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China Media Piracy The Almighty Buck Entertainment Technology

China Is Quickly Switching From Pirating To Streaming (cnn.com) 79

hackingbear shares a report from CNN: Not so long ago, China was an oasis for pirated music and videos. CDs and DVDs were easily copied and sold for cheap at roadside markets. If you had a computer and an internet connection, top selling albums and Hollywood movies were widely available for free online. That's changing fast as new technologies such as the convenient WeChat payment and a long-running crackdown on pirated content mean members of the country's growing, smartphone-wielding middle class are increasingly willing to pay to stream videos and music online. "When you have to spend two-to-three hours digging up pirated content, users are willing to pay a [small] amount of money to get non-pirated content," said Karen Chan, an analyst with research firm Jefferies. Across major Chinese video platforms, the monthly fee is about 20 yuan ($3); streaming music is even cheaper, ranging from 8 to 15 yuan ($1-$2) per month. Compare that with a basic monthly Netflix subscription in the U.S. at $8, or a Spotify one at $10. The rapid spread of digital payment platforms like Tencent's WeChat Pay and Alibaba-affiliated Alipay has also played a role, according to Xue Yu, an analyst with research firm IDC. The platforms created a market of young Chinese consumers comfortable with buying goods and services for a few yuan online, Xue said.
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China Is Quickly Switching From Pirating To Streaming

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  • by Camembert ( 2891457 ) on Friday January 26, 2018 @06:14AM (#56006049)
    This was an interesting summary. For music + video, streaming is 4 to 5 times cheaper in China.
    On average salaries are lower in China: a quick google showed me $1424 monthly in Beijing compared to the use average of $758/week or monthly $3032 (for age 25-34).
    So, approx half.
    Hence relative to salary, does it make sense to say that a monthly video streaming fee of $6 and for music of $4 would cause the same behaviour in the west?
    I think it would. For $10 per month without wasting time, I think that most would switch to legal streaming.
    • by c6gunner ( 950153 ) on Friday January 26, 2018 @06:22AM (#56006073)

      Comparing the average salary in Beijing to the average salary in all of the USA is rather misleading. The average salary in China add a whole is about $4,700 per YEAR, which is significantly lower than the figure for Beijing.

      • by Zocalo ( 252965 )
        You can't really do a fair comparison of the national averages either as there probably is some bias between those using the streaming services that must have the disposable income to pay for it (most likely on the relatively higher Beijing average salaries) and those without (most likely on provincial area average salaries), which will also be further offset against the higher costs of living in Beijing vs. in the provinces. That $1424/month in Beijing won't help you pay for streaming services if you're pa
        • by Rolgar ( 556636 )

          Consider that the US has probably about 80 million households that have cable, and it is being slowly shifted to streaming services. If you only get 5 million customers, and you get $10 / month, that generates 600 million/year to create shows depending on what your distribution cost are.

          Now, China, which probably never had the time to develop the same cable cartel as the US has a much higher population. Let's say 250 million households. Because you can get a much larger fan base for the same cost of product

          • by Zocalo ( 252965 )
            Yep, it's different strokes for different folks, or countries in this case. Within a given market - the US or China, say - you can take some averages to provide a fixed price that can be applied across the board, typically making more from some demographics and potentially even running some at a loss, but trying to do so when you have radically different infrastructure, population densities, salaries, and costs of living just isn't going to work. The EU kind of gets away with it for some things because th
        • The cheaper a given service is, the more individuals' disposable incomes will support the outlay at which point it will start competing against all the other non-essential items that a given individual wants.

          That's a valid point if we are talking about why piracy is rampant in third world countries but, I would argue, streaming services in the west have been "cheap enough" for years. Especially if you consider the fact that they are positioned as a replacement for cable television, which is generally far more expensive.

          The issue has never been one of cost for us. I have access to two streaming services yet I still often frequent pirate bay. The bigger issues are selection, reliability, and the ability to use

  • What a shocker (Score:5, Insightful)

    by kbg ( 241421 ) on Friday January 26, 2018 @06:30AM (#56006087)

    Who would have thought that if you just priced your products fairly you could gain all the market and crack down on pirating easily? It's not like this was something that everybody knew all along.

    • Who would have thought that if you just priced your products fairly you could gain all the market and crack down on pirating easily?

