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Piracy In Developing Countries Driven By High Prices 235

Posted by Soulskill
from the hmm-how-can-we-blame-the-terrists-for-that dept.
langelgjm writes "The Social Science Research Council, an independent, non-profit organization, today released a major report on music, film and software piracy in developing economies. It's a product of three years of work, and the authors conclude that piracy is primarily driven by excessively high prices and that anti-piracy education and enforcement efforts have failed. Still, chief editor Joe Karaganis believes that businesses can survive in these high piracy environments. The report is free to readers in low-income countries, but behind a paywall for certain high-income countries, although the SSRC notes, 'For those who must have it for free anyway, you probably know where to look.'"
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Piracy In Developing Countries Driven By High Prices

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  • Well no shit (Score:5, Informative)

    by Anonymous Coward on Monday March 07, 2011 @02:47PM (#35408918)
    The average person in Cambodia earns one dollar a day. Some kids collect scrape metal and if they collect $0.25 worth of them, they can go to school the next day (they are not only happy about it, but work to get to school!). Do you really think they're going to spend it on entertainment than costs more than they make in a month?

    I was visiting there last year and unsurprisingly they did have stores with pirated goods. The largest mall in Phnom Penh has full floor of tv shows, movies, games, applications, everything you can think of. Games and movies cost $1-2 while all seasons of The Simpsons cost $10, all neatly packed and everything. The other series with less dvd's cost even less of course, and this was inside a big mall and they probably added some extra to the price since I was foreigner (they didn't list prices but you had to ask). Maybe you can get them even cheaper from street vendors.

    And while speaking of Cambodia, it's quite nice place to visit, not your usual holiday place. Even in the cities some of the streets are just sand and when you go out all the tuk tuk drivers come asking you where you want to go. If you want to go for a few beers and a pizza, the driver takes you there and waits for you while you do your stuff and drink beer, even if it takes long time. Then you just give them like $5 for being your driver the whole night, and they're happy since they're still getting a lot more than people usually. That's why there isn't any shortage of tuk tuk drivers either. And yeah, girl bars (or ladyboy bars if you prefer that) are open 24/7 and there's happy pizzas with special ingredient ;-)
    • Re:Well no shit (Score:4, Insightful)

      by WrongSizeGlass (838941) on Monday March 07, 2011 @02:59PM (#35409096)
      So it isn't necessarily 'high prices' but prices that prices aren't adjusted to the developing country's standard of living?
      • Totally Unavailable (Score:4, Interesting)

        by ProfessionalCookie (673314) on Monday March 07, 2011 @03:53PM (#35410006) Journal
        I live in Pemba, Mozambique where there is no place to buy legitimate DVDs. It doesn't exist.

        The DVDs you can buy are cheap chinese rips on a disc in shrinkwrap with cardboard that advertises 24 MOVIES DVD9 BLURAY MPEG4 XVID H264. Really they're just highly compressed low resolution MPEG2 streams. There's typically 4 movies on a disk divided into 6 or so parts labeled a, b, c, d, etc.

        I Don't buy movies here because there's no supply chain. I do buy on iTunes which permits me because I have a US credit card.

        • by Kenja (541830)
          You seem to be online. I bet if you really search you can find a place that sells DVDs on the Internet. Just sayin'.
      • by Idbar (1034346)
        In addition to it, these developing countries try to protect their local market and charge additional taxes for imports at their customs.

        This list [wikipedia.org] shows United States nearly at the high end of the minimum wages list, consequently its citizens have higher acquisition capacity than any other in developing countries, yet prices come not only the same but sometimes higher to those countries. A simple wii game for example (although not first need) comes at US$100 (or higher) in certain countries where minimum
      • by Tablizer (95088) on Monday March 07, 2011 @04:57PM (#35410880) Homepage Journal

        Having discount prices for 3rd-world countries can create a double standard when it comes to labor outsourcing. We have to compete with 3rd-world labor at their labor rates, not ours, yet they want discounts on software. You can't have it both ways, otherwise we are giving our jobs away as a charity.

        If they have local adjustments for prices, then we should get local adjustments on wages because our housing and medical costs are far higher than theirs.

        • Re: (Score:2, Insightful)

          by mobby_6kl (668092)

          What the fuck are you talking about. They (the "third world") get paid by their local standards, and thus can't afford to drop 60 bucks for an xbox game worth a few hours of entertainment. Your post makes no sense at all.

