Other Side of the Debate - Digital Piracy

Is piracy really causing problems for the programming/entertainment industries?

• Russian teacher fined for MS piracy [1]

• When Piracy Becomes Promotion [2]

"The underground subtitling and circulation of Japanese anime helped to open the American market to Asian cultural imports."

"The global sales of Japanese animation and character goods, an astonishing 9 trillion yen ($80 billion) has grown to 10 times what it was a decade ago."

"The Cartoon Network features a wide array of anime series as part of its late night Adult Swim programming. ADV Films, a major importer of anime series for the American market, has launched a 24 hours Anime Network. TOKYOPOP, a Los Angeles-based company, will publish 400 volumes of translated manga (Japanese comics) for U.S. consumption this year. One can find whole shelves of manga in many Barnes and Noble or Borders bookstores, where they frequently outsell American-produced graphic novels."

"The clubs, such as the MIT Anime Club, functioned as lending libraries and dubbing centers as well as holding marathon screenings to attract new members."

"Japanese distributors winked at these screenings. They didnt have permission from their mother companies to charge these fans or provide the material but they were interested to see how much interest the shows attracted."

"Many U.S. media companies might have regarded all of this underground circulation as piracy and shut it down before it reached critical mass. The Japanese media companys tolerance of these fan efforts is consistent with their similar treatment of fan communities in their local market. As Temple University law professor Salil K. Mehra notes, the underground sale of fan-made manga, often highly derivative of the commercial product, occurs on a massive scale in Japan, with some comics markets attracting 150,000 visitors per day; such markets are held almost every week in some parts of the country. Rarely taking legal action, the commercial producers sponsor such events, using them to publicize their releases, to recruit potential new talent, and to monitor shifts in audience tastes. In any case, they fear the wrath of their consumers if they took action against such a well-entrenched cultural practice and the Japanese legal structure would provide for fairly small legal penalties if they did pursue infringers."

"More generally, as Yuichi Washida, a research director at Hakuhodo, Japans second largest advertising and marketing firm, has argued, Japanese corporations have sought to collaborate with fan clubs, subcultures, and other consumption communities, seeing them as important allies in developing compelling new content or broadening markets. In courting such fans, the companies helped to construct a moral economy that aligned their interests in reaching a market with the American fans desires to access more content."

Piracy in developing countries

Piracy is no doubt a huge problem overseas. Although most countries have anti-piracy legislation in place, the enforcement of these laws are not up to par with global standards. Especially in developing countries where local governments have no incentives of protecting foreign intellectual property, whole industries have been built around the concept of illegally duplicating and distributing media for individual gains. The Motion Pictures industry in 2005 claimed that there were "more than 34,000 cases of piracy and assisted law enforcement officials in conducting more than 10,500 raids. These activities resulted in the seizure of more than 34 million illegal optical discs, 55 factory optical disc production lines and 3,362 optical disc burners, as well as the initiation of more than 8,000 legal actions." [3] Despite these proactive measures, MPA still projected a sum total of more than one billion dollars in lost potential revenue for 2005 in the Asia-Pacific region alone.

While the entertainment industry frantically tries to control piracy overseas, software businesses have a lighter view on this issue. Although software piracy is no better compared to media piracy abroad, there is less concern from the corporate side. In these developing countries, the biggest competitors for legitimate software companies are open source organizations. Since, software engineers are vying to attract a larger portion of the new population to use their product, strategists have have concluded piracy may actually help companies defeat the open source movement. Take the software giant Microsoft for example. It "acknowledges that piracy sometimes helps the company establish itself in emerging markets and fend off threats from free open-source programs." [4] In countries like China and India, even though a huge portion of the population operates on counterfeit versions of Windows and unactivated versions of Office, at the end of the day they are still using Microsoft made products. If the strategy to empower both the legitimate and illegitimate user base works out as planned, when a country's economy matures in the long run, the majority of the population will be more willing to buy Microsoft's genuine software. Just look at Vietnam, "which at more than 90% has the highest piracy rate in the world, has improved from 100% in 1994. The No. 1 software firm in Vietnam: Microsoft." [5]

The debate about whether or not severe anti-piracy measures are necessary in developing countries is an hot issue, for there are good supporting arguments for both parties. The value of a piece of software varies directly with the size of its user base. Without a substantial base of users, software products cannot survive. In these developing countries where the majority of the population cannot afford many of life's luxuries, asking them to dump several hundred dollars for a copy of Windows Vista is ridiculous. But, for every pirated of Vista bought Microsoft is loosing potential revenue. So, the final question to be asked is -- constituents a potential sale?

• Romanian President to Gates: Windows Piracy Built This Country [6]