, "can't you copy it from somewhere?".

I guess it's the difference between taking a physical item and a non-physical one. And to a nontechie, it's clear stealing a candy bar means the store can't sell it to someone else. But copying software, the vendor can still sell it to customers willing to pay for it...

Re:Hold on... (1)

Decessus (835669) | more than 3 years ago | (#35712534)

I think it's because most people understand, even if it's only on a subconscious level, that if people only follow the rules of society when they are being watched or forced to then that society won't last for very long.

Re:Hold on... (0)

Anonymous Coward | more than 3 years ago | (#35712206)

So it's right to steal a Ferrari?

YES!

Re:Hold on... (1)

MickyTheIdiot (1032226) | more than 3 years ago | (#35712436)

If you could take a copy of the Ferrari without degrading the original copy I would say that is *not* stealing. It might be something else illegal, but its not stealing. That's why it is such an unfair word for the *AAs to use.

Re:Hold on... (1)

Grey Ninja (739021) | more than 3 years ago | (#35712224)

Nope. He's saying that it's probably reasonable to expect people to copy a Ferrari, if they have the means to easily do so.

Re:Hold on... (0)

Anonymous Coward | more than 3 years ago | (#35712234)

If someone can produce a bit-identical copy of a Ferrari for little to no cost and sell it for 1/25th of the original's price your argument would hold some merit, but we're dealing with the real world here. Back to your RIAA basement you troll!

Re:Hold on... (1)

chemicaldave (1776600) | more than 3 years ago | (#35712240)

Unfortunately for most consumers, their download speeds aren't nearly high enough to successfully torrent a Ferrari.

Re:Hold on... (0)

Anonymous Coward | more than 3 years ago | (#35712526)

If they have FiOS it is...

Re:Hold on... (0)

Anonymous Coward | more than 3 years ago | (#35712256)

If you could create a Ferrari in your home for free, then yes, everyone should have a Ferrari if they want one.

Re:Hold on... (1)

Alworx (885008) | more than 3 years ago | (#35712292)

And good riddance to R&D at Maranello....

Re:Hold on... (0)

Anonymous Coward | more than 3 years ago | (#35712264)

You can't copy/paste a ferrari.

Re:Hold on... (1)

MobileTatsu-NJG (946591) | more than 3 years ago | (#35712336)

So it's right to steal a Ferrari?

It's wrong to make an identical copy of a Ferrari?

Re:Hold on... (2)

hjf (703092) | more than 3 years ago | (#35712406)

You're missing the point. A ferrari is a luxury item. A movie, or a video game, is not. There is no point in charging people more than they can afford for something that's not a luxury. In my country, videogames are twice as expensive as in the US. Very few people buy originals. But movie tickets are 1/3 to 1/4th the US price. Cinemas are always full.

Bottom line: price your stuff according to what people can afford.

Re:Hold on... (1)

CarsonChittom (2025388) | more than 3 years ago | (#35712548)

A ferrari is a luxury item. A movie, or a video game, is not.

Actually, they're both luxury items—it's just that one is a more expensive luxury item. You say "in my country," so I will take that to mean that English is not your first language; please excuse me if I'm explaining something you already know. "Luxury" in this context means simply "unnecessary for survival": basically everything except food, water, shelter, and possibly utilities (such as electricity or natural gas).

Your point, though

Bottom line: price your stuff according to what people can afford.

is dead on.

Re:Hold on... (1)

Batmunk2000 (1878016) | more than 3 years ago | (#35712420)

If the means to steal a Ferrari were easy then people would do so. Although a dependency on local law enforcement is the most powerful deterrent against stealing a Ferrari.
If they removed strict law enforcement against car theft and thefts went up, it sounds like this dude would say it is the manufacturer's fault for having it be so expensive. Somewhat absurd if you ask me. Companies need to make reasonable protections for their own products (i.e. Don't sell something that is easily copied) but without private property productions from law enforcement - civilization crumbles. It isn't as simple as "the price is too high for my N-Sync CD so I *have* to steal it".

Yet another repost (3, Informative)

aBaldrich (1692238) | more than 3 years ago | (#35712138)

This story is based on a Social Science Research Council report.
The said report has already been extensively debated on Slashdot here [slashdot.org] and here [slashdot.org] .

Meanwhile, reality disproves the study... (1, Interesting)

GooberToo (74388) | more than 3 years ago | (#35712172)

'Even in those jurisdictions where there are legal distribution channels, pricing renders many products unaffordable for the vast majority of the population.

Most, if not all, Western nations completely invalidate such studies given that music is extremely affordable and reasonably priced - and much cheaper than capitalistic pricing would otherwise allow.

Its a societal failure, not an economic failure. Period.