    • by brit74 (831798)
      The average person in Cambodia earns one dollar a day. Some kids collect scrape metal and if they collect $0.25 worth of them, they can go to school the next day (they are not only happy about it, but work to get to school!). Do you really think they're going to spend it on entertainment than costs more than they make in a month?

      It's true that prices have to be adjusted to the local economy. And, that does raise some problems when you're selling for cheap in third-world countries, since it creates an in
      • How does one adjust their prices to the local economy level if that would result selling the product at a loss? I assume you simply can't do it and that's why the void is then filled by piracy?
        • by mobby_6kl (668092)

          Obviously one doesn't for products with high margin cost of production. You can't just start selling LCD TVs for $20 because that's how much Chinese peasants could afford to spend. But for the stuff we're talking about here -- games, movies, music -- it's definitely possible, because the price of producing one more copy of a game is so low. As the pirates are demonstrating, you can go very very low here.

          I think the reason that the content companies don't do that is either lazyness, unwillingness to look lik

  • LOL (Score:5, Insightful)

    by hjf (703092) on Monday March 07, 2011 @02:55PM (#35409030) Homepage

    NO SHIT? Someone has been reading my posts on slashdot? THIS is what I've been saying for YEARS, good God! Just look at my rant posts, I must have said that about 5 times at least.

    I'm NOT paying half my monthly salary for a PS3 or XBOX game. Same way as I'm not paying $10-$20 for a movie ticket. That's why movie tickets in my country cost $3-$5 and people go to the movies, while very few don't pirate games. Charge me something I can pay, and I gladly will. Be a jerk and try to charge me twice or 4x as much as the US price and I won't buy it (PS3/XBOX 360 cost USD 800 here. Taxes are not the reason). For me a $100 game is like expecting the average american to pay $500 for a PS3 game. Ain't gonna happen.

    • by cforciea (1926392)
      In the city where I grew up here in the US, you can still see movies in a mainstream theater for like $5 at night and $3-$4 for a matinee. It sounds like you are getting ripped off for your movies, as well.
      • by hjf (703092)

        Those are Thursday-Sunday prices. Monday-Wednesday is $1,50 or so -- last time I checked. $5 even includes 3D glasses for 3D movies.

      • by anyGould (1295481)

        Count yourself lucky - the "cheap theaters" have been ruthlessly squeezed out of my town over the years - I think the cheapest I can get into a movie now is $5, and that's if I drive out of town to the place they reno'ed from an old supermarket.

        Of course, it doesn't help that the average home theater systems are more than sufficient for all but the latest special effects blockbuster.

        • by green1 (322787)

          The "cheap theatre" here has shows for $5, but they only get movies about the same time they appear on DVD, additionally the theatre is pretty much falling apart, you have to pick your seat carefully, and many of their screens have tears in them...

          To go to a real theatre and see first run shows, the price is $12-$15...

    • by poetmatt (793785)

      Dont' feel bad, even the us prices are fucking outrageous. No video game is worth more than $20, absolute ceiling, even with inflation. Plenty of publishers have been very successful doing this because everyone buys their games. It's just old dumbass publishers who charge high and expect people to pay it.

    • by Wiarumas (919682)
      You don't even need to look at different countries as a sample study. I grew up in Pittsburgh, Pennsylvania where movies were 7 USD and you could choose any seat you wanted in the theatre since that few of people went. I moved to an affluent suburb of Washington DC where the cost of living was 30% higher and the average family income was 300% higher and the movies were consistently packed. I'd also throw in a tidbit about quality of the movie theatres too - the ones in DC were nice because they made enou
      • by jlechem (613317)
        This is so true. In Utah we used to have a wide variety of local theaters. They slowly closed as the megapexes came in. But you know what, I like a nice clean megaplex with nice seats. I refuse to go to some run down shit hole. Brewvies is the only exception here and that's because they serve beer. So yeah tickets cost 7.75 but it's worth it for some quality and cleanliness.
  • Wait, we're a low income country?!?

    Or are they just being nice to Canada?

    Yo Grark

    • by anyGould (1295481)
      I was wondering about that myself - big reason why I snagged a (free) copy was to see if they explain why. Of course, I'll probably see it used as "proof" that Canada is a haven for piracy or some such nonsense next week...
      • by Tragek (772040)

        I'm curious, did you come to a conclusion? I'd download it myself, but we seem to have overrun their goodwill for the moment.

