Sunday, April 29, 2007

Is piracy BAD?


Here in China, piracy is rife. IP piracy, that is. Particularly DVD piracy. In fact, you hardly ever see a legitimate DVD anywhere, and they are so ridiculously expensive that I can't imagine anybody ever buys one.

I don't have too many moral qualms about taking advantage of this. I am too much of a film-lover to pass up the opportunity to build a library of classics (I had nearly 600 titles the last time I bothered to try to count them, and have inherited quite a few more from departing friends since then), whatever the legal or ethical implications.

And, frankly, I am not too concerned about 'stealing' from the Hollywood studios. Those guys are mega-rich and mega-greedy, and I don't see them going out of business because of me. I suppose I adopt the same kind of argument I did with that 'Home Taping Is Killing Live Music' campaign of a decade or two ago. Patently bogus logic! Home taping, for most people, was an addition to purchasing music (and attending concerts), not a substitute for it. By sharing music with friends, we were actually helping to increase demand for the product in stores; people got to know about stuff that they otherwise wouldn't have, and would occasionally want to go out and buy it. But, for most of us, we couldn't possibly afford to pay for all the music we wanted to listen to. It was unrealistic of the record companies to presume to control all dissemination of their material, unreasonably greedy of them to view every instance of home taping as a loss of income to them.

Of course, things have got a lot more complicated with the explosion of online streaming. Record companies are now facing a situation where they struggle to control any of the dissemination of their material, and might soon see their income dry up almost completely, unless subscription downloads can be made into an effective business model. Well, I wouldn't be shedding too many tears if the record companies go under. I'm not sure that we need an 'industry' around popular music. Good bands will always be able to make a decent living by playing live gigs. Their creativity might even flower brighter and for longer, they might avoid burnout and craziness if they weren't doomed to become multi-millionaires. You know, they might actually focus more on the music, rather than the 'rock'n'roll lifestyle'.

The music industry depends almost solely on mass reproduction of its product, so the new technology has left it up shit creek. The film industry does not depend on mass reproduction. Until 30 years ago there was no market for individual home consumption of films. For a few decades the film industry was spoiled by having this additional revenue stream open up for it. Those days may be coming to a close. Get over it. The major sources of income for the film industry have always been, and should remain: cinema screenings (there really is no substitute for the live experience of a big-screen film), TV rights, and merchandising (these days, often the biggest earner of them all). And the studios may be able to develop some subscription download revenue as a replacement for the moribund video/DVD arm of their business.

If the film companies really wanted to establish a market for legitimate DVDs in China, they'd have to get aggressive in their marketing; they'd have to be prepared to sell close to or a little below cost for a while, to drive the pirates off the streets. Pirate DVDs are often flawed (I find there's usually about a 20%-30% failure rate, even from the better stores), rarely have all, or any, of the 'special features', and sometimes don't even have proper subtitles. I'd be prepared to spend, say, 50% or so more for a legitimate DVD that I could be confident was fully functional. But, at present, they cost 3 or 4 times as much as the pirated product, so there's no competition.

Do the film companies really care about the piracy in China? I don't think so. They could lobby against it with the Chinese government much harder if they wanted to. They could fight against it much harder in the marketplace if they wanted to. I think they have greater concerns here at the moment: the relatively small cinema market in China (growing, but still pretty tiny; despite the vaunted economic growth, few people have any disposable income to speak of, and the cinema is still a very expensive night out), and the very limited access to that market granted to foreign films (the numbers go up year by year, but it's still a pretty tight quota - and, of course, only 'approved' films; i.e., pappy blockbusters).

DVD piracy can't really be said to be hurting the film companies at the moment in China, because there simply is no market for legitimate DVDs - no-one can afford them. At least the cheap pirate copies are building the Hollywood brands (people who've never been to a cinema in their lives know who Tom Cruise and Julia Roberts are from seeing them in pirated DVDs; don't tell me the film companies are unhappy about that), adding to the groundswell of demand for more foreign films to be shown in cinemas and on TV. And they support the market for merchandising as well. McDonald's tie-ins for films like 'Finding Nemo' have been hugely successful here. Hardly anyone saw those films in the cinema; they saw them on pirate DVDs.

So, the next time you hear somebody whingeing about how hard done by the film studios are, and how immoral and irresponsible it is of you to buy pirate DVDs, just tell them to FUCK OFF. Film studios get plenty of money from bums on seats. They get plenty of money from T-shirts and toys. They shouldn't expect to be able to also milk us when we want to watch a film again at home afterwards.


tulsa said...

Did you know it was World Intellectual Property Rights Day last Thursday? Is that what prompted this post or was it just coincidence?

Froog said...

No, that one passed me by. Pure coincidence.

Is that like Beijing's monthly 'Stand In A Line' Day? Everybody's going to try to respect intellectual property rights for one day in the year, just to try and get the hang of it?!

Tulsa said...

LOL, yeah, probably so. Though, I think the "Respect IP" days around here (beijing) correspond more to visiting IP officials then to any particular day of the year.

I can usually tell someone IP related is in town when I notice the disappearance of all the sidewalk DVD vendors.