Re:Meanwhile, reality disproves the study... (2, Insightful)

Anonymous Coward | more than 3 years ago | (#35712260)

Most, if not all, Western nations completely invalidate such studies given that music is extremely affordable and reasonably priced - and much cheaper than capitalistic pricing would otherwise allow.

Its a societal failure, not an economic failure. Period.

So you have also done a multi-year study to back up your claim. I'd love to see your data, and compare it to Geist's study.

Re:Meanwhile, reality disproves the study... (3, Informative)

BassMan449 (1356143) | more than 3 years ago | (#35712428)

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.

Re:Meanwhile, reality disproves the study... (1)

Anonymous Coward | more than 3 years ago | (#35712510)

How about "I'm not willing to feed the evil beast record companies with (essentially) infinite copyright durations?" I do pay for music from Jamendo. I do not pay for music from big record companies.

Re:Meanwhile, reality disproves the study... (1)

YodasEvilTwin (2014446) | more than 3 years ago | (#35712432)

"Reasonably priced"? If it were reasonably priced, then music label execs and popular artists would be paid reasonably, not extravagantly. If I paid for all the music I listen to, I would be several thousand dollars in debt. And I don't listen to half as much music as most people I know.

Re:Meanwhile, reality disproves the study... (1)

Agent.Nihilist (1228864) | more than 3 years ago | (#35712440)

'Even in those jurisdictions where there are legal distribution channels, pricing renders many products unaffordable for the vast majority of the population.

Most, if not all, Western nations completely invalidate such studies given that music is extremely affordable and reasonably priced - and much cheaper than capitalistic pricing would otherwise allow.

Its a societal failure, not an economic failure. Period.

I'm sorry but what!? Music in western society is priced way outside its actual value. Even more so now that the Label are trying to sell you a limited use license instead of a personal copy. Remember, a music CD at retail is roughly the equivalent of a weeks worth of food.

Re:Meanwhile, reality disproves the study... (0)

Anonymous Coward | more than 3 years ago | (#35712550)

You think putting "Period" at the end of your garbage turns you into an oracle? What are you, 12?

A $10-20 CD is too dear, the market only wants one or two tracks from it. Market failure.

A $20 DVD is too dear, they're full of crap that prevents you from getting to the movie or show you bought them for. The DVD-R torrents are a better product. Market fail again.

Re:Meanwhile, reality disproves the study... (1)

cornicefire (610241) | more than 3 years ago | (#35712568)

You're spot on. I've gotten tired of sitting down for a $5 coffee with friends who parrot what Geist and his astroturfing friends keep saying. My friends have learned not to invite me to meet them at Starbucks and then repeat random blather about how the content industry "just doesn't get it" and "screws us." Part of the reason that kids today don't have any money is the tenured radicals like Geist work at schools charge $50k+ for a degree that isn't worth much anymore. If he really wanted to do something for the poor, he would find a way to give degrees away for free. Oh wait. Then he wouldn't have a job that gives him all of this spare time to blog about copyright.

Gaming Piracy (2)

Onuma (947856) | more than 3 years ago | (#35712190)

Valve has got an excellent method of dealing with piracy. While not perfect, it does tend to cut back on the "I can't afford it, so I'll just steal it" attitude. You really can't argue price points when you can purchase a 12-game bundle for $20US, even if only half of the games are ones you'd actually play.

They can afford to charge lower prices because they have a great content delivery method, which cuts out the whole packing/shipping process. There is virtually no extra cost for delivering one or one thousand extra copies, and therefore overhead is minimized = profits maximized.

I have to agree, at least in part, with TFA. Proliferate your business in a method economical and accessible to the consumer, and you're far more likely to cut down on piracy. After all, if everybody has your product at a price they're willing to afford, there is no reason for piracy.

Here's an example of market failure (5, Informative)

richtaur (1234738) | more than 3 years ago | (#35712192)

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.

Re:Here's an example of market failure (-1)

Anonymous Coward | more than 3 years ago | (#35712388)

It is also an example of theft. I think the real issue is greed. We want everything right now. Easy to come by credit cards, vehicle loans, mortgages: we want it all now. If we as a society just slowed down and were legit and resonable we would be a lot more content as a whole.

Re:Here's an example of market failure (0)

Anonymous Coward | more than 3 years ago | (#35712458)

4. Buy DVD, since it's cheaper, then sell it once you're done watching?
5. Rent DVD set from the video store for really cheap?

Case in point: me (5, Informative)

Anonymous Coward | more than 3 years ago | (#35712216)

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.

Eastern Europe (3, Interesting)

sourcerror (1718066) | more than 3 years ago | (#35712296)

In Eastern-European countries average salaries are around $600, but there's a highly educated youth, with cheap internet access (around $30 a month), and a lot of free time, and relaxed copyright laws (suing warez downloaders is not legally possible; you can only sue those who make a profit while pirating ).