        • by anyGould (1295481)
          Haven't finished it yet (it's 400+ pages long!) There's a Canadian institute on the funding page, so it might be as simple as "we already paid for it".
    • by Mashiki (184564)

      Depending on where you live in Canada, yes we are actually low-income especially when you figure that between 30-52% of your wages are gone in taxes. On the EC this is very apparent especially with the lack of any solid industry of any kind. In Ontario/Quebec it's hit or miss. Out west less so, but the cost of goods is unbelievably high(whooo $4/loaf of bread, $9-15 for a gallon of milk). You're looking at somewhere between 42k and 52k as the median wage. And 25% of our population lives at or below th

  • US$8 for non-commercial use in high-income countries—a list that for the present purposes includes the USA, Western Europe, Japan, Australia, Israel, Singapore, and several of the Persian Gulf States (Kuwait, Qatar, the United Arab Emirates, Brunei, and Bahrain), but not Canada.

    I don't understand why Canada merits special favor, when her per-capita income is higher than most of Western Europe, Japan, Israel, and Japan. [wikipedia.org]

    • I don't understand why Canada merits special favor...

      I don't know, but perhaps it is the license:

      Media Piracy in Emerging Economies is distributed under a Consumer’s Dilemma license, which shifts the developing-world consumer’s dilemma onto other geographies and income brackets.

      Either that or it's a tool to measure piracy: who will pay vs who will spoof being from Canada.

      For those who must have it for free anyway, you probably know where to look.

    • by Methuseus (468642)

      Japan, Israel, and Japan?

      That's amazing!

    • by green1 (322787)

      Per-capita income is only one side of the coin, what about per-capita expenses?

      Our dollar is worth more than the US Dollar, but when every product costs significantly more than it does in the US, it doesn't make us feel "rich"... (not to mention the significantly higher taxes we pay)

  • by aBaldrich (1692238) on Monday March 07, 2011 @03:05PM (#35409196)
    In developing countries the average cost of life is lower, but the average income is much lower. Where I live, Windows plus Office costs 2-3 average salaries. How can they seriously expect anyone to pay?
    Even those who can afford it find it morally unacceptable to waste so much money on software. You can get it for free and donate the money.
  • ...nothing will ever beat the price of FREE.

    • by hjf (703092)

      That's not true. I have a comic book shop. My customers usually read the comic (mostly japanese manga) online and several months later, when it's finally released here, they buy it. And they're not exactly cheap either!

    • Wrong. The price of free is too often beat by the prices of "I am used to this" and "I am afraid to learn new stuff". That's why people who would be perfectly served by Free software cling to Windows and MS-Office nonetheless.

    • by anyGould (1295481)
      ... but people have and will pay what they perceive as "fair value" for things. That's how so many small-scale productions stay afloat.
  • by rwv (1636355) on Monday March 07, 2011 @03:06PM (#35409232) Homepage Journal
    I like how the report is available for free to "Low Income Countries" like Canada.
  • They needed three years to reach this conclusion? The purchasing power parity of the dollar to the rupee is about 10:1. Meaning 10 rupees in India is around 1 USD in terms of what one can buy with it. If you charge me the same USD value (multiply by 45) in India, you're bloody insane if you think I'm going to shell out that much!

    I remember seeing a store selling a copy of Windows Vista for Rs. 14,000. That's like asking the average american to pay $1,400. Any takers? Didn't think so.
    • by langelgjm (860756)
      To be fair, the report has much more than just the info about prices... I just had to condense something down for the summary. There's also a lot of information about the effectiveness (or lack thereof) of the various IP and anti-piracy "education" (propaganda) attempts, empirical data on the failure of enforcement activities to make any dent in piracy, and findings about what does in fact drive prices down to more affordable levels (competition from domestic creative industries). There are six detailed cou
  • by The MAZZTer (911996) <<megazzt> <at> <gmail.com>> on Monday March 07, 2011 @03:08PM (#35409268) Homepage
    Valve discovered that if they release more translations of a game on the day of release instead of delaying for a few months, piracy drops and legit purchases go up. Turns out game crackers translate the games too.
    • Valve discovered that if they release more translations of a game on the day of release instead of delaying for a few months, piracy drops and legit purchases go up. Turns out game crackers translate the games too.

      In certain countries (Thailand comes to mind) it is common for local movies to be released on DVD without English subtitles to "protect" the local studio's ability to license the movie for foreign distribution. Unfortunately the net result seems to be that a lot of interesting movies never get an english-friendly release. So some people have taken to doing the subtitles themselves (sort of like anime subbers but without all the drama).