But, as you know, piracy is not unique to Beijing. I watched a pirated bollywood film last night on VCR!! I didn't know anyone still made VCR movies! I grew up watching pirated bollywood videotapes, but in recent years everything has switched over to DVD. So last night was surreal.

The British Cowboy said...


You know I generally am on the same page with you on most things, but come on. You want to buy pirated stuff or pirate it yourself, fine, but lets be honest that it is theft. It may be theft from a not particularly sympathetic victim, but it is theft.

I don't buy the whole rationalization of music piracy that it was actually creating a bigger market. That would imply that the recording studios were incredibly stupid, and tried to stamp out something that was benefitting them.

Even if that were the case, it is still theft. It's taking the property of an artist/recording studio, after they have chosen the fashion in which they wish it to be available. Even if it is benefitting them, they have stated they don't want to be benefitted in that way.

In interest of full disclosure I should mention a significant proportion of my firms billing comes from IP matters.

Froog said...

Cowboy, fancy seeing you here. I didn't think you came over 'this side'!

Actually, I think the recording companies (and the film studios) probably were incredibly stupid and/or incredibly greedy. There was no way to prevent home taping, so it was fatuous to try. There is really no way to determine whether record/CD sales would have improved in an 'ideal' environment where there was no home taping, but my hunch is that any such improvement would only have been fairly small. The only possible justification I can see for all those 'stamp out home taping' campaigns is a tactical one; by complaining so vociferously about how this activity was undermining their revenues, maybe the record companies were building a case for a share of revenue from blank tape sales.

I think my experience of home taping was probably fairly typical. It was mainly copying albums I already owned to play in the car or on a Walkman. There were also quite a few 'party mix' tapes, again of stuff that I already owned on vinyl; these would often include isolated tracks I'd borrowed from friends, where I was never likely to purchase the whole album myself just for one or two songs (but at least, in all cases the copying was being done from a legitimately purchased original). And occasionally, I would swap 'samplers' of new albums with friends; almost invariably, if I liked the music, I'd end up buying the album myself. Tape was such an inferior medium of reproduction, that I almost NEVER accepted a tape as a substitute for an album, only as an occasionally more convenient alternative. In my own case, I'm quite sure that the practice of sharing home-taped music with my friends actually led to me spending more in record stores than I probably otherwise would have done.

I really think the film studios are probably not too bothered about DVD piracy in China. There is almost no legitimate market here as yet, and their access is limited; the 'black market' provides their only exposure to the Chinese audience at the moment, and exposure - building brand awareness - is more important than revenue in these early days of penetrating a new territory. Pirating of designer label clothes is much more of a problem.

I was reminded of that prayer that goes something like: "Give me the patience to endure the things I cannot change, the courage to strive to change those things I can, and the wisdom to know the difference." These days, it is practically impossible to control the dissemination of digital content via the Internet, so the creative industries would do better to focus on maximizing their revenue from the channels of distribution they can control, rather than huffing and puffing about the ones they can't.

If I stand downwind of your cigar, am I 'stealing' your smoke from you?

Tulsa said...

Hello Cowboy,

I agree with Froog on the following:

a. dvd/software piracy in China is too big to control. pirated dvd/software goes for 10 kuai here, whereas the originals cost 200 kuai for a movie and upwards of 2000 kuai for software... in a society where the average city income is 4000 kuai a month and average rural income is 800 kuai a month, there is almost no market in China for original copies.

b. black market luxury items is a problem that is receiving greater attention and has a higher chance of being stamped out. Not only does the government go after black market luxury items (designer labels) but those most likely to buy a luxury item are less likely to purchase black market labels because if the fake status of their Prada bag were revealed, it would be a huge loss of face and defeat the whole point of buying luxury goods. The wealthy class (still a small portion of the society) here is extremely wealthy. And they are happy and eager to show it (see Froog's posts on Car purchasing - better to buy a car than a big screen TV because the neighbor can see the Car, but never will see the TV).

It would be interesting to see how Bollywood has dealt with this problem. I understand that pirated Bollywood is hard to find in India, though they are readily available across the border. If Bollywood companies have been successful in stamping out piracy in-country, what has stopped them from the same across the border? Has an effort even been made? Cowboy, do you know anything about IP and the Indian entertainment industry?

The British Cowboy said...

While I can certainly agree that the problem might be impossible to control, my main issue is with the attempted rationalization of what is, in fact, theft.

I have little issue with it, to be honest. The music companies are nasty and bad and evil. I just got so tired in the whole Napster debate of people trying to create arguments as to why what they were doing was not theft.

As for "stealing" cigar smoke by standing downwind, that isn't theft. I haven't attempted to restrict consumption of that, nor do I have a legal right to do that.

Froog said...

Although the moral justification for concepts of 'intellectual property' is trying to provide just rewards for creative endeavour, and thus continued incentives for such endeavour, the actual legal basis of the notion of 'property' of any kind is CONTROL. If you have no practical means of control over your 'property', then, arguably, it ain't your property any more.

