Online piracy

Tackling online piracy

We asked readers in our latest online web poll about ways to combat online piracy — and most agreed that the entertainment industry needs to be more innovative in how it shifts content.

The best way to fight illegal downloading is for content providers to give customers what they want — fast, reliable, easy-to-use ways to download content for a reasonable price. That, at least, seems to be the conclusion from our most recent web poll.

Most respondents said that finding innovative ways to distribute paid content was the most effective tactic in the fight against illegal downloading and file sharing. It is a pertinent subject in this part of the world. Western critics have no shortage of complaints against China’s leaders, but one of the most common is that it does too little to prevent the sale of illegal copies of movies, music and software.

It is certainly true that pirated material is readily available in China — indeed, just across the border from Hong Kong, in Shenzhen, it is hard to avoid the hawkers offering DVDs of the latest Hollywood movies. But it is less clear that these black markets are costly to the global media conglomerates. After all, most of the movies are uploaded to the internet in the West, where the actual piracy has typically taken place.

This is never more evident than during the Christmas period, when pirated copies of Oscar-nominated movies typically hit the internet, complete with disclaimers revealing their origin: “For Academy screening purposes only.” In other words, judges from the Motion Picture Academy of America are the source.

Websites that index such pirated material are easy to find and provide further evidence that the source of almost all piracy is in the West — because the groups that release the files are not shy in taking credit and even compete with each other to be first to process and release the latest movies (as well as TV shows, songs, games, software and anything else that can be digitised). An informal look at these indexing websites shows that most releases appear to come from the US, the UK, the Netherlands and, to a lesser extent, other European nations.

So what those Chinese hawkers are doing is downloading a file that is readily available on the internet, burning it on to a disc and selling it for a few renminbi to customers who either do not know how to do this themselves, cannot be bothered to do it or do not have access to a high-speed internet connection. Moreover, most of those movies are not on general release in China’s cinemas due to government restrictions.

Cracking down on that trade may make sense from a law-and-order perspective — the proceeds of black-market sales are often used to fund other criminal activity — but it would hardly make any difference to the profits of the companies that make Hollywood blockbusters. There is demand for pirated content in China because the legitimate supply is strictly controlled and not very efficient.

The solution, both in the West and in China, is to better understand what consumers want. Many studies in the US and Europe (other than those sponsored by the entertainment industry) have shown that consumers of pirated content also tend to be among the biggest consumers of legal content. That suggests many illegal downloaders are trying before buying, so to speak, which in turn suggests that cracking down too hard on piracy may actually hurt legitimate sales.

The truth is that accessing illegal material from the internet is often not free. Reliable connections to a virtual private network (VPN, for online anonymity, even from China’s Great Firewall) and to a Usenet news provider (for accessing files at fast, consistent speeds) each cost in the range of $5 to $20 a month — not to mention the cost of a high-speed internet connection, an up-to-date computer and perhaps even a server, and a home theatre to watch it all on.

Put simply, the community of online thieves, far from being freeloaders, are often thoroughbred consumers for whom downloading is simply the most convenient way to get the content they want, in the form they want it in.

File-sharing sites such as Napster and Kazaa were pioneers in identifying this demand early in the web’s history, long before the content producers ever realised the internet’s potential not only to drive sales but also as a way to better understand customers’ needs.

In the end, it took Steve Jobs and Apple to show the entertainment industry how to do it. The iTunes Store launched in 2003 and became the leading music seller in the US within five years. Spotify has taken the game a step further, offering free music streaming. Services such as Netflix are belatedly doing the same thing for movies and many television networks are now making their content available for free online.

These services all offer greater convenience than downloading illegally as they are available instantly and on demand — instead of having to wait a couple of hours for a movie to download — and are much more user-friendly, as well as being more secure.

However, none of it is widely available in Asia, legally. Streaming television shows online is typically only available to domestic audiences (easily bypassed with a VPN), the iTunes Store and Spotify are not open to customers in most Asian countries (though the iTunes Store can be accessed using vouchers for sale online) and Netflix is only available in the US (and cannot be bypassed with a VPN).

This is a conundrum in an increasingly globalised world, where fans of Lady Gaga expect to be able to buy the latest album on the day it is released, wherever they happen to live — and then discuss it online with their fellow Little Monsters. The internet has created a global audience for the entertainment industry’s product, but the industry has been slow to create a truly global distribution model despite the ease of doing this online.

There are many complicating factors, of course, such as licensing and regulation, but the point stands that the best way to combat piracy is to beat it at its own game by offering better speed, convenience, reliability, security and even cost.

It should go without saying that governments are generally oblivious to most of this. If the internet had been proposed as an idea back in 1990 (rather than emerging almost by accident before anyone in power noticed) politicians would doubtless have intervened to prevent it from ever becoming the extraordinary tool it is today. Indeed, it probably would have been weaponised and deployed against Saddam Hussein.

For all the talk of how piracy is costing billions, it is hard to tell how that can be true. Paul McCartney still earns millions each year from his music, decades after he last recorded anything worthwhile, and Hollywood studios still spend ever-increasing sums on their summer blockbusters and pay their stars sums that would embarrass even a banker. And Justin Bieber would likely still be singing in shopping malls, rather than earning millions from fans around the world, were it not for the copyright-infringing distribution of his early performances online.

¬ Haymarket Media Limited. All rights reserved.
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