Digital Piracy - Effects and steps taken to curb it
The innovative improvements that have occurred in the most recent decades have cultivated a critical market for the working and functioning of PC's: the software market. As the industry has developed it has faced some market issues, particularly amongst them piracy, which impacts primarily the organizations or companies that are responsible for the development of this software.
What is piracy to be exact? Well piracy is the unauthorized replication of content which is protected by copyright laws, which is then either sold for a lesser price on the ‘grey’ market or uploaded online on pirate sites which host 1000’s of these kinds of files for free.
The reason ‘piracy’ is always on debate is because the calculated outcome of various reports and papers points to a negative impact, due to piracy, on the economic growth but only up to a certain limit. If on the other hand, losses of an independent company are taken, then the impact is positive up to a certain period.
Why do people become Digital Pirates ?
Companies and firms who produce the games/software often don't realize that piracy as an act is not done for malice but rather due to unfortunate social or economic circumstances such as poverty. Piracy is the only option for a lot of people as they cannot buy expensive games, software or pay to watch a movie thus leading them to the only remaining option of pirating it.
People are not keen on going to pirate sites but are forced to do so due to inconveniences introduced by streaming sites and regional locking of web content. For example, suppose you want to watch Game of Thrones, Breaking Bad and SpongeBob SquarePants at the same time. In order to watch these series, you will need to sign up for Netflix, Amazon Prime and HBO and pay their monthly subscription fee. If you are in certain regions of the world, you still might not be able to watch them due to regional locking even if you are willing and able to pay the hefty subscription fee that these sites demand.
Regional Locking is a class of digital rights management preventing the use of a service, such as multimedia or a hardware device, outside a certain region or territory. As you can imagine, all these factors make people irritated and thus draws them towards the more attractive option of pirating which allows them to view everything on one site from anywhere in the world with the added bonus of paying no subscription fee.
Another major factor that drives people to pirate software/entertainment is the ridiculous price. Some of the games in comparison to averages wages, which was best highlighted by an IT graduate in Bulgaria, who stated:
''Games here cost an obnoxious amount, considering the minimum wage is quite low.''
The national minimum wage in Bulgaria is around €300 which is around $350 per month, and an exciting new game on the release day costs €65 which is around $75 or almost fifth of a monthly salary. Thus, one can see the problem with the pricing of some of these games which further clarified by the same Bulgarian Graduate -
''Tell me, would you buy a game that costs 1/5th of your salary or pay for rent, food, electricity, phone bills?''
The Consumer Price Index (CPI) varies vastly throughout the different regions of the world, meaning that $50 does not have the same value everywhere. In some places, for $50 you could spend a whole month with comforts while in other places you would barely scrape by. So if one was to adjust for CPI and Inflation, then buying a game for $50 in Bulgaria would be equivalent to buying a game worth $400 in the US, which is a massive amount to pay for just a single copy of a game. Thus, as one can see, in some regions games and softwares are just too expensive and so the only alternative that people have to be able to access these games is to pirate them.
Negative Culture around Piracy
Many people believe that students in developing countries engage in digital piracy much more than their developed country counterparts primarily due to the lack of online enforcement imposed by their respective governments, but this is simply not true.
The US has one of the largest numbers of pirates despite having one of the best cybercrime divisions in the world which tries its best to enforce cyber laws and invigilate websites. Thus legal action and enforcement are clearly not enough to discourage people from engaging in Piracy, however this is the exact approach that many of the developing economies have taken and it has proved wildly ineffective.
The governments of these developing countries expected that the students would stop pirating when threatened with legal action however the results were underwhelming. The number of pirates in these countries only went down slightly. This could partly be due to growth of bad cultures which are getting increasingly accepting of Piracy. In some of these countries, Piracy has transformed from a social stigma into a daily activity. Recent studies in developing countries such as India, China, Brazil, and Russia concluded that students aged between 16 to 24 years respond quite positively towards software piracy; most students would keep on pirating even if the government imposed stricter regulations since it lacked the means to enforce it.
Some cases warrant the use of Piracy, for example if someone wanted to watch the original movie blockbuster Titanic, the only way for someone to watch it would be to pirate it as its DVD production has been discontinued and it is not available on streaming sites. However this is only one case. In most cases, piracy is unwarranted and affects the producer/developer/artist in one way or another. The media has taken the stern view that piracy always negatively affects the people involved in the production of the media/software in the form of ‘lost revenue’, however it is much more complicated than that.
Should pirate downloads be considered ‘lost revenue’?
If analyzed on the surface, then it would indeed seem as if the producers of the digital content lose revenue every time someone decides to pirate something instead of buying because essentially what happened is that since they are not compensated for that copy of their work, in tangible terms it could be treated as if they lost a product with a certain market price meaning that they incurred a loss. A lot of producers have stated surprising figures of piracy that they have faced with their software. One of the most popular statistics was, in 2012, when Ubisoft made claims that over 93% of PC gamers are pirates who don't buy the game and often download it illegally which causes the company to lose out around $40 million.
However if analyzed on a deeper level, it is much harder to say if the producer really did lose revenue. Firstly, piracy provides great public exposure to a digital product as people who frequent piracy websites are exposed to the product. This greater exposure could potentially translate to greater sales which may or may not compensate for the ‘lost revenue’. Secondly, the money that a person saves by pirating movies, games, software, etc., is invested in other places. It gets spent on toys, cold drinks, T-shirts, or anything else, the same dollar which was lost by 'Ubisoft' in illegal downloads will be earned by Coca Cola or Polo putting that 'lost revenue' back into the economy.