I get fed up of music and film companies trying to base their arguments against piracy on the idea that EVERY experience of their product should be a source of revenue for them - or that every FREE experience of it is somehow a loss of revenue for them. It's just bollocks.

In the context of these Information Superhighway times, the cigar smoke analogy isn't too far off. If I really like it that much, and I can afford it, I'll buy a fucking cigar for myself. If I'm happy enough just indulging in an inferior version of the experience for free, what can the cigar-makers do to stop me? Will they whine and whinge that every 'passive smoker' is robbing them of revenue?

The smoke is the key element (or one of them) of enjoyment that their business is based on, but 'secondary smoke' is completely outside of their practical control. Can they reasonably assert any claim to ownership to it or right to income from the enjoyment of it?

But even cigar smoke is still a fairly 'physical' commodity. There are special problems with IP - if I buy a piece of original creation from someone, on what basis do they still seek to control what I can then do with it? The notion of copyright evolved to prevent unjust commercial exploitation of others' creative efforts, not to prevent small-scale copying and sharing between private individuals. Now that such copying and sharing has become possible on a mass scale, this is raising fascinating new problems for the creative industries and for the law.

I think film and music companies need to concentrate on maximizing the value they give and get from, if you like, the "first point of contact", the initial delivery to the public - quality of copy, exclusive additional features, the special impact of the 'live' experience (whether that be a rock concert, seeing a film in the cinema, or a 'first-run' TV showing ).... and give up on the idea that they can either stop or exploit as an additional source of income the sharing of inferior subsequent copies (principally these days through file-sharing over the Internet; black market copying is just an offshoot of this, and one that is likely to wither away as more people acquire the technical know-how to do it for themselves).

To just say "it's theft" is sidestepping the philosphical and practical issues here. On what basis do we decide what "property" and "theft" are? Didn't dear old Karl Marx say that "Property IS theft"?

'Intellectual property' is, I think, more than almost any other area of law, not a matter of objective right or wrong but a matter of mere practicality - how can we best secure a reasonable income for creative individuals within a given environment? Where the environment changes, the concepts of 'intellectual property' have to change too.

Keir said...

It's selfish attitudes like the ones expressed in this article that explain why Britney Spears hasn't had a hit in years. Don't you people realise that without the money coming in, such stars will not be able to invest the money into producing the unique, provocative and cutting-edge sounds that propel our culture, or why we haven't been able to have follow ups to epics like Pearl Harbour?

Froog said...

Ah, the ironic argument in favour of more piracy. I missed that one! Thank you, Keir - whoever you are.

I'm sure Britney can keep the money rolling in with a soft-porn subscription website.

Michael Bay..... deserves to wind up in a gutter begging for pennies.

John said...

Piracy to me has always been about nobody getting any money. As soon as someone is getting, albeit not much, money by selling you an illegal and therefore inferior product that's just barmy; it was with amusement then that I read you referred to buying pirated DVDs at "stores". Download things from the Internet and you'll more than likely find they come with a .nfo file. Read these with suitable viewing software and I can guarantee each will berate you you if you paid for whatever the file happens to be. OK so China has lousy download speeds but at such a high failure rate I'd be loathed to hand over cash to some muppet with a disc burner and an eDonkey client.

Froog said...

Well, we're 5 or 6 years on here. The quality and variety of streams available, the professionalism of the DVD burning operations, and the move from DVD5 to DVD9 format have much improved things. Failure rate on the pirate stuff is now close to zero, and at least some of the extras usually work. But they are twice the price they were back then. Swings and roundabouts.

I know some people who swear by downloading films from the Net. They are mostly people who have very good, fast connections at work that they can abuse, or people who can use their home connection all day while they're out at work.

As someone who works mostly at home and is using the computer constantly, I just can't tie up my bandwidth like that.

It's pretty fucking antisocial too, because basically everyone within an apartment block/street/district is sharing bandwidth. I used to have ridiculous connection speed problems at an apartment a few years ago, until the guys down in the basement who were pirating movies got busted. (Well, not imprisoned; just told to move their operation somewhere a bit more discreet, I heard. They were the guys who used to the local intranet for the building; but everybody had stopped using that because it was so unreliable and no longer cost-competitive with the phone company's service. So, they were just running it for their own profit. But, of course, their connection to the main network was the same as everyone else's, and when they started tying up that much bandwidth, everything ground to a halt.)

With the kind of connection speeds I have, it is just not feasible to download movies. It can take hours, even days. And the transfer is always liable to break down in the middle. And you'll probably end up with a very glitchy copy. And you certainly won't be able to manage more than one or two a day, during which time your computer is useless for anything else.

Also, I kind of like having a physical library to leaf through in deciding what I might want to watch. Just scrolling through menus on a screen isn't the same.

Is it worth paying £1.50 or £2 for a DVD that I can just pop in and play whenever I like, rather than having to go through the hugely laborious rigmarole of trying to find stuff online, download it, store it on an external hard drive, check it for quality, and then figure out how to hook it up to my TV?

You betcha. Actually, I'd probably pay 5 or 10 times that much. DVDs are still ridiculously cheap here. They haven't been as badly hit by inflation as most other daily essentials.