At the university where I studied, teachers expected students to use pirated Matlab, as they didn't had an academic license program, so they provided intranet warez copies.

At the same time there's strong opensource culture as well.

Firefox usage:
Poland: 42%
Slovakia: 41.2%
Hungary: 40.3%
Estonia:37.3%

(And my guess is that in China hacker groups are government supported.)

engaging the local population (2)

Maxo-Texas (864189) | more than 3 years ago | (#35712302)

"rather than actively trying to engage the local population with reasonably-priced access. "

You mean like high-school and college students without any income?

More quantity, cheaper, faster (1)

srussia (884021) | more than 3 years ago | (#35712312)

That's a market triumph! What did you think markets were for?

liberal BS (0, Flamebait)

alta (1263) | more than 3 years ago | (#35712380)

what sort of Liberal entitlement BS is this... I don't care WHAT the prices are for an MP3, software, video, porn, whatever. Be it $.50 or $50000. If I make something, it's MY right to set a price for how it sells. If I want to set a low price and go for volume, my decision. If I want to set a high price and go that way, still, my decision. The point is, I GET TO SET THE PRICE FOR WHAT I MAKE.

If I made bird houses and charged $20,000 for each one, but you decided that's too high and you stole one... Guess what. YOU FREAKIN STOLE IT. I don't care what country you came from, and what the poverty level is there.

And, so fucking what if the cost of good sold is a perceived $0 because it's a virtual item. Yay me for finding something with a very small COGS.

So in my humble option, Piracy is neither a result of market failure, or legal failure, but a failure in ethics.

Re:liberal BS (0)

Anonymous Coward | more than 3 years ago | (#35712498)

And what use are ethics when trying to understand and predict sociological behaviour? I suppose your solution is to throw anyone who doesn't abide by your rules in jail, eh? Some people are smarter and more progressive than you, you go build your over-priced birdhouses and cry about how unethical the world is, we'll try to find out what the most productive, rewarding, enlightened existence for humanity might be.

Re:liberal BS (0)

Anonymous Coward | more than 3 years ago | (#35712500)

That's the thing, though, you have no natural right to an idea (i.e. intellectual property) that right is granted by various governments. In theory, for copyright, this was to more quickly increase the public domain (that contract has been soundly broken).

You have the right to keep your works for yourself or share them with the world. Your right to control all copying of your work is not unilateral, people do have a right to their culture, so if you share it, you aren't the only one to set the terms, it's a negotiation, whether you like it or not (and I presume you do not). And the more popular your idea the more it becomes culture and the more people will want to experience it.

And however you think the world should work, many great people have thought the exact opposite of you from Lessig (current) back to Jefferson and before.

Re:liberal BS (1)

Sponge Bath (413667) | more than 3 years ago | (#35712516)

"...what sort of Liberal entitlement BS is this"

You missed the point. The study revealed that pricing above an affordable level for something that is easily and inexpensively copied results in piracy. It does not say piracy is right or wrong. It does not contain any sort of "liberal entitlement BS".

Re:liberal BS (1)

pclminion (145572) | more than 3 years ago | (#35712556)

Digital distribution makes it impossible for you to realize the kind of price control you are talking about. That's really the beginning and the end of it. Be outraged if you want, but it's about as helpful as getting mad at the door you just slammed your little toe into. The door just sits there...

Re:liberal BS (0)

Anonymous Coward | more than 3 years ago | (#35712584)

The guy you sell it to can do whatever he likes with it.

You don't own it after you sell it.

Unaffordable? (0)

Anonymous Coward | more than 3 years ago | (#35712412)

"pricing renders many products unaffordable for the vast majority of the population"

If it's "unaffordable" then isn't it considered stealing?
I want a Lamborghini but the pricing has made it unaffordable to me. Maybe I should go steal one and then complain how expensive they are.

The people (1)

base_chakra (230686) | more than 3 years ago | (#35712442)

Piracy evidences the unstoppable propagation of art and ideas within and across cultures. To characterize it as a "market failure" only acknowledges the failure of the economically powerful to co-opt and monetize this particular mode of circulation. Even if media prices plummeted to lows that media companies would consider unthinkable, piracy would continue because the impetus to subvert would remain, and the demand for alternative distribution methods, file formats, and content would survive.