      The difficulty is that a lot of people's idea of a "fair" price is wildly out of proportion to average production costs and returns, particularly if you're looking at smaller markets or more niche products and not just the top end Hollywood blockbusters, top-of-charts music, this season's must-have game that are the unicorns in this business.

      Read any Slashdot discussion on this subject, and after a few hundred comments you'll find no shortage of people who think that because the marginal cost of online dist

      • Re:What a shocker (Score:5, Interesting)

        by fuzznutz ( 789413 ) on Friday January 26, 2018 @09:56AM (#56006687)

        Read any Slashdot discussion on this subject, and after a few hundred comments you'll find no shortage of people who think that because the marginal cost of online distribution is close to zero, the price should be as well.

        Most customers understand the difference between fixed and variable costs, but many believe that when the marginal costs are near zero, the product should be priced lower than when the same product has marginal costs that are much higher. Suppliers of course believe that pricing should reflect what the market can bear. Therein lies the dilemma.

        If demand can be increased by reducing price such that more profit can be made, suppliers would be better off. Unfortunately many suppliers are afraid of upsetting existing markets by changing strategies. And of course some take the alternative tactic and increase price (and profit) per unit [cough] Apple [cough] while reducing overall demand for a product. This, however, makes very little sense in a market with near zero marginal cost unless you have totally inelastic demand.

        • Suppliers of course believe that pricing should reflect what the market can bear.

          That's an assumption, and not always a valid one. It may be true in most cases at the high end, but at the low end the question is often closer to "Can we afford to do this at all?"

          If demand can be increased by reducing price such that more profit can be made, suppliers would be better off. Unfortunately many suppliers are afraid of upsetting existing markets by changing strategies.

          Both of these things are true, but the "if" in your first point is important, and some of the fear in your second point is justified. The reality is more complicated than just increasing/decreasing prices resulting in decreasing/increasing demand, even allowing for the possibility of a non-linear relationship between the two.

          Ther

          • Another one that isn't always considered by those who haven't worked in this sort of market is that people who purchase low value products and services are much more likely to cause customer support issues later.

            That is a true concern. Particularly with complicated products. I deal with software licensing problems every day for my job and although the software itself has zero marginal cost, the licensing and activation schemes can be ridiculously complicated at times and require tech support to resolve.

            • I suppose what a lot of this comes down to is that just because the cost of reproducing an electronic work may be close to zero, that very much doesn't mean that the marginal cost of selling that copy will be zero.

      • by MeNeXT ( 200840 )

        That is one point of view the other is that most copyright owners can't decide if it's a license or a product. The determination of the price was initially due to the costs associated with production and distribution of a good like an LP or cassette. As technology improved and the cost of distribution and production nearly disappeared the thirst for profit grew. So in this instance we want to consider it a product unless it was defective. There was no option to return the product if it was defective such a

        • I want to point out that you're describing a very specific environment -- I'm guessing you're based in the US from some of the details? -- but much of what you wrote isn't how IP laws necessarily work elsewhere.

          In various other places, the issues with DRM and defective physical media are covered by the same consumer protection laws as any other defective physical product, and in many cases you'd be entitled to return a product that didn't play (because of a bad DRM implementation or otherwise) for a full re

      • So.. the American movie industry needs to control costs just like any other company in the private sector? Oh noes!
        • The American movie industry seems to live in its own crazy world, and it's big enough to look after itself. But most content isn't produced by the American movie industry, and all the little guys have to play by the same rules too.

      • by Cederic ( 9623 )

        a lot of people's idea of a "fair" price is wildly out of proportion to average production costs and return

        Companies are competing with centuries of existing music, books and visual arts, and decades of cinema.

        I don't have to pay £8 for a book from my local charity shop yet I'm expected to pay that for one from Amazon. Even worse, I'm expected to pay £8+VAT for the digital version that doesn't have physical printing costs, or the packing and delivery overheads. Meanwhile I can go to Project Gutenberg and access several years worth of reading material absolutely for free.

        EA want me to pay

        • You seem to be objecting to market segmentation and differential pricing, on some sort of ethical basis. The trouble is, the world isn't really one big, global market where the same price makes sense everywhere.