  • missed the point (Score:5, Insightful)

    by bugi (8479) on Monday March 07, 2011 @03:16PM (#35409400)

    The point is to generate high piracy rates, in order to generate the PR necessary to give pet legislators an excuse to do their "friends" a favor by passing yet more draconian legislation, allowing heavier and heavier locks, they hope defeating fair-use activities such as time shifting, format shifting and unlicensed commentary.

    The organizations crying over the exploding piracy figures know full well the real score.

    • Problem is, Brazil and Russia are not owned by american corporations.
      • by bugi (8479)

        Look! piracy! They outcompete us. Force upon them cruel laws.

        Hark! we are having competition at home. Look, they over there have cruel laws and do not stress us with competition. You there, impose cruel laws here at home.

    • by TubeSteak (669689)

      The point is to generate high piracy rates, in order to generate the PR necessary to give pet legislators an excuse to do their "friends" a favor by passing yet more draconian legislation, allowing heavier and heavier locks, they hope defeating fair-use activities such as time shifting, format shifting and unlicensed commentary.

      1. We've already established that "heavier locks" don't really work when you have to give the end user the key
      2. High piracy rates generate a culture of piracy that has shown itself to be nearly impossible to break

      All the legislation in the Western World won't do anything to kill piracy in regions like Eastern Europe, Asian, and Africa.

  • That isn't "piracy". (Score:5, Interesting)

    by Seumas (6865) on Monday March 07, 2011 @03:23PM (#35409522)

    'For those who must have it for free anyway, you probably know where to look.'"

    Piracy doesn't get you something for free. Piracy is when someone makes unauthorized duplicates of something which they don't own the copyright for with the intention of selling it for a profit. Piracy is the guy on the street in New York who is trying to sell you a movie that is still in the theaters for $20 on DVD or is trying to sell you a copy of some software for $5.

    Stop perpetuating the misuse of these words. Piracy, copyright infringement, plagiarism, and forgery are all different things. Playing a scene-ripped copy of a game or movie is not piracy. That doesn't justify it if you do it, but it's not piracy.

    • by gknoy (899301)

      It was piracy when someone gave it to you, though, right? (By the colloquial meaning, not the seagoing-assault one)

    • by blair1q (305137)

      That isn't piracy.

      Piracy is when a syphilitic sailor plunders legitimate commerce in a region of the sea, terrorizing and looting ships, murdering their captains, and taking wenches and boys prisoner.

      This stuff is white-collar IP infringement, and calling it piracy is just demonizing it to make political inroads into putting more public resources towards stopping what is, in most cases, barely a misdemeanor.

      • Piracy is when a syphilitic sailor plunders legitimate commerce in a region of the sea, terrorizing and looting ships, murdering their captains, and taking wenches and boys prisoner.

        That's one definition of piracy. But, unsurprising to anyone with a reasonable command of the English language, some words have more than one meaning.

        This stuff is white-collar IP infringement, and calling it piracy is just demonizing it to make political inroads into putting more public resources towards stopping what

  • I remember reading about how MS had to reduce prices of Vista in developing countries like China so it would be affordable.

    • by JamesP (688957)

      Yeah, but they didn't reduce the price.

      They came up with the stupid "Windows Starter" version, that's the only affordable version and this is shipping like cancer on OEMs.

      Way to treat your consumers, MS. Of course it gets home a 'technician' installs pirated regular Windows. Of course MS is ok with this, they got the money.

      As for the conclusion, color me shocked. Everybody said correctly.

  • Wait, you mean to say that it took 3 years to figure out that people pirate because shit costs too much? Uh, DDDDDUUUUUUUUHHHHHHHH
  • by cpghost (719344) on Monday March 07, 2011 @03:45PM (#35409894) Homepage
    The artificial division of the world in DVD regions is also one major reason for piracy. Take for example North Africa: officially, it is in DVD region 5, but culturally AND economically, with all their ties to Europe, they get all their DVDs from Europe, a.k.a. region 2; legally or pirated, if need be. If the players you have there are all region 2 (and almost all of them are, because they're getting them from Europe), there's no point in buying a region 5 DVD there.
  • by swb (14022) on Monday March 07, 2011 @03:51PM (#35409966)

    One of the truisms of the software industry I've always heard is that publishers promote and tolerate a certain baseline amount of software piracy to win mindshare and gain experienced users.