Now, let us discuss what different stakeholders have done to approach this problem by re-exploring the government’s approach and then looking at the Industry’s approach.
The Government's approach to Piracy
If the government wants to help these industries then they need to come up with a robust legal ecosystem. This ecosystem should include the adoption of optical disc legislation to protect IPR (intellectual property rights) of these industries.
Right now, the punishment dished out to the pirates and people who infringe on others IPR’s is mostly a slap on the wrist as a form of punishment. The legal system has to update and amend its laws to increase fines and levy longer jail times for such acts. Not only the legal system but the corporations also need to raise their voices of concern in unison, only then will this problem be solved.
Talking about India, the Indian government has still not realized that Indian companies are going global and that there is a huge demand for Indian Services abroad. Despite the total outgoing investment from India tipped from last year, the government still treats piracy as a domestic problem. Yes, understandably it is very difficult for the government to manage as the government has many burning priorities other than looking at piracy. The problem comes down to the fact that both the Indian government and the film industry do not have either the motivation or dedication to stop piracy.
The Pirate Bay, one of the most populous sites which had the world's largest file-hosting capability and got an astonishing 90 Billion visits a year, was the place people got their pirated copies of software, movies, games, etc.
Per Year visits to PirateBay.com
It was so well known that every person around the world knew of it and it was frequently regarded as the 'best site to download torrents'. The popularity was its drawback as well though, when governmental agencies got wind of it they wanted to take action and many countries banned the site outright.
In India however, the government was silent on this and took no action to ban or restrict the use of the popular site even though India ranked 3rd from the list of people visiting the site. After various complaints from a multitude of organizations and companies, the Indian government finally took a small stand against piracy and blocked the use of PirateBay in India, from 4 May 2012, under orders of the Department of Telecom (DoT). The block was due to a Madras High Court ruling which finally put an end to the site's access in India. This was the initial documented incident where the government took a firm stand against piracy and took such a step to curb it.
The Industry’s approach to Piracy
Piracy spares no one, it doesn't matter how good you are; if your software is popular then it is likely to get pirated. CD Projekt RED, a game development company that is beloved and praised by its fanbase in the gaming world has become a hero for taking a very unique approach to piracy which is the ''carrot, not stick” approach even after ‘Witcher 3’ was pirated around 40 million times!
The company strongly states that they want gamers to buy their games of free will and not because they don’t have the means to pirate it. The company also made a shocking statement when it said that it won't really mind if the game is copied and pirated. They have a firm belief that gamers will eventually come to love the platform so much that they would want to pay for it and not pirate it, and it's been working marvelously for the company.
Microsoft also adopted a similar approach in March 2015 when they announced they would be giving out Windows 10 free to everyone, regardless of the legitimacy of their Windows, i.e even if you had a pirated Windows. This was a shocking announcement considering India, China and Russia had around 65% illegitimate copies of Microsoft running on their computers throughout the country and the sales of these 3 combined together were less than that of the US. Everyone knew how in demand pirated copies of Microsoft were in these countries including Bill Gates but there was not a solution up till now.
On the question of sales, Bill Gates the co-founder of Microsoft said in an interview -
“Around 3 million computers are sold every year only in China, yet people who buy these computers often don’t pay for the software that helps run the system, this software includes; Microsoft Windows, Microsoft Office, and many other essential tools.’’
When asked how he would tackle piracy in these growing economies, Bill gates answered -
''As long as they are going to steal it, we want them to steal our software, they’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.''
This strategy is a very unique way of tackling the piracy problem which has not been seen before but appears to be working slowly but steadily. This outstanding move shows us that Microsoft being one of the biggest software companies recognizes piracy and has come up with its way to deal with it as it knows the traditional methods just will not work.
Final thoughts
When the Pirate Bay was finally banned, companies for a while thought that they had finally beaten digital piracy and were taking concrete steps to curb the spread of piracy, but statistics showed otherwise. Pirate Bay proxies started showing up everywhere around the world and since the banning of Pirate Bay was all over the news, more people were visiting these proxies and downloading illegal content than before.
Convenience plays a big role in a person's decision-making, so the decisions that introduce a greater degree of convenience are usually preferred over the less convenient options. This is why so many people choose to pirate, because it is just so convenient for them! If they were to watch a movie through formal channels, then they would have to create an account, pay a certain fee, and only then gain access to watch the movie. But if they wanted to pirate it, all they had to do is click the download/torrent button.
The reality of piracy is quite different compared to how people perceive it. There is a huge demand for streaming services and gaming platforms but the companies competing against themselves have put off many potential consumers. The same is with the gaming industry, Companies charging $50 for a game is just not justifiable for the majority of the gamers as they can't afford to pay for it.
The statistics clearly show that companies competing against piracy will end up losing in the long-term battle if they don't come up with something unique and if they fail to adapt like Microsoft or CD Red did.
In today's society, anyone from anywhere can pirate a software or game, regardless of their gender, age group or income status and this poses a great danger over the coming ‘technological age’ if nothing is done to stop this contagious spread of piracy.
Nice info
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