Public Goods (1)

PennaG (2033704) | more than 3 years ago | (#35712470)

The real problem is way more obvious. If you ever studied microeconomics, you probably know that the price equals to the marginal cost (at least on a "perfect" market). You learned something about Public Goods. The pure public goods are non-rival (meaning that the fact that I use it doesnt get in the way of you using it) and non-excludable (meaning you cannot exclude someone from using it). So if you look at the marginal cost of downloading a software on the internet has almost zero marginal cost. So its price should be zero. And if you look at it in therms of type of product, youll realise that its also a pure public good. If you take the market failures that those points bring, youll see why we are having so many problems on economic and legal aspects of software (and digitalized information in general). Turning a public good in a private one can be very difficult on the internet age.

not a market failure (2)

arpad1 (458649) | more than 3 years ago | (#35712478)

The good professor's got a peculiar view of things.

The intellectual property owners have a legal monopoly and the market is inherently averse to monopolies rewarding everyone who figures out a way to undercut the monopolists. Far from being a market failure it illustrates the proper functioning of the market and the role of government in interfering with the proper functioning of the market.

The purpose of copyright, like the purpose of the patent, is to confer a temporary monopoly to encourage the development of worthwhile ideas. That purpose is undercut by endlessly extending copyright into the indeterminable future. It's hard to even guess what that sort of appropriation of the patent system would've resulted in but it would hardly have been to serve the end of encouraging new developments.

Not true in the developed world (1)

cornicefire (610241) | more than 3 years ago | (#35712488)

While this may be true in the poorest countries, it's not true in Sweden, Canada or the United States. The folks who are paying RapidShare, Pirate Bay or the USENET losers seem to be able to afford $20+ a month. They could spend that at legit stores like Amazon or iTunes, but they choose not to. But what can you expect from a tenured professor in a profession that's spawning such wonderful scamblogs like http://firsttiertoilet.blogspot.com/ [blogspot.com] .

Hey, we are just doing our jobs (0)

Anonymous Coward | more than 3 years ago | (#35712490)

Did we ever promise to provide entertainment/software to the masses at a fair price? No, we promised to maximize profits. If you don't like it, get a second job and put that blu-ray on lay away. If you plan to do something about it we will do our best to put you in jail to protect our honest, hard working shareholders. And this business:

"While the law may call for lengthy prison terms for selling counterfeit DVDs, many local judges engage in a “judicial triage” where economic harms to foreign rights holders take a back seat to local criminal activity that poses threats to public health and safety."

That has clearly has to change.

I agree, so I steal mercede benz (0)

Anonymous Coward | more than 3 years ago | (#35712512)

I cannot afford a mercedes I have to steal that. Mercedes is just leaving money on the table because they won't make one at a reasonable price.

This applies to Internet Piracy as well (1)

Geekner (1080577) | more than 3 years ago | (#35712578)

While this article is relating to physical and for-profit piracy in poorer foreign countries, most of the points apply to internet-based piracy in First-world countries.

I, myself, pirated video games when I was younger. However, with the rise of digital distribution services, such as Steam, I don't need to. The amount disposable income hasn't changed much, but the value of legally purchasing games via dealing with the challenges of piracy has.

This has nothing to do with new DRM techniques, in fact, those harm my desire to purchase legally. If I purchase a game via Steam, I can install it any number of times as long as Valve is still in business (which is it's own issue). The Steam client provide other benefits for me, automatic patching (which is a great, but under appreciated, bonus), many useful community/friends support, and easy access to new and/or independent games.

What do I get if I buy a heavily DRM'ed game from $RETAILSTORE? A longer install process, annoying patch process or multiple background patching programs, obtrusive DRM (ubisoft, i'm looking at you), and no replacement if the physical media is damaged or lost.

Steam is far from perfect, but is far superior to the normal retail mess that is the mainstream game market. Hell, they even foster innovation in the independent game market, as they provide indie games exposure when they normally cannot get any reasonable physical distribution or marketing. I've spent far more money on games since the rise of Steam than the entire time before it, and I play far fewer games than before.

Why can't someone do this for Movies and TV shows? The few that do, such as Apple or Amazon, have high prices or annoying restrictions. When a game is released at retail stores, it's released at the same time on Steam. Why do I have to wait a week to see it on the Apple store? Why is one episode worth $2, when the entire season is $20 for 26 episodes?

If I can pirate the Movie or TV show, I bypass all of these annoyances for free. There aren't as many problems pirating video content as the chance of virus infection is greatly reduced, and any DRM methods can be easily bypassed by the 'Scene'. If anything, nasty consumer-level DRM (HDCP) is a foolish waste, as less intrusive DRM methods would prevent casual copying while not punishing those who legitimately attempt to purchase your items.

Fix the release delays, and one-download-only approach, and reduce the price discrepancies. Then you will have a healthy market again.

old news (0)

Anonymous Coward | more than 3 years ago | (#35712606)

This isn't new - this is two weeks old and ARS covered it when the study actually came out.
WTF is up with /. lately?

Load More Comments
Slashdot Login

Need an Account?

Forgot your password?

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>