Column - Stop blaming consumers for America’s rampant piracy

By Doug Walp

Published: Monday, February 6, 2012

Updated: Monday, February 6, 2012

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Netflix reported that its 20 million subscribers streamed more than 2 billion hours of content during 2011’s final three months.

Illegal internet file sharing, also known as piracy, has been a political focus ever since Napster caught the public's collective attention right around the turn of the millennium.

More than a decade later, piracy has evolved from a simple, seemingly harmless peer-to-peer file sharing process to a complex social and political conflict, where consumers find themselves the target of grievous legislation passed down from elected representatives.

It's incontrovertible; piracy is a major problem in modern America. In fact, it's one that the Recording Industry Association of America claims leads to an annual "$12.5 billion in losses to the U.S. economy, as well as more than 70,000 lost jobs and $2 billion in lost wages to American workers."

Contrary to popular belief, it's not a conflict that has stemmed from consumers' greed or a sudden influx in kleptomaniac tendencies; rather, it's a dilemma that has surfaced due to the inability of the nation's major media industries to adequately meet our society's demands.

In other words, most illegal file sharers, or, as the Movie Picture Association of America dignifies as thieves who operate with impunity, only engage in piracy because the major American media corporations that produce the majority of our television, movies, music, software, etc., are simply not evolving quickly enough to provide us with an adequate product.

Netflix, iTunes and Valve are perfect examples of how the media industries can take advantage of new, modern demands of consumers. All three services have delved into legitimate ways to provide digital media for their clientele –Netflix through its streaming video service, iTunes through its prodigious music library and Valve's digital video game collections.

All three services have shown stunning resilience to the economic downturn, but their success isn't coincidental. In a modern period where most American media corporations have profits supremely prioritized over consumer satisfaction, these services have adopted unconventional business models that have allowed them to reabsorb the pirates of the black market media back into the nation's economy.

Valve cofounder and CEO Gabe Newell beautifully summed up the concept during an interview with Cambridge's Nicholas Tufnell, "We think there is a fundamental misconception about piracy. Piracy is almost always a service problem and not a pricing problem," he said.

"If a pirate offers a product anywhere in the world, 24/7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country three months after the U.S. release and can only be purchased at a brick and mortar store, then the pirate's service is more valuable."

Newell was specifically referring to Valve's ability to introduce video games digitally in Russia at the same time the games were being released in North America and other places around the world, but the same basic concept applies to American culture in respects to television and movies – if there is a more convenient product or more valuable service available, simple economics dictates that consumers will be drawn to it.

For example, American consumers currently have the choice of waiting in line for an hour, paying upwards of $20 to get a ticket and leaving an arm and leg at the snack bar when they want to see a movie, or waiting a few months to get the movie on DVD, which of course will be replaced by another medium eventually.

Alternatively, they could download the same movie to enjoy in the comfort of their own home, on a digital copy that would be consistently reusable, regardless of new technology to surface.

Obviously, pirating the movie is also free, but if the major American movie industries took advantage of the available technology to provide a similar and affordable experience for the consumer at home – they could take advantage of an unfathomably large and reasonably unexploited market and would reabsorb countless consumers back into the economy, just like Valve, Netflix and iTunes.

Instead of changing their business practices and developing rational business models to better provide for their customers, the media industries and recording studios have villainized practical uses of the Internet while throwing millions of dollars at politicians in order to pass unconstitutional legislation.

It's become a sickening and perpetuating scenario, because even when consumers choose to abstain from, say, going to the movies to send a message to the industry, the movie corporation just chalks up the lost revenue to piracy, never even considering that perhaps it's their rampant exploitation that's driving customers away.

Despite this, one of the few options we have as consumers is to boycott Hollywood for the foreseeable future, because unfortunately the only real way to reason with these avaricious corporations is through their wallets.

It might seem difficult and pointless, but I assure you – the sooner our society acknowledges how we are being exploited when it comes to the dissemination of entertainment, the sooner we will be able to force these corporations to start providing things like movies, music, television, video games and software in more convenient and efficient ways – thus also negating many of the crippling effects of piracy on our economy.

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