    Is there any history of companies that manage to implement a very difficult to crack DRM (eg, dongles, etc) going under or fairing poorly? In other words, once the software becomes too difficult to pirate, the vendor ultimately loses legitimate sales -- hard to evaluate the product, difficult to find experienced users, etc?

    I'm sure it's difficult to say "for sure, DRM made them go under" but it would be interesting to see if that kind of thing has happened.

  • A few numbers in Mexico (right south of the USA...):

    Minimum wage: 50ish pesos a day for 8 hours, which is around 4usd.
    Average income for a family: 7,000 pesos a month, which is 500usd. (Source: Inegi, in spanish)

    Price for a new hollywood release for DVD: 200-300 pesos
    Price for an old movie DVD: 100 - 150 pesos
    Price for a new popular album: 150-250 pesos
    Price for old albums: 100-150 pesos
    Price for a New PC game: 600-800 pesos
    Price for a New Console game: 800-1200 pesos

    Funny thing: there are s
    • by blair1q (305137)

      And yet the guy who owns their cell-phone company is one of the richest men in the world.

  • by Stonan (202408) on Monday March 07, 2011 @04:01PM (#35410098) Homepage

    In the early 80s the Commie 64 was targeted for kids. After you convinced your parents to spend $300-$400 on what they considered a toy, you then had to convince them to spend another $50-$60 for a piece of software.The best way to describe the result was 'fat chance'.

    Hacking/copying was the only way most kids could get ANYTHING for the 64. I admit I was heavily into this. Not so much the hacking as the copying and distributing. This was the time when hackers were seen as the Robin Hoods of the early home computer age. Of course this has changed and hackers are seen in a different light now but where they came from hasn't: corporations want way too much money for the product they produce.

    In the late 90s I worked a contract for Electronic Arts. During that time I could buy software that was going for $90 in the stores for $10 from the internal EA store. I know some of the $90 price is retail markup but not all.

    At least EA puts out software that works unlike the MS business model of double-gouging: pay thru the nose for crap software then do it again when the 'upgrade' (corrections & fixes) are released.

  • ...the "no shit, Sherlock?" thread. If it seems blatantly obvious to the variegated crowd here on slashdot, you'd think maybe the **AA would consider firing their market research personnel. If you drop the price of your goods by 80% but sales go up by 400%, you're now making the same money but with a lot higher market penetration, right? Is my math wrong? (Likely wrong -- I attended Louisiana public schools. :P)

    • by langelgjm (860756)

      If you drop the price of your goods by 80% but sales go up by 400%, you're now making the same money but with a lot higher market penetration, right? Is my math wrong? (Likely wrong -- I attended Louisiana public schools. :P)

      The problem is that because of income inequality in a lot of developing countries, it is often more profitable to sell to a small but wealthy portion of the population, rather than to drop the price to a level that expands affordability and access.

  • Wow. Price is generally the reason for all theft. That includes scamming the movie and music industry into funding a three year study of the obvious.

  • I just looked at the Major Findings, and they could quite easily have removed the term "Developing Economies" completely, and the report would still have made sense. I live in a developed country, and media is so expensive here that the media companies are complaining that sales of music (in particular) are on the decline, but there never seems to be any analysis of why. Just coincidently, I had a conversation with a colleague about the troubles he has been having with music DVD's he buys from amazon.com of
  • So people are copying data that they cant afford to buy. Who would have thought?

    How much as spent for this 'study'?

  • The Berkman Center had a discussion (in Feb. 2010) with Joe Karaganis, Director of SSRC, to discuss the "findings from a forthcoming six-country study of media piracy..."

    .

    Q: What will be the take-away of the report?
    A: It won’t be liked by industry lobbyists because it departs from the theft narrative that has defined the debate. It’s written from the perspective of the developing economies, where the reasons and conditions for piracy are just not part of the piracy of debate. You never hear a

  • I don't do piracy, if I don't want to pay the going price for something then I just don't buy it & don't copy/download it either - if the rest of the world did that then they'd have the music/movie/software companies would have no reason to employ DRM, the only thing they could do is reduce prices to sell more - basic economics. Otherwise, patronising lecture mode over...

    With that said, I'm getting bored with the whole capitalism thing now anyway, it's dying as we speak and it needs a reboot.

    I'm in a go

  • Japan: Anime/Manga Sorry, without the scanalations und community subs most of the stuff would be unavailable or useless for me anyways.

    USA: Comics, Movies. Not sorry, I could not care less for the American economy and American rights. Guess why.

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