          For one thing, people in different places might have wildly different buying power. If you look past the unicorn productions that make staggering money no matter what, a lot of content might not be cost-effective to produce at all if you had to sell it everywhere at the lowest price you sold it anywh

          • by Cederic ( 9623 )

            I'm not going to reply to most of your comments, because they're well stated and I understand (and in some cases agree with) your position. Just a couple of bits though.

            some sort of ethical basis. The trouble is, the world isn't really one big, global market

            Fuck the ethics, it's the fairness of it. The labour market is one big global market, so why aren't the others.

            you're welcome not to buy it at whatever higher price it's offered at, or you can move to China and pick it up for $3

            Unfortunately I'm not allowed to take advantage of globalisation as a consumer. See https://en.wikipedia.org/wiki/... [wikipedia.org] for the reason I stopped buying physical music media.

            (I now buy my music from a Ukrainian website, as they sell it

            • Fuck the ethics, it's the fairness of it. The labour market is one big global market, so why aren't the others.

              If that's your ideal then I'd agree that in that case price discrimination shouldn't be necessary either. I'm not sure whether reasonable economics could ever actually result in a completely level playing field across all markets, but sure, we could be closer than we are today.

              I suppose where we do differ is that I don't really see that the global labour market is one single, unified entity today. Of course there are many elements of international movement and international competition, but if the global la

      • by tlhIngan ( 30335 )

        The difficulty is that a lot of people's idea of a "fair" price is wildly out of proportion to average production costs and returns, particularly if you're looking at smaller markets or more niche products and not just the top end Hollywood blockbusters, top-of-charts music, this season's must-have game that are the unicorns in this business.

        Read any Slashdot discussion on this subject, and after a few hundred comments you'll find no shortage of people who think that because the marginal cost of online dist

    • Who would have thought that if you just priced your products fairly you could gain all the market and crack down on pirating easily? It's not like this was something that everybody knew all along.

      Yeah, and who would have thought that users would stop pirating your stuff if you just allowed your them to pay a subscription where they could download and watch your content on demand any time they want no matter which country they are in instead of being forced to buy easily scratched, easily broken DVD and BlueRay disks (which into the bargain are grossly over priced as you already pointed out) and where you don't have to deal with malware and all the other crap that goes with pirated content.

      • by mentil ( 1748130 )

        What malware and other crap? Buy counterfeit blu-ray from the market, put it in your gray-market region-free blu-ray player, done.

  • ends at the border (Score:3, Interesting)

    by speedlaw ( 878924 ) on Friday January 26, 2018 @08:51AM (#56006419) Homepage
    Travelling, I have learned that US Copyright ends at our borders...Mexico City ? All programs all day $5 before haggling. Any military base ? Please fill the group hard drive with whatever movies or music you have. The demise of Net Neutrality is a gift to content providers...once an ISP is responsible for your russian downloads that hole can be plugged.
  • Warez is dead? I disagree, ftp://91.217.9.230/pub [91.217.9.230]

  • Games are going Pay-2-Win while videos are moving to Pay-2-Stream format.
    You no longer own anything, you need to pay every time you want to play/watch, and the availability and pricing can change at any moment.

  • I wonder if the Chinese will go back to pirating content once they realize that they content that they want to watch is spread out over 4 or 5 different streaming services (like Netflix, Amazon Prime, Hulu, HBO Go, and CBS AllAccess just to name a few in the US), each one of which having it's own monthly subscription fee.

    Once you realize how big media is trying to nickel and dime you to death, it makes one long for a return to the high seas. Yarrr!

  • Makes me wonder if the streaming services have actually licensed all of the content they are streaming? China is notorious for ignoring international copyright, trademarks and IP.

  • Some country abandons CDs and DVDs in 2018.
    News for nerds indeed.

  • They are just streaming pirated content.
  • Everything else I get but why is music cheaper there?
    AFAIK everywhere else streaming music services are more costly than streaming video services.

    From my understanding that's because to have a music service you have to have pretty much everything under the sun to keep subscribers so while the content costs considerably less you have to buy a ton more of it.

    What makes it different there?

  • Good business too. Instead of getting next to nothing, by lowering the price and making it AFFORDABLE, they will have a steady stream of revenue each month.
  • ... they'll screw it up by raising streaming prices or adding commercials, pushing people back to pirating.

  • It's all about convenience.
    This has less to do with price, which is still important of course, and more to do with how they setup the system to work with the payment systems, social networks, and chat apps that are majorly used throughout the country.
    Similar thing happening in Brazil, but related to businesses. Even though WhatsApp still didn't implement comprehensive and easy payment systems inside the app that everyone can use, no businesses in Brazil go without a WhatsApp contact, and a whole ton of tran

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