i-think Twenty-Two

Recently, Scott Adams^[1] has begun to raise the issue of online piracy, and generally seems to be against piracy^[2]. Here at The Mill we think that’s a fair stance to take.

Here’s why. Intellectual Property is a funny thing. Not funny ha-ha, but funny in the sense that it’s hard for people to think of ownership over an idea. This problem comes from the ease at which an idea can be transferred much more quickly, through duplication. The creator of the idea hasn’t lost the idea, they still have it, but suddenly they have a competitor that has had no initial production costs, only duplication costs, which are extremely low thanks to the internet and the ease at which digital copies can be made.

That’s not to say we should reduce the ease at which digital copies can be made, or shut down the internet. Let’s say there are two stores next to each other. One sells pirated material and the other sells licensed material, with a portion of the profits going to the original artist. The shop that sells pirated material is able to sell it at a lower cost because their costs per copy are so low. In this case the products are identical. If there was no laws against piracy, the pirated store would clearly be in a better position. Only consumers that are genuinely concerned about the original artist, or who are frightened of pirates are likely to purchase the legitimate copy. Little or no profit makes it back to the artist, so they stop producing the material and get a boring desk job. Pretty soon, it becomes apparent that there is no money in the industry and therefore everything shuts down.

Before attacking this scenario, I admit that I have assumed that the only source of income for the artist is through the sales, which isn’t necessarily always the case, but that doesn’t mean that we can say that the artist isn’t entitled to this source of income. It’s also not supposed to be a real scenario, but simply a tool to show the extreme case of piracy and how it can clearly be detrimental to the original artist.

Some say that licensed material is overpriced. However the price is set by the market and competition needs to come from other artists, not from someone who has no initial production costs. Some would say that the prices are fixed and that collusion between production companies is keeping the price of this material high. It doesn’t change the fact that if you want the material, you need to pay the asking price.Let’s look at this from a different angle. DVDs have compulsory copyright screens and ads that can’t always be skipped to get to the content. As someone who has paid to watch the content, this can get frustrating, especially when the copyright messages are then shown in about a dozen languages. Pirated DVDs are not forced to have these screens. Suddenly pirates are able to produce what is to the end-consumer a better product than that able to be purchased legitimately. As Scott Adams has commented, it is impossible to compete with something that’s free. Surely it must be harder to compete with something that is free and less annoying.

The Internet has torn down the traditional national borders for information. In this context, pirates operate without competition from the original artist. A consumer, eager to see the artist’s latest work may not be able to access it within their country legally, so instead seek out pirates, more than willing to provide the service. In this case, a market exists which is being ignored. Prior to the internet, distributing media worldwide would be costly and stock would often sit in an inventory unsold. With the internet and broadband capabilities, it is now possible to set up a world-wide store without the costs that have been involved previously.

Maybe the author of the original material should have the right to make people in different geographic regions wait. Perhaps this discrimination is okay. However, people are impatient and they will seek out alternatives if they feel they have to.

Whilst I don’t think it should be necessary to compete with pirates on price, it makes business sense to at least compete with them on product functionality and geographic availability. People will continue to get material from pirates, but at least you’ll provide consumers and opportunity to do the right thing, while quenching their information lust.

1. creator of Dilbert [back ↩]
2. • Is Copyright Violation Stealing?
   • Find the Cognitive Dissonance
   • The Infamous Underpants Analogy

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